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In less than 20 years, Müller, the German range of yogurt pots and desserts, rose to become one of the UK's leading food brands, outselling virtually every other edible product except Walkers' crisps, and such megabrands as Birds Eye, Kellogg, Cadbury and Heinz. It was an astonishing achievement, matched by the brand's dominance in its domestic market. More recently, though, Muller has faced increasing competition from more traditionally healthy functional products such as Danone's Activia and Actimel. In response, the brand's German owners extended their presence to several other European markets. MullerGroup has also widened its range, acquiring a number of other food-based businesses including fish restaurant chain Nordsee, Bastians bakery and Homann chilled salads. In the UK it entered the fresh milk market with the purchase of Wiseman Dairies, and doubled down in 2015 with the purchase of the rival unit of Dairy Crest.
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Müller Group is gradually conquering the European chilled dairy sector through a combination of clever product innovation and slow but steady expansion. The group is already the leading player in Germany and the UK, and is heading towards the same position in several other important markets.
Müller has built its share of the UK yogurt market through a combination of determination, innovation and aggressive marketing. Yet 30 years ago, the brand didn't even exist in the UK. When German owners Molkerei Alois Müller took its first steps into the UK in 1987, the local yogurt sector was dominated by two companies, St Ivel (with Shape) and Eden Vale (with Ski), each with a 40% share of the market. Although initial progress was slow, the brand's German owners made a decision to establish a UK manufacturing plant in 1992. After that, Müller steadily eroded the share of its two rivals, each of which underwent its own internal upheavals. Eden Vale was sold by its then-owners Grand Metropolitan, becoming part of Northern Foods. It sold the Ski brand to Nestle in 2002, but despite the Swiss giant's marketing muscle, Ski still trailed Müller. St Ivel became part of the much reduced dairy giant Unigate, later Uniq, but sold the Shape trademark to Danone in order to concentrate on its private label range.
The real key to Müller's popularity came with its introduction of a range of unusual and appetising products, such as its Fruit Corners, offering yogurt and fruit jam in a split pot for consumers to stir in themselves. The same concept was adapted with different mixers to replace the jam (in Müller Crunch Corners and Müller Crumble Corners), and the company also introduced its popular German Müller Rice dessert (a sort of rice pudding), as well as broad range of other yogurt-based desserts.
Unquestionably the Corners concept added new elements of both fun and individuality into the pot dessert market. Before Müller, the perception of yogurt in the UK was as a slightly dull health food. Müller turned it into something close to confectionery, emphasising the idea of indulgence so that consumers were able to trick themselves into justifying the high calorie "corner" because it was combined with supposedly healthy yogurt. The company now offers a huge range of different mixes, from straightforward Cherry Fruit Corner to the truly adventurous Strawberry Choco Orange Balls Crunch Corner. Marketing partnerships have led to the launch of a range of Corners with third-party brands as the mixer. This concept launched in a partnership with Kellogg's cereals (Müller Corner with Kellogg's Frosties, for example). The cereal company later dropped out and was replaced by biscuit manufacturer McVitie's, with whom Müller launched Corners with Penguin, Jaffa Cakes and Chocolate Digestives mixers.
Although the company dominates the adult yogurt market, it faces stronger competition in the children's segment and in the fast-growing yogurt drinks segment. The group's chilled desserts include Müller Rice and luxury range Müller Simply Desserts. In 2004 the group acquired the licence to market short-life chilled dairy products in the UK under the Cadbury brand, including a version of the Corners concept co-branded to Cadbury's Flake, Buttons and Crunchie products. Kids yogurt Yogz was discontinued in 2005, and replaced by Little Stars.
Müller remains one of the UK's best-selling grocery food brands, despite intense competition from other brands, notably Danone's health-oriented Activia. Müller Corner was overtaken in 2010 by Activia, but regained its lead in 2013, and has steadily widened it. Another major threat across the sector as a whole has been a change in consumer tastes away from products with high sugar content. For 2016, Nielsen (in The Grocer) estimated UK sales of £190m for Muller Corner, making it the top-selling yoghurt prduct in the UK. Muller Light ranked #2 with an additional £177m (ahead of Danone's Activia on £152m). Other Muller brands in the national Top Ten were Cadbury desserts at £59m and Muller Rice with £40m. Other variants include Müller Healthy Balance Corners introduced in 2005, and luxury range Müller Amore. The group claimed a 22% value share of the chilled yoghurt and potted desserts sector in 2015. (Private label accounts for around 30% of the UK chilled yoghurt market, Danone for 13%, Yoplait 10%, Nestle 8% and Yeo Valley 5%). Müller Vitality drinking yoghurt was launched against Danone's Actimel and other products, but has failed to gain much of a following.
