Australian manufacturers produce a range of fresh dairy products, including yoghurts, dairy desserts, chilled custards and creams, dairy dips and frozen products such as ice-cream.
Yoghurts 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 includes strong international brands, such as Ski, Yoplait and Nestlé. There is an ongoing trend within the yoghurt category, away from sweetened and flavoured varieties towards more traditional, unflavoured varieties of yoghurt, such as Greek-style yoghurts, which is perceived to be healthier and more ‘natural’. Sales of these unflavoured, traditional varieties have overtaken those of sweetened and flavoured yoghurts, and now account for more than 50% of the market.
Growth in yoghurt 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 yoghurts.
Dairy desserts are a low volume/high value dairy category with steadily 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 declines in recent years despite manufacturers expanding their product offerings into small, snack-sized, single-serve plastic cups sold in multi-packs.
The grocery market for cream has expanded in recent years − with increased interest in cooking seeing more people preparing meals at home and hence supporting sales. Regular and sour creams are both used extensively as accompaniments or ingredients; but face significant competition on the health front, often from other dairy products, such as natural yoghurt. Nevertheless, like butter, consumers remain interested in cream’s superior taste and cooking functionality.
Dairy dips are another low volume / high value dairy category; this one 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 – around 18 litres per head and third only to New Zealand and the United States. The market is stable in volume terms and highly seasonal in certain stick line or single serve segments.
The major market development for ice-cream in recent years has been in premium indulgent treats, in both stick lines and smaller-sized take-home tubs. Refreshing fruit-based, ice-cream products are also popular with consumers seeking a healthy option within the category.
Strong international brands, such as Streets (from Unilever), Peters (from R&R Ice Cream) and Cadbury (from Mondelez) dominate the category.