COVID-19 has been negatively impacting all yoghurt categories in 2020, with consumers prioritising basic and essential groceries during the social isolation period. In addition, products with greater levels of added value, such as zero lactose and light yoghurts, have been recording falling sales, including protein yoghurts, which were recently launched in 2019 and were seeing dynamic growth in the first few months of 2020, but then saw a sharp decline in sales with the arrival of the pandemic, mainly because fitness centres were closed at the pandemic’s peak and, even after they reopened, were still subject to a number of restrictions to avoid attracting crowds and to maintain high hygiene levels.
Consumer have been opting to purchase family packs of yoghurts over on-the-go ones due to the better value offered. The closing of schools and offices also had a negative impact on sales of single packs in this period.
The main multinationals in the category – Danone, Dairy Partners, Yakult and Lactalis – sought to focus their production on the most in-demand items during the pandemic and to relocate supply teams to the main retailers, with special attention paid to supermarkets and hypermarkets, but also small retailers as well as large ones such as the well-known atacarejos mixed retailers.
One interesting phenomenon observed during the pandemic, including the long period of social isolation that happened across the country, was the increase in the consumption of fermented products in drinking yoghurt among consumers. These products, which had been seeing declining sales volumes in previous years, not least because of their higher unit prices, have been performing positively in the pandemic period due to their position as being linked to increased immunity.
From 2021, increasing health and wellness trends and busier lifestyles, with a hoped-for economic recovery, are expected to drive growth in drinking yoghurt due to consumers seeking healthier products, and preferring convenient packaging formats that allow for on-the-go consumption.
Nestlé and Fonterra have already announced their intention to sell DPA, a joint venture in yoghurt, at a time of weak demand. The players have not been able to pass on the high costs of milk to end consumers, which is affecting their profit margins.
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