A VITAL PART OF OUR BUSINESS

—by Antoinette Laird, Head of External Relations, Foodstuffs (NZ) Ltd

Milk is a vital category for the business – it’s on most Kiwi households’ weekly shopping list, but naturally it’s just part of what we offer. We’re all about ensuring our customers have access to a wide range of convenient, quality, healthful and innovative products, which are also good value for money. This includes milk and a whole host of other dairy products.
Cheese is a big growth area. Figures supplied by Nielsen show the value of cheese sales (excluding cultured cheeses) were up 5 percent last year, to almost $400 million for all NZ supermarkets.
Likewise, sales of yoghurt and “dairy food” desserts have risen consistently for each of the past two years, with 2016’s sales up 5 percent on 2014.
Growth has been more consistent for ice cream, rising by about 4 percent each year for the past two years, taking total NZ supermarket sales to $187 million in 2016. Here, premiumisation is driving growth, with more consumers prepared to pay a little more for a bit of luxury.
Premium milk is also driving category growth, with more suppliers offering organic options and innovative flavours.
That said, there was a significant drop in the total value of milk and cream sales after 2014, falling by about 4 percent in 2015 to $440 million, where it stayed in 2016. It should be noted, though, that 2014 was the year the global price of whole milk powder tumbled; translating into savings for shoppers.
Growth has been somewhat restrained in cultured cheeses (e.g. cottage cheese and sour cream). This category was worth around $54 million in 2016, up only 2.7 percent on 2014.
Healthier options are currently on trend across dairy, as they are across a large proportion of other supermarket categories. Shoppers are wanting low-fat, unsalted and low-sugar options.
Convenience is a key future trend. Consumers are increasingly looking for products that save time with single-serves or options requiring little or no preparation before going into meals and lunchboxes.
We do not believe non-dairy alternatives have eroded the traditional dairy market, largely because non-dairy shoppers and traditional dairy shoppers differ significantly. Rather, traditional dairy shoppers are trading up to the premium and healthier offerings, while non-dairy alternatives such as coconut yoghurt are bringing in shoppers who would have bypassed the dairy category in the past.