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Australasia is more often than not the smallest region (of the seven classified by Euromonitor International) in terms of consumption of ingredients. This is not surprising given that it only includes Australia and New Zealand, but it is an important market for domestic ingredients manufacturers such as New Zealand-based dairy company Fonterr
Fonterra is a cooperative owned by more than 11,000 farmers in New Zealand (around 96% of all dairy farms in the country). It was formed in 2001 from the merger of New Zealand Dairy Board, New Zealand Dairy Group and Kiwi Co-operative Dairies. It produces both dairy-derived ingredients and consumer products although its ingredients account for the bulk of its sales, at around 74% in 2011. While it is trying to increase sales outside its domestic market, New Zealand and Australia together still account for 21% of its revenue.
Demand for dairy derivatives, including milk products (milk fat, cheese powder, milk powders and whey powder) and dairy proteins (casein/caseinates, milk proteins, whey proteins and protein hydrolysates) exceeded 164,000 tonnes in Australasia in 2010. Volumes are forecast a reasonable CAGR of around 2% over 2010-2015, which although not as strong as that predicted for Asia Pacific (5%) and Latin America (3%) is better than the other mature Western regions of North America and Western Europe, which are both set to register a 1% CAGR.
With regard to dairy-derived ingredients, cheese powder and whey proteins are the strongest performers in terms of growth rates in Australasia. Both are forecast a CAGR of nearly 3% over 2010- 2015. Cheese powder is used in packaged foods such as frozen pizza, pasta sauces and savoury snacks where a cheese flavour is required. Given the continuing rise in demand for convenience foods in Australia and New Zealand, it is easy to see why volumes of cheese powder are forecast to increase. The increase in demand for whey proteins in the region is being driven by the rise in popularity of ready-to-drink (RTD) coffee, particularly in Australia. The category is forecast a CAGR of 5% over 2010-2015.
Hence, while Australasia may be a relatively small player in the ingredients market, there are still opportunities for growth, particularly for those based there.