Executive Summary

Sep 2018
Prospects
Strong growth continues

Artisanal trends continued to influence cheese in 2018, a continuation of review period trends. This sophistication of consumers’ preferences, as well as increasing commodity prices, drove value growth in 2018; however, the easing of commodity price pressure meant that value growth was much lower than observed in 2017, but marginally higher than the average value growth for the overall review period.

Artisanal trends drive performance of soft cheese

Soft cheese continued to be the strongest performer in value terms in 2018, although its total value share was much lower than that of packaged hard cheese. The strong growth exhibited by soft cheese continued a trend exhibited throughout the review period, due to increasing distribution and strong new product development, particularly from artisanal brands supported by major dairy players such as Puhoi Valley (Goodman Fielder) and Kapiti (Fonterra Brands).

Unit price growth stabilises

Following strong unit price growth in 2017, driven by increasing commodity prices, and particularly felt in packaged hard cheese, unit price growth in cheese stabilised in 2018. Due to its overall influence on the performance of cheese held by packaged hard cheese, the latter’s stagnant unit price growth strongly influenced the low unit price growth observed in cheese in 2018.

Competitive Landscape
Anchor brand fully under Fonterra’s control

Fonterra Brands (NZ) Ltd continued to lead cheese, gaining strong value share in 2018, with the company leading all constituent categories. The Anchor brand is now fully under its control across all dairy categories, with cheese the last category to be acquired from Goodman Fielder.

Goodman Fielder loses second rank to Dairyworks

After fully losing its distribution of Anchor, Goodman Fielder lost strong value share and fell to third position behind Dairyworks in 2018. However, in line with artisanal trends, the company started to focus on growing its Puhoi Valley brand.

Artisanal presence expands

In line with artisanal trends, a number of local niche players managed to increase their distribution capabilities by securing agreements with major supermarket chains. Whitestone Cheese Co and Massimo’s Italian Cheeses are among the local players to secure supplier agreements with Foodstuffs, Progressive Enterprises and Nosh Foodmarkets.

Prospects
Strong new product development drives growth

Strong new product development continued to be observed, focusing on specific products that cater to health and wellness concerns among local consumers. Their preferences have shifted towards more natural and less processed products.

Grey market drives growth of powder milk

While strong new product development within dairy only flavoured milk drinks drove sales growth for domestic consumption, value growth was lower than that observed by powder milk, which was one of the most dynamic categories in 2018. The growing presence and penetration of the “grey market” for powder milk sales helped drive its performance, with powder milk popular among Asian tourists, and thus often found predominantly in souvenir shops and in duty free areas at airports.

Unit prices stabilise

High commodity prices in 2017 witnessed strong growth in unit prices, although they stabilised in 2018, and as such unit price growth was much lower compared to the previous year. Forecast period unit price growth is expected to be more subdued than witnessed in 2017, owing to increasing price competition, particularly in higher growth categories such as organic milk.

Competitive Landscape
Fonterra Brands continues to lead

Supported by its leading Anchor brand, Fonterra Brands continued to lead drinking milk products in 2018. The performance of the company, and in particular Anchor, was attributable to its leadership of fresh milk, which was the largest category within drinking milk products in 2018.

Lewis Road Creamery the key purveyor of innovation

Local player Lewis Road Creamery continued to gain value share within drinking milk products, despite being considered a niche offering in comparison to Fonterra Brands and Goodman Fielder. The company has developed a reputation as one of the leading and most successful innovators in drinking milk products, following the successful 2015 launch of the co-branded product Lewis Road Creamery Fresh Chocolate milk, incorporating the Whittaker's 5 Roll Refined Creamy Milk Chocolate.

Goodman Fielder retains second ranking

Retaining its second position in overall drinking milk products, Goodman Fielder also ranked second in flavoured milk drinks and fresh milk I 2018. The company’s position is largely due to its Meadow Fresh, which introduced Meadow Fresh with No Added Permeate in 2017 to cater to consumer preferences for less processed products.

Prospects
Flavoured yoghurt drives overall performance

Strong growth within flavoured yoghurt helped drive the overall performance of the category in 2018, with its value growth rate corresponding to overall yoghurt and sour milk products. Strong flavour innovation, particularly in Greek style yoghurt, helped to drive value growth in the category.

Drinking yoghurt is strongest performer

While remaining the smallest category within yoghurt and sour milk products, drinking yoghurt was the strongest performer in value terms in 2018. The strong performance of the category was attributable to new product development focused on single serve offerings targeting children, offering healthy and nutritious snack options.

