SA YOGHURT INDUSTRY

LANDSCAPE REPORT

COMPILED: OCTOBER 2016

REPORT OVERVIEW

For the Global Yoghurt Industry Section:

What are the current market dynamics of the global Yoghurt industry?

What are the global Yoghurt industry trends, drivers, and restraints?

For the South African Yoghurt Industry Section:

What are the current market dynamics of the SA Yoghurt industry?

Who are the key manufacturing players in the SA Yoghurt industry?

For the South African Retail and Pricing Analysis Section:

Who are the key retail players in the SA Yoghurt industry?

What are the prices of popular Yoghurt brands across South African retail outlets?

In terms of South African Consumer Insights and Trends:

What are the volumes for Yoghurt consumption (2011-2015) and forecasts (2016-2019)?

What are the statistics regarding the most popular purchased Yoghurt brands in 2015?

SOME KEY QUESTIONS THE REPORT WILL HELP YOU TO ANSWER:

The South African Yoghurt Industry Landscape Report (86 pages) provides a dynamic synthesis of

industry research, examining the local and global Yoghurt industry from a uniquely holistic perspective, with

detailed insights into the entire value chain – from manufacturing to retail pricing and consumption.

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SCREENSHOT FROM REPORT

86 page report filled with detailed charts, graphs, tables and insights

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21.3

13.2 12.410.2 9.9

7 6.74.4 3.4

0.4 0.30.

5.

10.

15.

20.

25.

Kilo

gra

ms

GLOBAL YOGHURT CONSUMPTION PER CAPITA BY COUNTRY: 2012

Source: Statista; Futuremarketinsight ; Dairyreported ; Report linker Image Source: Pixabay; Freepik

The countries with the highest per capita

consumption rates for yoghurt is France with 21.3kg,

Ireland with 13.2kg and Canada with 12.4kg.

The United States has a per capita consumption rate

of 6.7kg, though they do have the highest production

rate.

In 2014, the global probiotic yoghurt

market was valued at US$30 billion and

is expected to continue growing up to

2018 to reach US$45 billion.

The global market is predicted to continue

growth at an annual compound growth rate

(CAGR) of 6.7% up to 2018.

Yoghurt is a product produced from putting

dairy through a bacterial fermentation

process which adds bacteria considered

beneficial to your body.

The yoghurt market is divided up into regular

yoghurt, fat free, frozen and drinking yoghurt.

30

45

0

10

20

30

40

50

2014 2018*

In b

illio

n U

S $

GLOBAL SALES OF PROBIOTIC YOGHURTS: 2014-2018

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SAMPLE FROM REPORT:GLOBAL INDUSTRY OVERVIEW: YOGHURT

The year 2016 is a critical period for the

South African dairy industry, as the

sector’s two biggest players- Clover

and Danone and former partners go

head-to-head in a battle for market

share.

The South African yoghurt and sour milk

drinks market felt the impact of reduced

consumer spend within this ‘luxury’ segment.

Despite having increased disposable income

compared with the previous year, consumers

remain watchful in their spending habits, and

sales of yoghurt remain fairly low.

Mothers may choose to purchase flavoured

“spoon-able” yoghurt due to its perceived

health benefits for their children, but are less

likely to purchase yoghurt for their own

consumption.

The monthly purchases of raw milk for

January to September 2015 amounted to

2284 000 tons.

Source: Supermarket & Retailer; Milk SA; Milksa Image Source: Pixabay

In 2015, South Africa exported 16 098 tons

of buttermilk and yoghurt compared to 22

774 tons in 2014.

2843 2906 2983

273 237 252 232 246 235 243 273 293

0

500

1000

1500

2000

2500

3000

3500

Pu

rch

ases '000 T

on

s

ANNUAL AND MONTHLY RAW MILK PURCHASES IN SA: 2012- SEP 2015

5

5709 4527

9215

12914

19518

22774

16098

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014 2015

Tonnes

ANNUAL BUTTERMILK & YOGHURT EXPORTS: 2009-2015

SAMPLE FROM REPORTSA YOGHURT INDUSTRY OVERVIEW

Founded in 1898, Clover started making

yoghurt in 2015.

