Good culture: how the rise in yoghurt consumption is helping Aussie farmers

Yoghurt is one of the fastest-growing food categories in Australia, and the increased consumption is not only improving health, it's helping Aussie farmers.

Whether its health consciousness on the part of consumers, or the range of flavours and types that manufacturers are producing, the rise in popularity cannot be ignored.

A mere few years ago, the Greek yoghurt category was almost non-existent in the Australian market, but the current demand is something that is not being ignored by manufacturers.

As dairy farmers struggle to survive the milk price wars and more dairy products become private-label domain, yoghurt and in particular, Greek yoghurt, is offering Aussie dairy farmers some hope.

“Greek yoghurt uses about triple the amount of milk compared to other yoghurts and the hope and expectation is that this will change the local milk consumption drastically,” Peter Meek, Managing Director for Bead Foods, which is launching Chobani Greek yoghurt in the Australian market, told Food Magazine.

Since launching Chobani in the US five years ago, the consumption of Greek yoghurt has risen dramatically, and Meek anticipates a similar story in Australia.

“There really wasn’t a Greek yoghurt category back in 2007, there were a couple of small niche players and then Chobani came along and almost created the mainstream category,” he explained.

“It’s gone from one per cent of the total yoghurt market to about a third of the market in five years.

“In Australia the greater yoghurt segment is not tracked by retailers, but based on our estimations, we think [Greek yoghurt] is about 15 per cent of the market, and it has seen strong growth in the last few years, mostly the plain variety because people like to add it to cooking and other things.”

Back to basics

The difference is the way the yoghurt is made, which takes on an old-fashioned, traditional approach to making Greek yoghurt, which Meek believes is the main reason it has been so widely adopted in the US and will also be in Australia.

“I think firstly because almost all of it is natural and organic and properly strained. We call ours ‘Greek yoghurt,” not ‘Greek-style” because we strain our yoghurt and it takes three litres of milk to make one litre of our Greek yoghurt,” he told Food Magazine.

“The standard Greek yoghurt available in Australia is 10 per cent fat because it is just full cream milk with cream added and then it is fermented.

“But we start with lots of skim milk, we strain it and remove the fat, which makes it incredibly thick and creamy naturally because there are tons and tons of proteins in there.

“I think the health and wellness trend is growing and consumers are looking for products that are authentic.

“Our yoghurt is milk and cultures, what we don’t use is the stuff consumers are saying they don’t want: gelatines and thickeners and artificial additives.

Chobani has invested $20 million into building what Meek describes as “basically a whole new factory alongside our existing [Gippsland] one,” to make the Greek yoghurt locally.

“We’re putting in a whole processing plant to make the base yoghurt, as well as new filling lines, warehousing and storage capacity to store and ship,” he explained to Food Magazine.

“In the process, we’re also recruiting people for the development and there will be about 25 more peopled when it’s up and running, so we will have an impact on the wider community with employment too.

Milking the dairy industry

“The hope and expectation is that this will change the local milk consumption drastically.

“We currently source all Gippsland dairy from Victoria, so we’re already buying that and once we start making Chobani locally, we will obviously increase the amount we’re buying dramatically.”

“Anything that uses local milk has got to be a great thing.

“One reason we will make the milk here is that we will have access to a wonderful quality of milk.”

When Food Magazine asked Meek for his take on the supermarket price wars and its impact on the dairy industry, he was hesitant to comment.

“It’s a very complicated issue and I don’t have all the information on it,” he said.

“All I know is that for my business to be successful, I need a viable farming community behind me anything that will support that, I am definitely in favour of.”

Dairy farming second worst job in the world

This month, a US survey rated dairy farming as the second worst job you can have.

The findings of the American survey might not come as a surprise to most Australian dairy farmers, who are facing a slump in profits as the major supermarkets continue to sell milk for $1 per litre, despite a Senate Inquiry and an investigation by the Australian Competition and Consumer Commission into what the industry calls “unsustainable”prices.

Australian Dairy Association president Chris Griffin told Food Magazine earlier this year that farmers are leaving the industry in droves because they cannot manage to make a profit, or in many cases, break even.

“We know there’s been at least 30 leave the industry in Queensland alone, and the majority are sighting the uncertainty of milk prices as the reason,” he said.