Strong unit price growth driven by premiumisation and new product development

Higher levels of premium position and strong new product development, particularly in flavoured yoghurt, helped drive strong unit price growth in 2018. Increasing levels of new product activity focusing on more premium products, as well as limited growth in pack sizes, helped drive unit price growth.

Competitive Landscape
Fonterra Brands continues to lead

Fonterra Brands (NZ) Ltd continued to lead yoghurt and sour milk products in 2018. The company led plain and flavoured yoghurt, while ranking fourth in drinking yoghurt.

Goodman Fielder retains second rank

Goodman Fielder continued to rank second in 2018, with stable value share. The company’s performance was largely derived from its leadership of drinking yoghurt, while it was ranked second in flavoured yoghurt.

Innovation driving Epicurean Dairy’s Growth

Local player Epicurean Dairy Holdings was one of the standout performers in the category again in 2018, with its strong new product development driving the overall performance of drinking yoghurt. Through brand The Collective, the company has been at the forefront of driving the popularity of pouch drinking yoghurt as a snack option for children during the review period, and is thus well placed to be one of the strongest performing brands over the forecast period.

Prospects
Lack of innovation hampers growth

While other dairy retained high levels of penetration, particularly in cream, the increasing presence of private label, as well as an overall lack of innovation in comparison to other categories within dairy, resulted in other dairy exhibiting the lowest growth within dairy in 2018. Lack of association with health and wellness and premiumisation trends – which is the focal point of innovation in competing dairy categories – is expected to hamper its performance over the forecast period, with the lack of dynamism expected to offset any gains made due to increasing penetration, although natural consumer demand is expected to remain.

Cream driving overall category performance

Cream was the strongest performer within other dairy in 2018, driving the performance of other dairy overall. The category remained the largest within other dairy in value share terms.

Coffee whiteners faces obsolescence

Coffee whiteners remained the weakest performer in 2018, exhibiting current value decline, a continuing theme throughout the review period. It continued to suffer from declining consumer demand, with New Zealanders enjoying fresh milk, particularly frothed milk through the influence of café-style coffee.

Competitive Landscape
Fonterra Brands continues to lead

Perhaps unsurprisingly given its dominant status within dairy in New Zealand, and the fact that other dairy is dominated by cream in value terms, Fonterra Brands continued to lead other dairy in 2018. The company’s performance was driven by its leadership of cream, while it also led chilled and shelf stable desserts.

Goodman Fielder ranks second

Goodman Fielder continued to rank second within other dairy in 2018. The company led fromage frais and quark, whilst it also ranked second in both chilled and shelf stable desserts and cream.

Private label improves share

Owing to price sensitivity among local consumers, as well as increasing product portfolios, private label gained value share within other dairy in 2018. Particularly noticeable was the improving performance of the private label lines of both Foodstuffs and Progressive Enterprises in cream, where they aggressively compete with Fonterra Brands and Goodman Fielder, due to the relatively straightforward nature of the category meaning that price becomes a key determinant in consumers’ decision making.

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Dairy in New Zealand

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in New Zealand with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in New Zealand, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in New Zealand 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 New Zealand?
  • What are the major brands in New Zealand?
  • 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?

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

This industry report originates from Passport, our Packaged Food market research database.

Dairy in New Zealand - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Stabilisation following commodity price spikes in 2017
Commodity prices influence performance of butter
Low unit price growth predicted overall

COMPETITIVE LANDSCAPE

Unilever retains leadership
Fonterra leads butter
Private label’s value share increases

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2013-2018
Table 2 Sales of Butter and Spreads by Category: Value 2013-2018
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2013-2018
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2013-2018
Table 5 NBO Company Shares of Butter and Spreads: % Value 2014-2018
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2015-2018
Table 7 Distribution of Butter and Spreads by Format: % Value 2013-2018
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2018-2023
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2018-2023
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2018-2023
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2018-2023

Cheese

HEADLINES

PROSPECTS

Strong growth continues
Artisanal trends drive performance of soft cheese
Unit price growth stabilises

COMPETITIVE LANDSCAPE

Anchor brand fully under Fonterra’s control
Goodman Fielder loses second rank to Dairyworks
Artisanal presence expands

