THE cost of living crisis has resulted in a number of mindset changes when it comes to grocery shopping, with dairy affected both positively and negatively.
Consumer trends was one of the topics outlined within Dairy Australia industry analyst Eliza Redfern's March-quarter Situation & Outlook Report overview at the recent DairySA Central Conference in Hahndorf, South Australia.
"Consumers are changing the way they spend their money to fit within new budgets, to save money," she said.
"Dairy is quite lucky in that it is considered a staple product within Australia and utilised in many different ways. And this has resulted in the volume sold increasing for most products."
However, Ms Redfern said one cost-cutting method was buying more private label products, instead of branded, especially in the fresh milk retail space.
"This is the first time that the market share - based on value - is 50:50 between private label and branded milk products," she said.
Also driving the increase in volume sold was more consumers eating at home, especially since the pandemic.
"Consumers are spending less on takeaway and in restaurants - the expenditure is still up because of inflation and higher menu prices - but the amount of times people are eating out is much less than two years ago," Ms Redfern said.
"They are also purchasing more within retail to make lunches at home to take to work, again spending less outside of the home."
Ms Redfern said cheese, dairy spreads, and yoghurt were all being purchased more frequently because of that trend.
"Yoghurt especially, driven by that health perception, that immunity side of things, that really boosted sales during the pandemic and has continued to carry through because yoghurt remains a convenient-sized item," she said.
"Yoghurt is a perfect snack to take on the go and that has really supported the volume sold (up 5.7 per cent to 188 kilotonnes)."
Milk was the only category that declined when it came to the take home volume sold (down 1.6pc to 1390 million litres).
"There's been a new emerging trend of 'right sizing' - people evaluating the pack sizes of products they are purchasing as a way to minimise waste," Ms Redfern said.
"Historically, downsizing/upsizing/saving food waste was driven from a sustainability and environmental mindset.
"Now, that mindset is shifting towards the wasting of money.
"People that were purchasing two 2L milk bottles, and then only using 1.5 of those bottles, were thinking 'I've effectively wasted that money', so I need to reevaluate what I'm buying to save costs here."
Ms Redfern said consumers were moving towards buying more 1L and 3L bottles of milk.
"So much so, that now 3L bottles are the most common pack size of fresh milk, when historically it was the 2L," she said.
"It's this consumer adjustment that has weight on that total volume sold."
The volume market share of the fresh milk packsizes in retail are:
- 1L: 10pc (10pc YA)
- 2L: 43.4pc (45.8pc YA)
- 3L: 46.6pc (44.2pc YA)
- Based off the volume sold over the 52 weeks to 28/01/2024 vs YA (YA = the same 52 week period one year ago)
Alisha Fogden
Journalist at Australian Community Media newspapers since 2007.
Journalist at Australian Community Media newspapers since 2007.
