Cheese is the biggest dairy category in value terms and it continues to grow in both volume and value terms. There are various reasons for this.
Snacking cheese is becoming increasingly popular. Cheese is seen as a healthier snacking option than sugar-laden snacks.
Consumers are looking for naturally healthy products as well as locally produced cheese. This poses a challenge to international brands, in particular.
Domestic producers continued to lead cheese in 2019 in the shape of Berglandmilch and Gebr Woerle, with their well-known Schärdinger and Woerle brands, respectively. Consumers view these companies as high-quality domestic producers, with their products widely available through supermarkets, hypermarkets and discounters across the country.
In order to maintain its leadership in cheese, Berglandmilch naturally offers a wide variety of products, but is also quick to react to new trends. In recent years, the consumption of mozzarella has contributed to an overall increase in soft cheese consumption.
With the possibility of Brexit looming large on the horizon for Irish dairy company Kerrygold, the player is looking for new markets for its products, including in the German-speaking world. With cheddar becoming more popular as it finds its way into the Austrian market, Kerrygold extended its product range in the country.
Alternative dairy products have been on the rise for a number of years in Austria, still representing something of a niche, but enjoying consistently healthy growth rates. Overall milk consumption is declining in volume terms, but the plant-based alternatives continue to gain strength in volume terms, while cow’s milk declines.
Some recent milk drinks are being positioned as energy drinks. As consumers are aware that energy drinks contain a lot of sugar, the dairy energy drink tries to offer a healthier alternative for consumers looking for the same effect but with less sugar.
Consumers have a few options to choose from when it comes to milk without lactose or products that are not milk at all. A2 Milk is claimed to be a kind of milk that can be digested more easily and is enjoying increasing popularity.
Various brands are offering milk alternatives, Alpro being the most widely known brand. More brands and private label lines are offering soy drinks as well as other drinks, based on coconut or rice, for example.
In Austria, domestic milk producers lead drinking milk products. They enjoy a high level of trust and offer regional products.
Combined, private label continued to account for almost half of retail value sales of drinking milk products in 2019, making it a strong competitor for both domestic and international brand manufacturers. Thanks to a successful strategy of investing in premiumisation while still offering products at reasonable prices, private label players managed to attract and maintain a notable consumer base.
Consumers are paying more attention to the ingredients lists of the foods they purchase and consume. In addition, they are differentiating between various ingredients and their impact on their health.
Organic yoghurt is affordable and widely distributed in all major supermarkets. Purchasing organic food, even if it costs a few cents more than non-organic products, gives consumers the feeling of contributing to more sustainable agriculture and is therefore protecting the environment.
Austrian dairy producers and private label lines continue to lead in yoghurt and sour milk drinks. The Alpine region dominates Austria and determines its agriculture, meaning that, as in other dairy categories, Austria has a strong base for domestic producers.
For years, flavoured yoghurt has suffered from an image of being unhealthy, containing lots of sugar and artificial flavourings. However, several traditional brands, such as Nöm’s frufru, manage to be successful, building on nostalgia and trust.
The German brand Ehrmann successfully launched its high-protein yoghurt in Austria. Other brands have also launched yoghurts that are high in protein, for example Nöm launched a whole range of such products.
Consumers are still looking for opportunities to indulge. However, they are more likely to be indulging themselves less often, but with a better-quality product when they do, meaning that they are willing to spend more money on premium products.
While consumers are still looking for products as an indulgence, as they still want to enjoy a dessert, for example. At the same time, consumers are much more conscious of their sugar intake and are therefore looking for products with not too high a sugar content.
Chilled snacks have been successful recently, although the trend towards a healthier diet is impacting all categories, as consumers look for healthier snacks. Sweet products that are high in sugar or other additional sweeteners are particularly suffering at the hands of this trend.
Danone continues to lead other dairy with its brands Danone, Dany, Fruchtzwerge and Obstgarten. The company continued to focus on new product launches and major advertising activity in order to support its brands, with this helping it to register positive value sales growth.
The Chilled Snack Company is an Austrian snack producer that focuses on dairy chilled snacks. It produces products both for private label players as well as branded products such as the Milka Schoko Snack.
Topfen or quark) is a traditional Austrian dairy product. It is also part of many dishes and a relatively stable product area in Austria.
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This industry report originates from Passport, our Packaged Food market research database.