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2013-2018
Table 13 Sales of Cheese by Category: Value 2013-2018
Table 14 Sales of Cheese by Category: % Volume Growth 2013-2018
Table 15 Sales of Cheese by Category: % Value Growth 2013-2018
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018
Table 17 Sales of Unprocessed Cheese by Type: % Value 2013-2018
Table 18 NBO Company Shares of Cheese: % Value 2014-2018
Table 19 LBN Brand Shares of Cheese: % Value 2015-2018
Table 20 Distribution of Cheese by Format: % Value 2013-2018
Table 21 Forecast Sales of Cheese by Category: Volume 2018-2023
Table 22 Forecast Sales of Cheese by Category: Value 2018-2023
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2018-2023

Drinking Milk Products

HEADLINES

PROSPECTS

Strong new product development drives growth
Grey market drives growth of powder milk
Unit prices stabilise

COMPETITIVE LANDSCAPE

Fonterra Brands continues to lead
Lewis Road Creamery the key purveyor of innovation
Goodman Fielder retains second ranking

CATEGORY DATA

Table 25 Sales of Drinking Milk Products by Category: Volume 2013-2018
Table 26 Sales of Drinking Milk Products by Category: Value 2013-2018
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2013-2018
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2013-2018
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2014-2018
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2015-2018
Table 31 Distribution of Drinking Milk Products by Format: % Value 2013-2018
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2018-2023
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2018-2023
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2018-2023
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2018-2023

Other Dairy

HEADLINES

PROSPECTS

Lack of innovation hampers growth
Cream driving overall category performance
Coffee whiteners faces obsolescence

COMPETITIVE LANDSCAPE

Fonterra Brands continues to lead
Goodman Fielder ranks second
Private label improves share

CATEGORY DATA

Table 36 Sales of Other Dairy by Category: Volume 2013-2018
Table 37 Sales of Other Dairy by Category: Value 2013-2018
Table 38 Sales of Other Dairy by Category: % Volume Growth 2013-2018
Table 39 Sales of Other Dairy by Category: % Value Growth 2013-2018
Table 40 Sales of Cream by Type: % Value 2013-2018
Table 41 NBO Company Shares of Other Dairy: % Value 2014-2018
Table 42 LBN Brand Shares of Other Dairy: % Value 2015-2018
Table 43 Distribution of Other Dairy by Format: % Value 2013-2018
Table 44 Forecast Sales of Other Dairy by Category: Volume 2018-2023
Table 45 Forecast Sales of Other Dairy by Category: Value 2018-2023
Table 46 Forecast Sales of Other Dairy by Category: % Volume Growth 2018-2023
Table 47 Forecast Sales of Other Dairy by Category: % Value Growth 2018-2023

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Flavoured yoghurt drives overall performance
Drinking yoghurt is strongest performer
Strong unit price growth driven by premiumisation and new product development

COMPETITIVE LANDSCAPE

Fonterra Brands continues to lead
Goodman Fielder retains second rank
Innovation driving Epicurean Dairy’s Growth

CATEGORY DATA

Table 48 Sales of Yoghurt and Sour Milk Products by Category: Volume 2013-2018
Table 49 Sales of Yoghurt and Sour Milk Products by Category: Value 2013-2018
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2013-2018
Table 51 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2013-2018
Table 52 Sales of Flavoured Yoghurt by Flavour: Rankings 2013-2018
Table 53 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2014-2018
Table 54 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2015-2018
Table 55 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2013-2018
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2018-2023
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2018-2023
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2018-2023
Table 59 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2018-2023

Packaged Food in New Zealand - Industry Overview

EXECUTIVE SUMMARY

Three key trends in packaged food
Innovation drives value growth
Private label refresh from both major supermarket chains
Supermarkets maintain their stronghold
Future economic uncertainty clouds performance forecasts

FOODSERVICE

Sales to Foodservice
Stable growth continues
Plain noodles continues to lead
Goodman Fielder continues to lead
Consumer Foodservice
Uber Eats having a disrupter effect
Post-Lions tour hangover
Health and wellness key driver behind growth
Category Data
Table 60 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 61 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 62 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 63 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 64 Sales of Packaged Food by Category: Volume 2013-2018
Table 65 Sales of Packaged Food by Category: Value 2013-2018
Table 66 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 67 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 68 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 69 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 70 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 71 Penetration of Private Label by Category: % Value 2013-2018
Table 72 Distribution of Packaged Food by Format: % Value 2013-2018
Table 73 Distribution of Packaged Food by Format and Category: % Value 2018
Table 74 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 75 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 76 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 77 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources