Flavoured milk category records positive growth

A recent BMi Research report confirms that the flavoured milk category recovered some of the volume lost in the past two years as it recorded a positive growth during 2018. The recovery of water in areas which were previously affected by the drought has positively impacted the feed for cows and consequently the supply of milk to the industry. A similar trend is observed from other dairy beverages such as drinking yoghurt, buttermilk and maas, which also witnessed a surge in the volume in 2018.

Top end retail maintained its position as the dominant outlet for flavoured milk accounting for almost two thirds of the total volume. This channel is known for promotional activity in store and has a large customer base. The on-consumption channel showed the slowest growth and accounted for the second smallest share in volume in 2018. On-consumption has been under pressure across other beverage categories as well. This is partially driven by the depressed economy leading consumers to eat out less frequently. Exports has the smallest share in volume. Due to the lifespan of flavoured milk, it is not a common product to export to international markets.

The key metropolitan regions held the major share of the volume distributed for flavoured milk in 2018. Collectively Gauteng, KwaZulu-Natal and the Western Cape made up the majority share of the volume. The large population size and higher disposable income is believed to be the driving factors behind the large volume share. The largest growth in volume was witnessed by North West region (although off a small base), over the period under review. It is hypothesized that the volume surplus may have been attributed to the oversupply in neighbouring regions such as Gauteng.

In the medium to long term, the category is expected to continue growing in volume as players are also likely to innovate to keep consumers interested in their products.

See the report here.