Fresh products

Australian manufacturers produce a range of fresh dairy products, including yogurts, dairy desserts, chilled custards and creams, dairy dips and frozen products such as ice-cream. To cater for the health concerns of modern consumers—a major driver in food choices—the majority of dairy products are available in low fat formulations.

Yogurts have been a category of considerable growth for the dairy industry over the past two decades, due to their ability to meet consumer requirements for convenient, healthy snacks in an environment of time-poor lifestyles. The segment is dominated by strong international brands, such as Ski, Yoplait and Nestlé. The Danone brand re-entered the local market in 2010/11.

Growth in yogurt sales has been underpinned by regular product innovation in the areas of packaging, flavour combinations and the use of probiotic cultures, as well as new products, such as drinking yogurts.

Marketing support in terms of advertising new product ranges and flavour innovations are important in encouraging consumer trial and subsequent category growth.

Dairy desserts are a low volume / high value dairy category with slowly declining volumes in recent years. Marketed as an indulgence or treat item, these products are generally targeted to adult consumers and include mousses, crème caramels and fromage frais. Children’s products include fromage frais and flavoured custards that often feature popular cartoon characters on-pack.

Chilled custards, a traditional favourite, have shown marginal growth in recent years as manufacturers have expanded their product offerings into small, snack-sized single-serve plastic cups sold in multi-packs.

The overall market for cream has declined in recent years—although recent economic uncertainty saw more people preparing meals at home and hence supporting sales. Regular and sour creams are both used extensively as accompaniments or ingredients, but are facing significant competition on the health front, often from other dairy products, such as natural yogurt.

Dairy dips are another low volume / high value dairy category showing steady volume growth in recent years. Flavour innovations have been particularly successful in maintaining the consumer appeal of another traditional favourite in the dairy case.

Australia’s consumption of ice-cream is relatively high by world standards—generally reported at 18 litres per head and third only to New Zealand and the United States. The market is stable in volume terms, if highly seasonal in certain stick line, or single serve, segments.

The major market development in recent years has been in premium indulgent treats, in both stick lines and smaller-sized take-home tubs. Refreshing fruit-based products are also popular with consumers seeking a healthy option within the category.

Nevertheless, sales of larger tubs (2-litre or greater) and multi-packs of stick lines continue to make up the majority of sales in supermarkets, while mid-range stick lines and ice-cream cones are the major volume products in the route trade.

Once again, strong international brands, such as Streets (from Unilever), Peters (from Nestlé) and Cadbury (from Kraft) dominate the category.