Clover lost an 18 years distribution agreement

with Danone which is now moving their own

products. Clover decided to acquire DairyBelle

and the UHT manufacturing, marketing and

distribution facility for R125 million and R30

million, respectively.

This acquisition gave Clover the opportunity to

lower costs in South Africa’s Western Cape

province as the company previously didn't

have manufacturing facilities.

In 2015, Clover had to invest R65 million in a

new yoghurt production line as the one bought

from DairyBelle had run out of capacity 2

years earlier than expected. At the time

Clover was undersupplying the market by

about 60-70%, according to Clover CEO

Johann Vorster.

CLOVER BRANDS:

• Clover Classic yoghurt

• Bliss full Cream yoghurt

• InShape yoghurt

• Rainbow yoghurt

• Sip up Drinking yoghurt

The start of producing milk is part of Clover’s effort

to move into higher-margin, value-added foods and

reduce its exposure to commodity type products.

Clover uses about 25%-30% of South Africa’s raw

milk and after launching its own first range of

products under “Clover Classic” together with

DairyBelle’s brands expected to reach 20% share

of the yoghurt market in South Africa.

“Value-added products including yoghurts,

custards and desserts could make up about 20% of

Clover industries’ business within a few years.”

- Johann Vorster CEO (2014)

Source: Clover, bdlive Image Source: Clover

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SAMPLE FROM REPORTSA YOGHURT MANUFACTURERS: CLOVER

South Africa’s biggest food retail chains

have experienced growth in sales, despite

economic hardships and the devastating

drought.

Woolworths Food including concessions have

increased by 11.9% up to 26 June 2016 with a

price movement of 6.7%. The total revenue was

R58,1 billion.

For the 26 weeks up to 26 June 2016, total

sales at Massmart increased to R42.3 billion –

an 8.7% growth over the prior 26 week period. ,

Annual product inflation was estimated at 5.8%,

comparable store sales increased by 6.4%.

Shoprite Holdings managed to boost sales by

14.4% from R130.03 billion for the 12 months to

June 2016 compared to 11.2% in June 2015.

Spar revenue grew by 16.8% for the interim

period (up to 31 March 2016) to R42.484 billion

Spar from R36.383 billion in 2015.

Pick n Pay experienced growth in sales, with a

growing retail turnover of 8.2% to R72.4 billion

for the 2016 financial year.

Source: Woolworths Holdings; Shoprite Holdings; Spar; Moneyweb Image Source: BusinessTech

The infographic below shows that the average

basket of goods from Woolworths is 15% higher

than from Checkers.

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SAMPLE FROM REPORT: SA RETAIL OVERVIEW

24% 27% 26% 28% 28%

43% 44% 43% 45% 43%

33% 29% 32% 28% 29%

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015

HOW MANY TIMES HAVE YOU PERSONALLY EATEN YOGHURT (INCLUDING DRINKING YOGHURT) DURING THE PAST 7 DAYS?

1 Serving 2-3 Servings 4+ Servings

Year 1 Serving 2-3 Servings 4+ Servings Total

2011 4,465,000 7,907,000 6,200,000 18,571,000

2012 5,038,000 8,066,000 5,356,000 18,461,000

2013 4,934,000 8,175,000 6,052,000 19,161,000

2014 4,959,000 7,942,000 4,911,000 17,812,000

2015 5,304,000 8,123,000 5,436,000 18,862,000

Between 2011 and 2015, the volume trends among consumers who had personally eaten yoghurt has decreased from 33%

purchasing 4+ servings in the past 7 days in 2011 to 29% in 2015.

