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The global dairy industry is worth a staggering USD 498 billion, while domestically Australia and New Zealand account for USD $8.6 billion and USD $2.2 billion, respectively.
These two countries have experienced sustained growth over the past five years illustrating a healthy picture for the future of the industry within the region. However certain key categories, such as yogurt and other milk alternatives are outperforming other products within the dairy space. Let’s explore the drivers behind the growth of these two categories in Australia and New Zealand.
Why are consumers flocking to the dairy isles of their local supermarkets and what exactly are they valuing? Health is an overriding concern for consumers in Australia, according to market research company, Euromonitor International. What we eat, whether it is organic, sourced locally or is environmentally friendly are questions often evaluated by Aussie consumers. These considerations are at the forefront of manufacturer’s minds and have a strong impact on what goes into our food, how it is packaged and distributed.
As consumers become more educated about what goes into their dairy products, they are getting fussier. This is pushing local companies to be proactive in diversifying their product lines to cater for different consumer demands, significantly impacting the growth of milk alternatives.
The category is evolving quickly, with close to 6% compound annual growth rate (CAGR) in value expected for both Australia and New Zealand in the next five years. Interestingly, the pace of other milk alternatives is growing at a faster rate than soy drinks, the category that historically drove the growth of milk alternatives.
Manufacturers in Australia and New Zealand now provide a large milk alternative range for consumers including almond milk, coconut milk, rice milk, goat milk and even hemp milk.
Australia – Other Milk Alternatives value growth USD millions (2016-2024)
In addition to a growing appetite for plant-based milk alternatives, the appetite for yogurt has also expanded in Australia and New Zealand. Yogurt sales are expected to proliferate during the next five years according to Euromonitor. With a 4.5% value growth (CAGR) in 2018, Australia surpassed the global growth average of 4%. Yogurt’s repositioning as a healthy snack option has accounted for these prominent growth figures, tying into the trend of healthy living as a driver of dairy sales.
Australian and New Zealand consumers are attempting to live healthier lifestyles and have found milk alternatives and yogurt products to assist them on this journey. Manufactures must tap into this opportunity to drive and improve their profit margins over the next decade or risk falling behind the herd.
To learn more, please visit: A Snapshot of the Dairy Industry