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CHEESE IN AUSTRALIA
Soft cheese grew by 5% in current value terms in 2017, contributing to the overall positive growth by cheese. Traditionally, cheese consumption in Australia has focused on cheddar varieties, which contributed a 55% value share of unprocessed cheese in 2017. However, over the review period, consumers have become increasingly adventurous with a small but growing value share of soft cheese varieties, including brie, ricotta and haloumi. In particular, soft goat’s cheese, initially a niche product, has been growing in popularity. This has been assisted by developed local processing techniques in Australia, which have allowed for improved taste formulations. For example, locally produced goat’s cheese has focused on having a mellower flavour to appeal to a wider consumer audience. Trade sources also indicate that demand for goat’s cheese has been driven by consumers looking for more adventurous flavours but an easier to digest option. Demand for soft cheese in foodservice was strong, with 6% growth in foodservice volume in 2017. Trade sources indicate that demand was driven by cafés and restaurants looking to provide indulgent and gourmet cheese options such as double brie or goat’s cheese.
Bega Cheese held a 12% value share of cheese in 2017 to rank fourth, a substantial increase from an 8% value share in 2016. This was largely due to the purchase of the Kraft grocery business in Australia which was scheduled to be handed over on 30 June 2017. However, due to a computer virus that resulted in an outage of the global Mondelez International IT network, this handover was delayed until 6 July 2017. As a result of this deal, Bega Cheese acquired the iconic Kraft cheese range of products although the branding of Kraft is set to be changed to Dairylea by end of this year due to the license to use the Kraft name ending in December 2017. Due to these changes, Bega Cheese held a 24% value share of processed cheese in 2017, up from a 6% value share in 2016, driven by brands Dairylea Cream Cheese and Dairylea Slices. The company continued to hold a strong presence in packaged hard cheese with a 14% value share, led by the Bega brand.
Cheese is predicted to record a 1% value CAGR at constant 2017 prices over the forecast period, recovering from stagnation over the review period. Growth over the forecast period will be constrained by processed cheese which will continue to shrink. In particular, spreadable processed cheese will record a -13% value CAGR, whereas other processed cheese will record a -9% value CAGR, both at constant 2017 prices. The recovery to positive growth over the forecast period will be driven by stronger positive growth in unprocessed cheese compared to the review period.
DRINKING MILK PRODUCTS IN AUSTRALIA
Dairy only flavoured milk drinks grew by 6% in value in 2017 driven by the growth in indulgent and premium products. This includes the success of The Coach House Dairy range, manufactured by NuLac Foods, with chocolate milk made from fresh milk and real chocolate. Devondale Milkshake range, manufactured by Murray Goulburn, has also continued to experience success with the addition of a Banana, Toffee & Pretzel flavour in early 2017. Premiumisation within dairy only flavoured drinks was a key driver of unit price growth (RTD) with an increase from AUD4.2/l in 2016 to AUD4.3/l in 2017. There has also been the release of relatively niche products that target the increasing number of health- conscious consumers. An example was evident through the launch of a range of stevia sweetened flavoured milk by Emma & Tom Foods at the end of 2016 which uses fresh milk sourced from Gippsland, Victoria.
A2 Dairy Products held a 9% value share of drinking milk products in 2017, ranking third. The company held its share largely through fresh milk with a 14% value share through a2 Milk. A2 Dairy Products has experienced robust growth in fresh milk, a category that has been highly commoditised with a substantial private label presence, which has suppressed value and unit price growth. The company’s success can be attributed to the fact that its milk is in line with current consumer trends in Australia. In particular, its milk is from specially selected cows that “naturally” only contain the a2 protein, in line with consumer demand for minimally processed and natural products. The company’s a2 Milk is also positioned as offering a better alternative and may assist with perceived digestive discomfort associated with standard cow’s milk. The company’s success can also be attributed to the premium positioning of a2 Milk, which is also designed for everyday consumption as it comes in a standard 2l size as well as a smaller 1l size. In early 2017, the company launched a skimmed milk powder under the a2 brand, although this product is largely targeted towards exports to China through the daigou or e-commerce channel.
Over the forecast period, drinking milk products is predicted to record a 1% value CAGR at constant 2017 prices, only marginally slower than the review period’s performance. Value growth will continue to be modest due to declines in fat-free and semi skimmed varieties of fresh milk, as consumers embrace full fat milk. This will be most evident within fresh milk, with fat-free fresh milk expected to decline by a 21% value CAGR at constant 2017 prices over the forecast period, which will be more severe than the -11% value CAGR of the review period. In contrast, full fat fresh milk will record a 5% value CAGR at constant 2017 prices over the forecast period, reflecting the continued shift away from semi skimmed and fat-free fresh milk. Private label will continue to hold a major presence, due to price being a key driver of demand for fresh milk. Unit price growth will continue to be suppressed particularly as the major supermarkets and Aldi, through discounters, continue to compete on price. As a result, the unit price of fresh milk will decline from AUD1.8/l in 2017 to AUD 1.7/l in 2022.
YOGHURT AND SOUR MILK PRODUCTS IN AUSTRALIA
Growing health consciousness among Australian consumers drove the growth of plain yoghurt in 2017. Consumers are shifting from sweetened to unsweetened yoghurt varieties due to sugar concerns and because plain yoghurt has a healthy nutritional profile, being both high in protein and fat. The decline in stigma regarding fat consumption over the review period also boosted the growth of plain yoghurt varieties, particularly Greek-style yoghurt. Accordingly, plain yoghurt was the best performer within yoghurt, recording current value growth of 8% and retail volume growth of 9% in 2016.
