Cheese markets changing, but Bega still shows good results

Posted by AFN Staff Writers on 29th February 2016

A higher proportion of Australians living in rural and regional parts of the country are more likely to purchase cheese than consumers living in the bigger Australian cities says a new report from Roy Morgan Research.


In the 12 months to September 2015, 84 per cent of those living in rural and regional Australia purchased cheese within a four-week period. Just 79 per cent of those living Brisbane, Darwin, Adelaide, Melbourne, Canberra and Sydney brought the dairy product.


Hobart and Perth grocery buyers were the two only capital cities where grocery buyers were more likely to buy cheese than their rural and regional counterparts.


Australian Food News: The report appears to reflect that cheese is less popular in areas where there is more diversity in non-Anglo ethnic population groups with diets consuming relatively less cheese than long-held Australian diets. 


Cheese-buying habits of country and capital-city grocery buyers








Source: Roy Morgan Single Source (Australia), October 2014 – September 2015 (n=8,233).


In every state, private label cheeses are the most popular purchase choice for consumers from both the city and the country. In Queensland, shoppers are more than twice as likely to choose to buy a supermarket private label cheese than are to buy the second-most popular brand, Bega.


Australian Food News: Supermarket and private label brands and Bega now occupy the space once held by Kraft Cheddar. 


Roy Morgan Research CEO Michele Levine said block, grated and sliced cheese accounted for the majority of cheese purchases in Australian supermarkets, although overall sales are declining.


As we have reported previously, cheese sales are gradually declining around Australia and across most age groups,” said Levine.


“It is therefore crucial for brands to know where their key consumers are located, and what health and dietary preferences and concerns motivate their purchasing decisions,” stated Levine.


Bega’s strength reflected by profit results


Meanwhile, in other news, Bega Cheese’s status as a producer of some of Australia’s most popular cheeses, was reflected in its profit update last week which revealed a net profit of AUD$14.8 million for the six months ended 31 December 2015. This was a 9.9 per cent increase on the previous corresponding 2014 period.


Executive Chairman at Bega Barry Irvin said the dairy company plans to continue its success by remaining to focus on branded and value added consumer goods over commodities.


“The announcement of the Bega Cheese/Blackmores partnership in infant formula and life stage nutritionals was a further important step in the branding and the value adding of our nutritionals production,” said Irvin.


“Our nutritionals platform grew its revenue by 32 per cent in the first half. The link between dairy and the health and pharmaceutical market sectors is now a major focus in our business development,” he stated.


Irvin further commented that investment in manufacturing, infrastructure, milk supply and a strong balance sheet means the business is ready to support any growth that may occur.


“Infrastructure investments in the first half have included increased capacity at the Derrimut canning facility, new natural cheese shred and slice lines at the Ridge Street facility in Bega and value added packaging capabilities for cream cheese at Tatura,” Irvin said.


“Bega Cheese’s focus on Australian and international consumer markets, strong branding and distribution alliances such as Blackmores and investment in higher value dairy nutritionals means that we are well positioned to take advantage of unfolding market opportunities,” he concluded.