Milk consumption

IBISWorld forecasts milk consumption to fall by 1.0% in 2025, to reach 89.2 litres per capita. Milk consumption is influenced by a range of factors. These include changes in domestic milk prices, population demographics and consumer preferences. Declining milk production over the past three years has placed upward pressure on milk prices throughout the year, discouraging consumer demand. Furthermore, increasing demand for plant-based alternatives, like oat milk and soy milk is also expected to contribute to falling per capita milk consumption.

Changes in domestic milk prices can have a significant impact on milk consumption. As milk prices rise, consumers may reduce consumption, while a decline in domestic milk prices may lead to increased consumption. Domestic milk prices are heavily influenced by global market conditions, with New Zealand exporting approximately 95% of milk produced in the country, according to the Dairy Companies Association of New Zealand. Expanding disposable incomes supported growing consumption in 2021, despite robust growth in milk prices. However, per capita consumption has dropped in subsequent years, with falling milk production weighing heavily on prices.

Consumer attitudes towards dairy products, which are partly driven by health consciousness and public concern over environmental issues, have weighed on milk consumption over the past five years. The resultant growing popularity of vegan and vegetarian diets has seen an increase in consumption of non-dairy milk alternatives, such as soy milk, almond milk, oat milk and coconut milk. The launch of world-leading oat milk brand, Oatly, and re-opening of local brand Otis' New Zealand manufacturing plant in 2024 highlights the strength of growing demand of plant-based milk.

Demographic changes can also influence milk consumption. An increase in the proportion of the population aged under 15 or over 70 can boost per capita milk consumption, as these age groups often consume milk due to the perceived health benefits. Growth in the population aged 70 and above is far outpacing that of the total population. However, rising health consciousness has also weighed on milk consumption in other population segments over the past five years. Overall, IBISWorld expects per capita milk consumption to fall at a compound annual 0.6% over the five years through 2025.