IN THE FOOD WARS? Melissa Cameron | Manager Human Health and - PowerPoint PPT Presentation

IS TRUTH THE FIRST CASUALTY IN THE FOOD WARS? Melissa Cameron | Manager Human Health and Nutrition Policy | Dairy Australia 1

IS TRUTH THE FIRST CASUALTY IN THE FOOD WARS? 2

PERCEPTIONS AND SO WHAT… Consumers are ditching dairy for non-dairy alternatives Non-dairy alternatives have The power of a outstripped the cohesive plan growth of dairy milk

AUSTRALIAN SUPERMARKETS TOTAL WHITE MILK (FRESH AND UHT) SALES, 100 110 120 130 140 60 70 80 90 March 2007 June 2007 September 2007 December 2007 March 2008 June 2008 September 2008 December 2008 March 2009 June 2009 September 2009 December 2009 26 th January 2011 March 2010 June 2010 September 2010 $1 milk Litres (Million) December 2010 March 2011 June 2011 September 2011 December 2011 March 2012 June 2012 September 2012 December 2012 March 2013 June 2013 Dollars (Million) September 2013 December 2013 March 2014 June 2014 September 2014 Branded milk campaign December 2014 2016 Milk step down March 2015 June 2015 September 2015 December 2015 March 2016 June 2016 September 2016 December 2016 March 2017 June 2017 September 2017 December 2017 March 2018 June 2018 September 2018 December 2018 Litres Dollars 4

Non-dairy alternatives include: soy, almond, coconut, rice, oat SALES, AUSTRALIAN SUPERMARKETS TOTAL NON-DAIRY ALTERNATIVE ( FRESH AND UHT) 10 15 20 0 5 March 2007 June 2007 September 2007 December 2007 March 2008 June 2008 September 2008 December 2008 March 2009 June 2009 September 2009 December 2009 26 th January 2011 March 2010 June 2010 September 2010 $1 milk Litres (Million) December 2010 March 2011 June 2011 September 2011 December 2011 March 2012 June 2012 September 2012 December 2012 March 2013 June 2013 Dollars (Million) September 2013 December 2013 March 2014 June 2014 September 2014 December 2014 Branded milk campaign 2016 Milk step down March 2015 June 2015 September 2015 December 2015 March 2016 June 2016 September 2016 December 2016 March 2017 June 2017 September 2017 December 2017 March 2018 June 2018 September 2018 December 2018 Dollars Litres 5

WHAT SHARE OF THE TOTAL MILK MARKET IS THE NON-DAIRY ALTERNATIVES (IN SUPERMARKETS)? 5% 9% 16% 7%

100.00 50.00 60.00 70.00 80.00 90.00 PERCENTAGE VOLUME SUPERMARKET SALES March 2007 5% 93.5% June 2007 September 2007 December 2007 March 2008 June 2008 September 2008 December 2008 March 2009 June 2009 September 2009 December 2009 March 2010 June 2010 September 2010 December 2010 March 2011 Milk June 2011 September 2011 December 2011 Alternatives March 2012 June 2012 September 2012 December 2012 March 2013 June 2013 Flavoured Milk September 2013 December 2013 March 2014 June 2014 September 2014 December 2014 March 2015 June 2015 September 2015 December 2015 March 2016 June 2016 September 2016 December 2016 March 2017 June 2017 September 2017 December 2017 March 2018 91% June 2018 7% September 2018 December 2018 7

AUSTRALIAN TOTAL MILK AND NON-DAIRY SALES 2018 • 63% of total milk and non-dairy alternatives is sold through supermarkets • 37% sold through other outlets (food service, institutions, hospitals and petrol stations) Growth in litres (millions) 20.0 2% Busted: 15.0 Growth of fresh white 2% milk and non-dairy 1% 10.0 alternatives is on a par! 5.0 -4% - Total white Total fresh Total UHT Total non milk milk dairy -5.0 -10.0 8

PERCEPTION Consumers are Animal welfare and ditching dairy for sustainability are the non-dairy drivers for switching alternatives from dairy

CROSS PURCHASE: DAIRY VS NON-DAIRY ALTERNATIVE 35% Dairy milk Alternative buy 93% alternative buy dairy only milk only BOTH milks in any milk in any 31% 62% 5% given week given week 2% buy neither Dairy Trust Tracker 2018 Total n=1,254; Buy alternative milk n=367; Buy dairy milk n=1,174

Average purchase: 4.1 litres of dairy milks per week Average purchase: 2.3 litres of alternative milks per week 11