Following the intense debate about the cost cutting by Coles and Woolworths and the ruling that $1 per litre was acceptable Food Magazine asked Griffin if the chances of the big two supermarkets increasing the price of milk to help with the increase in farmers’ costs would most likely be slim.

“That’s a question for Coles,” he said.

“We believe the tactic all along by Coles was just to get people through its doors, and since dairy products are in 97 per cent of consumers homes, it’s a draw card they’ve used.

“It’s always at the back end of the supermarket, so you have to walk through all the other products and displays to get to it, so it is simply a marketing ploy they’ve implemented at the expense of the dairy industry.”

When contacted by Food Magazine to find out if they would consider absorbing the cost increase, Jim Cooper from Coles said "we are not speculating about the potential impact the carbon tax will have on retail pricing."

The only profession deemed to be worse than dairy farming is being a lumberjack, according to the results collated by American HR group, CareerCast’s.

The five key categories were used to determine the best and worst jobs were physical demands, work environment, income, stress and hiring outlook.

The importance of five

With Greek yoghurt going from strength to strength, one may wonder whether there is any room left in the market for more mainstream varieties. And the answer is ‘yes there is.’

So much so, that from a big idea became an even bigger development for an entrepreneur and his yoghurt brand, which had a buyer before he even had a working factory.

David Prior has a unique take on the adage ‘make the most out of your day’.

Having started his day at five o’clock in the morning for over a decade, Prior treasures this moment each morning where he feels he can pause and create his day.

It was this philosophy that fuelled Prior to capture what he calls this ‘five:am-ness,’ and bottle it.

And so, the five:am organic yoghurt brand was born, but Prior also wanted to ensure his operation was environmentally sustainable.

At this stage of pipe dreams and grand ideas, the unimaginable happened: a major Australian supermarket decided to buy his product.

Only problem was, they wanted it by March 2011 – just eight months later – and at this stage Prior didn’t even have any equipment, let along a sustainable manufacturing operation.

“When the contract was signed to produce and distribute our yoghurt within an eight month timeframe, all we had was a 35,000 square foot site located just south of Melbourne, Victoria,” explained Prior.

“Our site had no manufacturing system in place, inadequate air flow and water supply, and none of the technology needed to produce organic yoghurt.”

Despite the short time frame, Prior did not want to sacrifice the environmentally sustainable factory he had dreamed of for his yoghurt brand.

In May 2010, five:am engaged Process Partners, a specialist dairy engineering and process improvement group, to help manage and execute the project, who conducted a detailed audit of five:am’s requirements, taking into account its need to produce more variations of the product than was initially required to meet its March 2011 distribution deadline.

From this, they developed a manufacturing strategy for the plant and evolved the strategy based on budget and business objectives.

Process Partners joined forces with Schneider Electric to provide a full suite of automation and control technology in the small timeframe.

“Nobody can believe how quickly we got it up and going,” Craig Roseman, Schneider Electric’s food and beverage specialist, told Food Magazine.

He agreed that the focus on health has opened up doors for more players in the yoghurt category, including Prior.

“I guess why there has been such an increase in the market in Australia versus the UK is that our consumption per capita is less than them so there was always scope to increase it.

“There is definitely a trend towards more wholesome foods and yoghurt is one example of that.

The milk used in five:am’s yoghurt is an important part of it’s organic processing, which Roseman said is sourced from a farm in Victoria.

“It is a certified organic farm, and it went through rigorous process to get it that certification,” he said.

Roseman told Food Magazine that while the supermarket duopoly is impacting the market, the yoghurt sector is proving to be a hopeful case.

“I guess we have, apart from the independents, a strong duopoly between Coles and Woolworths so they are always going to have pretty strong market power and I think basically having market power means they can dictate a lot about what they want.

“There is that element of end users, some are more susceptible to that [supermarket power], while some can push back a little.

“I certainly agree that it’s not conducive to a healthy local sector in the long run, it is going to put strain on the businesses that are already struggling.

“We’re not that different to ‘a dollar a litre’ farmers, a lot of our business is cut out or improved on too.

“Fortunately the yoghurt sector is one of the few dairy derivatives that is not home branded to the extent that milk and cheese.

“The profit is driven out for manufacturers when a category becomes dominated by private label, but yoghurt has somehow managed to stay strong.”

 

 

 

 

 

 

 

 

4 thoughts on “Good culture: how the rise in yoghurt consumption is helping Aussie farmers

Leave a Reply

Your email address will not be published. Required fields are marked *