Cheese, butter and yoghurt consumption

IBISWorld forecasts cheese, butter and yoghurt consumption to decline by 1.7% in 2023-24, to 28.3 kilograms per capita. Consumer spending power has weakened in the face of decades high inflation and rising interest rates over the past two years. Dairy products in particular have not been immune to price rises, with the farmgate milk price forecast to rise 26.5% over the two years through 2023-24.

Cheese remains the most consumed dairy product, accounting for around half of the volume of non-milk dairy products consumed annually. Cheese consumption reached a record 15.0 kilograms per capita in 2022-23 (latest data available). Consumption rose sharply in 2021-22 as increasing disposable incomes encouraged consumers to increase consumption. This was boosted by the easing of pandemic restrictions which supported increased demand from food service channels. However, consumer demand has increasingly switched away from traditional lower cost varieties such as cheddar to premium varieties, such as fetta and camembert. This follows the overarching consumer trend in the food and beverage sector favouring quality over quantity. This has constrained per capita cheese consumption over much of the period.

Per capita butter consumption has fluctuated over the past five years, but has remained relatively stable overall. Falling dairy cattle numbers amid poor weather conditions have constrained milk supply. Butter production has particularly suffered, as it is the lowest priority dairy product behind cream, cheese and yoghurt. However, this fall in the domestic butter supply has been offset by rising import volumes, with butter imports rising over 50.0% in 2022-23. These have largely come from New Zealand, where prices are currently cheaper than Australia, encouraging consumption. Demand has also been gradually switching back to margarine and other plant-based alternatives as the vegan diet becomes more popular.

Yoghurt consumption has increased slightly over the past five years. The Australian public has become increasingly health conscious over the past five years, with a growing share of consumers seeking foods that are considered natural and unprocessed. Consequently, probiotic and natural style yoghurts have become more popular with consumers over the period, outpacing growth in demand for flavoured yoghurt. Overall, IBISWorld forecasts cheese, butter and yoghurt consumption to rise at a compound annual rate of 0.9% over the five years through 2023-24.