Bega bulks up as consumers’ protein obsession increases

Protein is no longer just for fitness fanatics, the explosion of protein-rich foods and drinks has unleashed a wave of product innovation. Bega has dived on board, bulking up its high-protein dairy products as it readies to grow.

Dairy Farmers is bulking up its product range with high-protein flavoured milk smoothie drinks.

Bega Group is bulking up its share of the $600m high-protein flavoured milk category as it positions the business to grow as consumer demand surges.

The consumer obsession with high-protein diets has exploded in the past few years, with food manufacturers responding to demand by boosting the protein levels in foods and drinks, and launching new products.

Australian food company, Bega Group, which owns brands including Dairy Farmers, Yoplait, Vegemite, Daily Juice, Farmers Union and Bega, has supercharged its portfolio with a host of protein-rich products rolling out this year.

The company recently launched Dairy Farmers Protein Smoothies, in a bid to grab a slice of the booming protein flavoured milk category, which has grown 88 per cent in the past three years, led by brands such as Pauls, Oak and Rokeby.

In the past year, sales of high-protein milk-based beverages grew 125 per cent, with the category jumping 160 per cent in Q1 over the previous year, according to data from Circana.

Darryn Wallace is the executive general manager of Beverages at Bega Group.

The Dairy Farmers drinks range, which launched in late April, has already sold more than two million bottles, according to Bega’s executive general manager of beverages, Darryn Wallace.

“We’re already selling 22 bottles every minute, and to deliver two million bottles into the market in just two months shows there’s real momentum and demand for our product,” he said.

“We haven’t even got full distribution or marketing yet. We’ve done some work with influencers and social media, but we haven’t unleashed all of the marketing collateral.

“Our challenge is scaling up to continue to meet this demand and accommodate this really big unmet need.”

However, the demand for protein-rich dairy is not limited to flavoured milks, with yoghurt also benefiting significantly as the consumer obsession continues to grow.

Mr Wallace, who has worked in the food and beverage industry for four decades with senior marketing roles at Schweppes, Lion, Kirin and now Bega, said that the category’s potential is unprecedented. “I haven’t seen anything like this before,” he said.

“Yoghurt, in the last 12 months, has been growing at the best part of 50 per cent growth, but it’s been doing that for five or six years now. Yoghurt has household penetration now into the mid-50s, with growth rates closer to 50 per cent.

“While high-protein flavoured milk has really just started to ignite in the last 12 months, it is doubling every month. The category is a $550m retail segment, give or take. I think that will double in the next two or three years, and that is not an extreme forecast.

“The high-protein flavoured milks are only at 13 per cent of household penetration, so there’s a lot of room to grow,” he said.

The protein craze is the culmination of the maturing health, wellness and fitness categories, which have pushed healthy-eating trends to mainstream audiences, advocating a shift away from highly processed foods to more natural and nutrient-dense options, Mr Wallace said.

Dairy Farmers is bulking up its range with the launch of high-protein flavoured milk smoothie drinks.

“Australians continue to be really focused on their overall health and wellbeing and they have a massive hunger for protein. We’ve seen this trend to less-processed foods and more natural products and that has brought people back to dairy.

“Dairy is less processed, it’s natural and it’s got a great macronutrient count as it is a credible natural source of protein. So to elevate that with higher-protein foods whether that’s yoghurt or flavoured milk is proving to be really credible for people,” he said.

The impact of the higher cost of living is also helping to bolster the popularity of protein-rich dairy foods, as well as the ease of purchase and lack of preparation required.

“It plays to this simple narrative that it’s convenient because you can find it in most places, it’s affordable, tastes good and it fits into your lifestyle and time of day. So this sense of convenience is helping it go through the roof. Consumers can get 30g of protein in your beverage, there’s no added sugar, plus, we’ve included prebiotics to help ease digestion, because the next big trend is digestive wellness.”

Mr Wallace said the other element that is keeping the business bullish about the category is the multi-generational appeal of high-protein dairy products.

“It’s appealing to every age group as it’s giving them their protein without the calories, so they can manage weight and feel full for longer. We’re seeing everyone from Gen Zs, through to families and older people.”

The protein-rich dairy categories are also benefiting significantly from the impact of GLP-1 medications, such as Ozempic and Mounjaro, which reduce hunger but also strip muscle mass.

“In the US, where one in 10 households are taking weight management drugs, like Ozempic, what we’re seeing in those households is a 6 per cent reduction in food. But, the category that’s not declining is yoghurt.

“People are saying, I need my muscle mass, I need my muscle strength. So I still need to complement this drug with protein. And yoghurt is accessible, available and affordable and it’s a food you can eat any time of day or night. So we’re seeing yoghurt and high-protein yoghurts really accelerate around the world.”

Dairy Farmers is bulking up its range with the launch of high-protein flavoured milk smoothie drinks.

Bega plans to roll out a host of protein-rich milk and yoghurt products this year, including Dairy Farmers high-protein white milk and a series of high-protein yoghurts across the Farmers Union yoghurt range, which has grown 20 per cent year on year.

Bega is also preparing to leverage the growing trend towards foods that benefit gut health with the launch of its ‘Gut Good’ Farmers Union Greek-style yoghurt range of products.

The trend also showcases the changing food preference in Australia as the once all-popular Yoplait fruit yoghurts have lost ground to the rise of Greek-flavoured and unflavoured varieties.

“Chobani and Yo Pro have done a good job over the last three or four years with traditional and high-protein Greek yoghurt,” Mr Wallace said.

But people are tipping out of traditional fruited yoghurts, like Yoplait, which started the yoghurt category in Australia. However, people now are looking for the best white mass yoghurt that they can use in any number of occasions and everyone in the house loves it as well, which is where Farmer’s Union has been a real sweet spot for us,” Mr Wallace said.

Dairy Farmers will kick off marketing activity to support its high-protein smoothie drinks, in the coming months, in a bid to grow awareness and interest. The campaign will leverage the masterbrand campaign ‘Start with Oompf’ launched by Dairy Farmers late last year.

Dairy Farmers is the largest brand in the Bega Group stable.

Bega is one of the largest listed food manufacturers in Australia and last year reported revenue of more than $3.5bn.