Consumer convenience drives Australia's Dairy & Soy market 2016–2021
GlobalData’s report ‘Top Growth Opportunities: Dairy & Soy Food in Australia’ predicts that the dairy and soy market will be worth US$13 billion between 2016 and 2021, with a compound annual growth rate (CAGR) of 4%.
This comes after the market value declined 2011–2016 at a CAGR of -2.8% due to the depreciation of the Australian dollar and slow wage growth. As a result, this increased price sensitivity and damaged consumer spending confidence, leading to Australians changing their purchasing behaviour to seek value for money.
However, there was also some value growth of 2.1% during this time, which suggests that consumer buying habits shifted towards searching for better deals and buying in bulk in order to save money.
“The contraction of the market was a stern test for dairy brands on their ability to be flexible and adapt their products towards current consumer needs. During a market downturn it is especially important to accurately read consumers’ requirements. Over the past five years, better value has been a priority; however, this is changing with a return to growth, and manufacturers must once again stay current as consumers become more willing to pay a premium,” said Veronika Zhupanova, analyst at GlobalData.
Consumers are willing to pay more for products that align with their taste, dietary and lifestyle demands. Not only will higher protein content and dietary requirements become more important, but time-poor consumers are increasingly looking for products that are convenient.
“Brands should capitalise on Australian consumers’ readiness to trade up in the Drinkable Yogurt Category and introduce novel formulations in order to stand out and catch consumer attention. These innovations can be unique flavour combinations, such as savoury flavours, unusual for the category ingredients such as spices or super grains, and functional benefits, such as being rich in nutrients that keep consumers full for longer,” Zhupanova stated.
While there will be many trade-ups across a range of categories, the value of drinkable yoghurt is forecast to have a CAGR of 3.5% while the volume will decline. Yogurt and Butter & Spreadable Fats are being labelled as “safe bet” categories as they are expected to show the fastest growth by both volume and value over 2016–2021. These trends could be attributed to consumer demand for convenient, on-the-go, healthy snacks such as yoghurt pots.
Zhupanova explained: “As consumers’ real or perceived feelings of time-scarcity are only going to grow, the demand for products which position themselves as both time-saving and also offering nutritious and healthy energy boosts will grow. In addition to this, functional benefits, such as benefits to digestive health and prolonged satiety, will be among those most sought after by busy Australian consumers.”
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