In 2012, Müller expanded its footprint in the UK through the acquisition for £280m for Robert Wiseman Dairies, one of the country's biggest suppliers of fresh milk. That company, now Muller Wiseman, markets its products under several brands including Black & White and The One, and also supplies supermarkets with own-brand milk. It produces around 30% of the UK's total consumer fresh milk market. Soon afterwards, Muller announced a move into butter production, commissioning a huge new plant in Market Drayton. It launched its first block butter in the UK in 2015 under the Muller Wiseman Black & White brand. In 2014, Muller also agreed to acquire the dairies business of rival Dairy Crest, including its Frijj flavoured milk brand, for £80m. However that deal was subjected to a protracted investigation by regulators, delaying completion until the very end of 2015.
Muller UK & Ireland reported revenues of £1.34bn in 2015, down 4% on the year before. A sharp rise in expenses as well as £185m of impairments resulted in a loss of £106m. Operating profit before impairments and amortisation was £73m.
Müller now operates production sites in six countries in Europe, and exports to several more. During 2008, it took its first steps into Israel (under license), the Czech Republic and Romania. Bulgaria and Poland will follow in 2009. The group's other subsidiaries include packaging company Optipack (which makes pots for the company as well as its competitors) and logistics business Culina. All are controlled by parent company Theo Müller Group. The group had sales of €4.96bn in 2015, and net income of €169m.
In Germany, Müller is the market leading white-line dairy manufacturer, manufacturing a wide range of milk based drinks and yogurts under the Müllermilch, Sachsenmilch and premium-priced Weihenstephan brands, as well as Loose cheeses, milk rice, Italian-style Crema yogurts, Froop fruit yogurts and vitamin drinks. It acquired Nestle's German chilled dairy dessert business in 2003, as well as the local license to market LC1 yogurt, and extended this to include the Swiss company's children's yogurt products from 2004. Also in 2004, the group acquired Dutch yogurt brand Almhof, making it the #3 dairy manufacturer in that market. In 2005 it acquired Czech diary Pragolaktos.
The group took its first steps into the US in summer 2012, forming Muller Quaker, a joint venture with PepsiCo's Quaker Foods division, to launch Muller Corner yoghurt in the US as well as new product FrutUp. However sales remained weak, and the partnership was eventually dissolved at the end of 2015.
Also in 2005, Theo Müller Group acquired a majority stake in IFR Capital, an investment company launched by Heiner Kamps, former owner of the Kamps bakery chain. In 2006, that group acquired Nordsee, Europe's largest fish restaurant chain and the leading non-burger fast food chain in Germany and Austria. Other subsequent purchases include chilled salads and dressings manufacturers Homann and Hamker. Bakery chain Bastians was sold in 2015.
The original Müller dairy was founded in 1896 in Bavaria by Ludwig Müller, but for the next 80 years it remained just a small regional business, mostly specialising in soft cheese. It passed to Ludwig's son Alois in 1938, and he incorporated the business as Molkerei Alois Müller. In 1971, his own son Theo Müller took over control of the company. More ambitious than his father and grandfather, Theo Müller saw an opportunity to market the family's traditional products nationally within Germany. He invested heavily in new equipment and manufacturing facilities, and launched the company's first national advertising campaign in 1977. In 1980, the company introduced a yogurt containing rice, and mixed with a fruit sauce. This proved extremely popular, and in 1985 Müller introduced its first "split pot" separating the sauce and yogurt into two compartments. By the late 1980s, Müller had become Germany's leading yogurt manufacturer.
In 1987, the company tested its Fruit Corner concept in the UK, launching it nationally a year later. Low fat Müller Light arrived in the UK in 1989, followed by Müllerice in 1990. In 1992, the company opened a huge new factory in Market Drayton; that same year, Müller became the UK's best-selling yogurt, a position its has steadily built upon ever since. In 1995, the group entered the Italian market, growing to become the #3 yogurt brand within two years, with around 19% share.
In the late 1990s, the group expanded its operations within Germany, taking control of eastern Germany's Saxonia dairy (makers of Sachsen Milch) and the August Loose cheese business. In 1999, Müller was the controlling partner in a consortium which acquired national German dairy business Weihenstephan.
The company launched in Italy in 1995, and is now #2 in that market. In 2003, the group began marketing its products in Spain, Belgium, the Netherlands and Denmark. In 2004 it acquired Dutch yogurt brand Almhof, and negotiated rights to market Cadbury-brand chilled yogurts in the UK, as well as various children's yogurts in Germany, under Nestle's Smarties, Lion and Nesquik brands. In 2005 it acquired Czech diary Pragolaktos.
Ken Wood, widely credited as the architect of Müller's success in the UK during the 1990s, was promoted to managing director of Müller Group Europe at the start of 2004, but left soon afterwards to join Weetabix. Andrew Harrison, formerly marketing director of Nestle Rowntree, was appointed managing director Müller UK in 2004, but left the group without another job to go to in 2005.
Last full revision 8th February 2017
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