Inflation set to alter consumer behaviour with dairy purchases

The pandemic has fuelled dairy consumption, but buyers are slowly starting to cut back. Here’s the industry’s plan to defy inflation.

Twelve-dollar iceberg lettuces are getting plenty of attention from price-conscious shoppers.

But inflation concerns are yet to hit dairy sales, a market analyst says.

NielsenIQ director Faith Lamont was part of an industry panel at a recent Dairy Australia conference in Melbourne.

Ms Lamont’s research showed just 14 per cent of respondents said they were struggling financially but 65 per cent were more spending-conscious as prices rose.

“We will see lot of change in loyalty, whether that’s to retailer or brand, but we are not quite seeing it just yet,” Ms Lamont said. “Because dairy is more of a staple product, it is more likely to maintain stability in its share of (supermarket) sales. Milk prices particularly haven’t risen like what we’ve seen in other categories.”

However, Ms Lamont said potential price rises — be it milk, cheese, butter or yoghurt — needed to be explained to shoppers through marketing.

Changes in consumer behaviour since the end of coronavirus-era lockdowns have been registered in the latest Nielsen Homescan data, included in DA’s Situation and Outlook Report.

Milk consumption nationwide sits at 1.4 billion litres as of March 2022, a year-on-year decline of 3 per cent. In the same survey period, butter and butter blends dropped 4.4 per cent.

Cheese and yoghurt figures saw little change with Aussies going through 187 kilotonnes of cheddar, blues and soft cheese to post a 1.4 per cent decline year-on-year. Yoghurt sales over the same period rose slightly — 0.9 per cent.

Warrnambool born and bred, AFL great Jonathan Brown is a Dairy Australia ambassador. Picture: Nicole Cleary

BROWNY SPRUIKING MILK’S HEALTH CREDENTIALS

Nutritious and delicious, milk, cheese and yoghurt have been part of the Australian diet for generations.

But in an era of greater information and misinformation, the dairy sector has had to work to correct perceptions that its produce is seemingly unhealthy as the vegan movement broadens its reach.

In a presentation to the United Dairyfarmers of Victoria conference recently, Dairy Australia marketing strategy manager Glenys Zucco outlined how consumer perceptions of dairy had altered over the past decade.

Ms Zucco said DA had monitored the reasons behind dairy avoidance or reduced consumption since 2009. Thirteen years ago, 50 per cent of respondents said they tried to avoid dairy because they were “watching their weight”.

“There was a perception then that somehow dairy was fattening, with 50 per cent of those surveyed saying that’s why they reduced their dairy intake,” Ms Zucco said.

That view persisted in a 2011 survey with a top response of 35 per cent of those surveyed saying they avoided dairy “to reduce saturated fat intake.”

“In recent surveys, there’s been a trend away from perceiving dairy as somehow fattening. Now there’s a range of misconceptions that feed into dairy avoidance,” Ms Zucco said.

In the latest consumer survey conducted earlier this year, the top response was that dairy was “not healthy” or that “too much was not healthy.”

Ms Zucco said Dairy Australia’s latest marketing campaign covered three broad areas over the past 18 months with broadcaster and AFL legend Jonathan Brown as industry spokesman.

The first stage of the campaign, in early 2021, was focused on support for farmers while the latter half of the year was linked to Brown’s athleticism and dairy’s broader health benefits.