Consumers embracing dairy

The three macro-trends driving dairy consumers

Dairy
Going gourmet: Dairy consumers are no longer simply looking at price to dictate their buying habits. Picture: Shutterstock

Going gourmet: Dairy consumers are no longer simply looking at price to dictate their buying habits. Picture: Shutterstock

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Dairy analysts says there are three trends driving the dairy market.

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Queensland's dairy supply chain is seeing a demand for top shelf products, with consumers willing to put their hand in their back pocket for a product that best reflects themselves.

Data collected by Nielsen Homescanrevealed that in 2020, organic milk (fresh milk) sales increased more than 25 per cent on the year before, compared to non-organic fresh milk sales which grew only 3.5pc.

Organic milk makes up 1.3pc of total milk sales, while only accounting for 0.9pc of product sold.

Dairy Australia senior industry analyst Sofia Omstedt said shoppers see these types of diverse dairy products as a way to give back and are willing to pay a premium price.

"Consumers want to support local businesses, they want to support local farmers and the industry," she said.

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Ms Omstedt said consumers were no longer simply looking at price to dictate their buying habits.

"In the past we've seen the dairy industry be very focused on price competition for consumers in the retail space," she said.

"Now consumers are more and more willing to pay that premium for a product they think delivers an additional value to them."

Ms Omstedt outlined three major consumer trends seen across the country at the moment.

  1. Health: Consumers are willing to pay more for a product if it fits in with their healthy lifestyle and delivers a health benefit to them.
  2. Individualisation: Consumers want to express themselves through what they purchase. Consumers are no longer looking for a one size fits all.
  3. Indulgence: Consumers are looking to dairy products to enjoy themselves and entertain people with rich and flavourful produce.

The pandemic is believed to be a major driver behind these consumer trends, and Ms Omstedt said the pandemic had changed the dairy landscape.

"COVID-19 has completely upended the traditional domestic market for dairy consumption in Australia," she said.

Australia has traditionally been a "mature-market", which means there is not usually any significant changes in the amount of product purchased, with sales usually tracking at the same pace as population growth.

However, the pandemic is changing that behaviour.

"When COVID-19 hit we saw a massive surge of buying, part of this was panic buying but that purchasing is still holding up, especially in the retail space," Ms Omstedt said

"Consumers are just buying a lot more dairy products to have and consume at home.

"2020 was a bit of an anomaly year, there was a significant type of demand for all types of product from private label milk to artisan ice creams."

Ms Omstedt said the entire dairy industry needed to be conscious of the change in consumer behaviour and understand that shoppers were looking at their dairy as a reflection of their personality.

"The longer term trends show consumers are now willing to pay a premium for a good quality product that they think delivers additional value," she said.

"People are more individualised, consumers care more about having a specific type of milk in their coffee, or only getting butter from the local producer because it is seen as a way of expressing yourself as more of an individual."

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The story Consumers embracing dairy first appeared on Queensland Country Life.

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