Lion Pty Ltd led yoghurt and sour milk products in 2017, with a stagnant value share of 23%. However, Lion’s leading position has declined over the review period, peaking at the start of the review period, in 2012 with a 29% value share. This decline can be attributable to the decreasing share of the mainstream fruited and flavoured yoghurt brand Yoplait. This was observed in flavoured yoghurt, where the value share Yoplait Lite declined from 7% in 2012 to 4% in 2017, while Yoplait Formé also observed a decline in value share over the review period. On the other hand, Jalna Dairy Foods gained value share of flavoured yoghurt increasing from 16% to 21% over the course of the review period, as the brand benefits from its natural positioning, strong supermarket presence and regular new product releases, such as Jalna’s A2 Protein yoghurt, marketed as a healthier alternative to the A1 protein found in regular cow’s milk. This is due to Australian consumers showing a preference for more natural and less processed yoghurt. In addition, consumers are also enjoying indulgent and premium-style dessert yoghurt.
Plain yoghurt is set to record the strongest growth over the forecast period, recording an 8% retail volume CAGR. This is due to consumers choosing yoghurt with a natural positioning, such as Greek yoghurt, and is supported by the entrance of new healthy yoghurt variants, such as traditional Icelandic Skyr yoghurt, released in Coles in August 2017.
OTHER DAIRY IN AUSTRALIA
Other dairy recorded 1% current value growth, the first time since 2012 that the category has experienced positive growth. This improvement was particularly influenced by the positive performances of plain condensed milk and cream with respective current value growth rates of 5% and 3% in 2017. Organic cream, the fastest growing category in other dairy, is supported by the small size of the category and a growing interest in health and wellness amongst Australian consumers. Growth was spurred by an increasing number of Australians cooking gourmet meals at home, popularised by cooking shows such as MasterChef and My Kitchen Rules, as well as the perception that dairy fats can in fact be healthy, with a number of media outlets reporting on studies showing that a healthy diet can include moderate consumption of full fat dairy.
Lion Pty Ltd remained as the leader of other dairy in 2017, with a retail value share of 20%, a marginal increase on the previous year. The company held a substantial value share of 34% within chilled dairy desserts in 2017. This was largely attributable to the ongoing strength of the Dairy Farmers brand of custard, which remains popular amongst consumers of a varied age range and increased its value share in dairy desserts to 19% in 2017, a gain of three percentage points. However, Dairy Farmers’ value share in cream declined over the review period, from 13% in 2012 to a 5% value share in 2017. During this same period, private label brands, Coles, Woolworths and Aldi, witnessed their shares increase owing to their competitive unit prices. In addition, health consciousness amongst consumers resulted in a significant decline in the Yo-Go and Yoplait Le Rice brands over the review period.
Over the forecast period, other dairy is anticipated to record a 1% value CAGR at constant 2017 prices. This is in contrast to the -3% value CAGR witnessed over the review period. Other dairy that is utilised for cooking such as condensed milk and cream are anticipated to record stronger growth over the forecast period than the review period, with both expected to record a retail volume CAGR of 3%. This positive performance has been spurred by Australians continuing to cook indulgent meals at home and diminishing weariness of dietary fats. Private label’s penetration in these categories will continue, driven by the growing number of Aldi stores and growing popularity of supermarket private label products. Due to this, unit price growth within condensed milk will remain sluggish while cream unit prices are anticipated to decline over the forecast period.
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The Dairy in Australia market research report includes:
Analysis of key supply-side and demand trends
Detailed segmentation of international and local products
Historic volumes and values, company and brand market shares
Five year forecasts of market trends and market growth
Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
What is the market size of Dairy in Australia?
What are the major brands in Australia?
How has the economic downturn impacted sales performance given its staple food status?
Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
How are volatile farmgate prices for milk impacting retail prices and sales performance?
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Gain competitive intelligence about market leaders
Track key industry trends, opportunities and threats
Inform your marketing, brand, strategy and market development, sales and supply functions
Summary 11 Wesfarmers Ltd: Competitive Position 2017
Packaged Food in Australia - Industry Overview
Packaged food growth driven by demand for convenience
Foodservice trends penetrate packaged food
Aldi Stores Supermarkets continues to lead packaged food
Most Australians continue to buy packaged food in supermarkets
Modest growth predicted over the forecast period
KEY TRENDS AND DEVELOPMENTS
Health and wellness and the environment
Consumers’ love affair with snacking shows no signs of slowing
Amazon to focus on fresh food at the expense of packaged food
Consumers demand better quality food experiences
FOODSERVICE: KEY TRENDS AND DEVELOPMENTS
Trends: Sales to Foodservice
Trends: Consumer Foodservice
Table 1 Foodservice Sales of Packaged Food by Category: Volume 2012-2017 Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2012-2017 Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2017-2022 Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2017-2022
Table 5 Sales of Packaged Food by Category: Volume 2012-2017 Table 6 Sales of Packaged Food by Category: Value 2012-2017 Table 7 Sales of Packaged Food by Category: % Volume Growth 2012-2017 Table 8 Sales of Packaged Food by Category: % Value Growth 2012-2017 Table 9 GBO Company Shares of Packaged Food: % Value 2013-2017 Table 10 NBO Company Shares of Packaged Food: % Value 2013-2017 Table 11 LBN Brand Shares of Packaged Food: % Value 2014-2017 Table 12 Penetration of Private Label by Category: % Value 2012-2017 Table 13 Distribution of Packaged Food by Format: % Value 2012-2017 Table 14 Distribution of Packaged Food by Format and Category: % Value 2017 Table 15 Forecast Sales of Packaged Food by Category: Volume 2017-2022 Table 16 Forecast Sales of Packaged Food by Category: Value 2017-2022 Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2017-2022 Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2017-2022
Summary 12 Research Sources
Why buy this report?
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.