WHO’S BUYING ALTERNATIVES? Metro vs Regional Household structure 72% 28% PURCHASE ALTERNATIVE MILK 17% 26% 34% PURCHASE ALTERNATIVE MILK 10% 10% 64% 36% PURCHASE DAIRY MILK 19% 33% 29% PURCHASE DAIRY MILK 10% 10% METRO RURAL/ REGIONAL Single person household Age and gender Two person / couple household with no children living at home Family with at least 1 child 18 and under living at home 23% 16% 12% 7% 10% 5% 6% PURCHASE ALTERNATIVE MILK Family with only children over 18 living at home Adult household, sharing 13% 11% 14% 13% 14% 12% 9% PURCHASE DAIRY MILK Female 18-34 Male 35-49 Female 35-49 Male 50-65 Female 50-65 Male 65+ Female 65+ Dairy Trust Tracker 2018 Total n=1,254; Buy alternative milk n=367; Buy dairy milk n=1,174

WHY DO PEOPLE BUY ALTERNATIVES? 54% It’s a 32% healthier 17% I prefer the I have a dairy option taste 13% intolerance or Another reason allergy Dairy Monitor 2017: Buy alternatives n= 555

(Regular fat) PEA COW’S MILK SOY OAT RICE ALMOND INGREDIENTS LIST Milk Filtered water, Filtered water, Filtered water, Filtered water, Filtered water, Pea organic whole soy whole brown rice whole oats (min whole almonds Protein Isolate beans (min 17%), (min 13%), 15%), oat flour, (min. 3.8%), (4%), Sugar, pearl barley, sunflower oil, sunflower oil, raw sugar, Minerals and barley malt, raw calcium gum arabic, minerals Vitamins (Calcium sugar, sunflower phosphate, sea mineral (calcium (calcium Phosphate, Vitamin oil, minerals salt phosphate) , sea phosphate), B2, Vitamin D, (calcium salt emulsifier Vitamin B12), phosphate), (sunflower Natural Flavours, natural flavouring, lecithin), sea Stabilisers (418, sea salt, kombu salt, vegetable 415), Salt. (kelp), vitamins gum (gellan), (vitamin B2, natural flavour vitamin A, vitamin B12) 14

NATURAL NUTRITION – DAIRY VS. NON-DAIRY ALTERNATIVES (Regular fat) PEA OAT RICE ALMOND COW’S MILK SOY VITAMINS & MINERALS (% RDI ) Calcium 34% 37% 23% 37% 37% 38% Phosphorous 23% 18% 5% 0% 3% 25% Riboflavin 32% 5% 0% 0% 7% 31% Vitamin A 18% 2% 0% 0% 14% 0% Zinc 7% 3% 2% 0% 2% 0% Magnesium 8% 17% 8% 0% 6% 0% PROTEIN Per serve (g) 7.8g 7g 1g 4g 1g 8.8g PRICE Per Litre $1.58 $2.42 $2.50 $2.95 $3.39 $4.00 Added during manufacturing 15

FAD DIETS AND FOOD PHILOSOPHIES Keto 16

A BIG FOCUS ON PLANT-BASED DIETS 17

BUSTED… Consumers are Health and taste are cross purchasing driving the increase dairy and non- purchasing of non- dairy alternatives dairy alternatives 18

SO WHAT SHOULD THE INDUSTRY DO… The power of a cohesive plan

101 YEARS OF BUTTER AND MARGARINE 20

REPOSITIONING DAIRY FAT Dr Prof Gary Christopher Bruce Taubes Ramsden Griffin Nov 2010 Dec 2011 Mar 2012 Sep 2012 Feb 2013 Oct 2013 Nov 2013 Dec 2014 May 2015

TOTAL AUSTRALIAN BUTTER SALES 25000.0 300000.0 250000.0 20000.0 Dollars (‘000s) 200000.0 Kilos (‘000s) 15000.0 150000.0 10000.0 100000.0 5000.0 50000.0 0.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Volume (Kilos) Value ($)

INNOVATIVE PRODUCTS AND MARKETING Brand owners are finding innovative ways to lock in on consumer trends and communicate their values to customers. • Natural • Provenance • Less/no sugar

DEVELOP PLAN AND WHERE ARE WE AT… 24

THE FACTS Consumers are cross-purchasing milk and non-dairy alternatives and Together the dairy they believe Dairy has 93% of alternatives are industry needs a liquid milk healthier united position market, but don’t and cohesive plan underestimate the alternatives to communicate the value of dairy

QUESTIONS “We live in the experience economy and increasingly value intangibles like identity, uniqueness and memorability. Contemporary values are likened to the ‘warm glow’ of giving to a charity or the pride that comes from communicating your beliefs. Society wants something to believe in and with their heightened scrutiny of animal agriculture we have a role to outline a Melissa Cameron way forward and deliver an industry that not only meets these expectations but far exceeds!” mcameron@dairyaustralia.com.au Manager Human Health and Nutrition Policy | Dairy Australia Daniel Eb, The Vegans are coming, so Kiwi farmers need to give us something to believe in. The Spin Off, 2019 26