Yoghurt and Sour Milk Products in South Africa

PROSPECTS

Health trends focus on gut bacteria and fat content

The health and wellness trend continues to support growth within yoghurt and sour milk products, with such products perceived as being highly nutritious and particularly good at boosting digestive health. In addition, consumers are increasingly prioritising quality in this category and trading up to leading brands.

Shift to higher quality products and increasing production costs fuels unit prices

Average unit prices continue to rise within yoghurt and sour milk products due to increasing input costs. Although there was a surplus of raw milk production during the review period, this was counterbalanced by the rising cost of fuel and an increase in VAT from 1 April 2018.

Healthy snacking trend in focus

Yoghurt is most often consumed on its own as a snack. However, it is also increasingly used in cooking or with breakfast cereals, with the latter trend being particularly strong among affluent health-conscious consumers.

COMPETITIVE LANDSCAPE

Strong marketing and innovation consolidates Danone’s leading position

Danone remains the clear leader in yoghurt and sour milk products in value terms in South Africa. The company benefits from its extensive product range and strong brands, with Nutriday and Inkomazi Maas remaining highly popular among consumers.

Growth potential highlighted by strong product development and acquisition activity

Clover remained in second place in yoghurt and sour milk products in 2019, far ahead of third ranked Parmalat. The company significantly increased its value share over the review period due to its purchase of Dairybelle’s yoghurt operations in 2014, with new brands continuing to expand its portfolio in line with the terms of the acquisition.

Growing competition from low cost private label ranges

Private label ranges are strongly positioned in yoghurt and sour milk products and continue to gain sales share. Such ranges benefit from strong consumer trust, with demand being boosted by increasing price-sensitivity at the end of the review period.

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