Australians eat more dairy-fuelled pasta, pizza due to inflation

Switching protein for pasta to beat the cost of living? You’re not alone, with the dairy sector set to benefit from the trend.

Australians are opting for fettuccine over filet mignon when dining out — and an industry insider says the dairy sector is set to benefit.

Fonterra brand marketing head Rachel Irwin told a Melbourne industry function this week that persistent retail inflation had altered dining choices in the past two years.

Pubs and restaurants had witnessed a decline since the 2022 inflationary peak in purchases of more expensive menu options that hover between $40 and $60, in favour of pizza and pasta dishes in the $20 to $30 price bracket.

“People are still wanting to dine out but they don’t necessarily have that wallet to pay for more premium-end steak and other premium options,” Ms Irwin said.

“Take pubs and clubs for example. Big pubs in Sydney and Brisbane are seeing an uptake in pizza purchasing.

“So people still want to go out, they still want to have pizza with their family.

“Therefore, we need to serve up the best cheese, that’s going to give them the best experience — the best stretch, the best taste profile — and also keep that foot traffic going into the pubs.”

This week, Reserve Bank governor Michele Bullock said Australia’s rate of inflation had eased significantly from highs above 7 per cent in 2022 to now rest around 3.6 per cent — still higher than the central bank’s preferred bracket of 2 to 3 per cent.

Hospitality has suffered as a result with a number of high-profile Melbourne and Sydney pubs and restaurants closing, while takeaway food operators have been more economically shock resistant.

Ms Irwin said as consumers become more price-conscious, explaining the Australian-made credentials of dairy produce to diners increased in importance.

“Food-service in Australia is about a $15 billion business overall — dairy is about 35 per cent of a $1.3 billion chunk,” she said.

“A large hotel chain has approached (Fonterra) to tell a story with them — take a round piece of butter for instance. On the menu, we can say ‘this is where the butter is sourced from’, these are the sustainability practices and so on.”

Figures released by Dairy Australia last month show cheese consumption rose a modest 1.7 per cent in the 12 months to March 2024, with shoppers snapping up 162 kilotonnes of cheddar, feta and mozzarella.