In 2015, 28% (5.3 million) of yoghurt consumers had personally eaten 1 serving in the past 7 days, 43% (8.1 million) bought

2-3 servings and 29% (5.4 million) had purchased 4 or more servings.

8Source: AMPS Main Branded 2011AB-2015AB (Adult population 16+ years)

Sample Size: 34 038 (2011); 34 067 (2012); 36 449 (2013); 36 932 (2014); 37 452 (2015)

Based on weighted numbers

SAMPLE FROM REPORTYOGHURT VOLUME TRENDS (PAST 7 DAYS)

TABLE OF CONTENTS

1. Executive Summary (4 pages):

1.1 Global Industry Snapshot 2016

1.2 South African Industry Snapshot 2016

1.3 Industry Drivers and Restraints

1.4 Dashboard: South African Yoghurt

2. Global Yoghurt Industry (8 pages):

2.1 Global Yoghurt Industry Overview: GLOBAL SALES OF PROBIOTIC YOGHURTS: 2014-2018; GLOBAL YOGHURT CONSUMPTION PER CAPITA BY COUNTRY

(2012); FREQUENCY OF YOGHURT DRINKS USAGE IN THE UNITED KINGDOM (UK) 2015 (Graphs)

2.2 Key Global Yoghurt Markets: YOGHURT AND FERMENTED MILK PRODUCTION VOLUME IN FRANCE (2008-2014); YOGHURT SALES IN THE UNITED STATES

FROM 2011-2015; REVENUE OF CHINA MENGNIU DAIRY 2015, BY PRODUCT (Graphs)

2.3 Global Yoghurt Industry Trends

2.4 Global Yoghurt Industry Drivers

2.5 Global Yoghurt Industry Challenges

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TABLE OF CONTENTS

3. South African Yoghurt Industry (31 pages):

3.1 South African Yoghurt Industry Overview (13 pages)

3.1.1 South African Yoghurt Industry Overview: ANNUAL AND MONTHLY RAW MILK PURCHASES IN SA (2012-SEP 2015); ANNUAL BUTTERMILK & YOGHURT

EXPORTS (2009-2014); YOGHURT IMPORT AND EXPORT PRICES (2012-2014) (Graphs)

3.1.2 South African Yoghurt Industry Consumption: YOGHURT AND SOUR MILK CONSUMPTION PER CAPITA (Table)

3.1.3 South African Yoghurt Industry Distribution: YOGHURT DISTRIBUTION (2012); DISTRIBUTION BY PROVINCE (2012); DRINKING YOGHURT DISTRIBUTION

(2015); DISTRIBUTION BY PROVINCE (2015) (Graphs)

3.1.4 South African Yoghurt Market Structure and Dynamics: SOUTH AFRICAN MILK PRODUCTS MARKET SHARE (2015) (Graphs)

3.1.5 South African Yoghurt Key Industry Trends

3.1.6 South African Yoghurt Key Industry Drivers

3.1.7 South African Yoghurt Key Industry Challenges

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TABLE OF CONTENTS

3.2 South African Yoghurt Manufacturing Overview (11 pages)

3.2.1 SA Yoghurt Manufacturers: Clover

3.2.2 SA Yoghurt Manufacturers: DairyBelle & Clover

3.2.3 SA Yoghurt Manufacturers: Danone

3.2.4 SA Yoghurt Manufacturers: Darling Roomery

3.2.5 SA Yoghurt Manufacturers: Dewfresh

3.2.6 SA Yoghurt Manufacturers: Fair Cape Dairies

3.2.7 SA Yoghurt Manufacturers: Fairview

3.2.8 SA Yoghurt Manufacturers: Gero

3.2.9 SA Yoghurt Manufacturers: Lancewood

3.2.10 SA Yoghurt Manufacturers: Parmalat

3.2.11 SA Yoghurt Manufacturers: Wynn-With

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TABLE OF CONTENTS

3.3 South African Frozen Yoghurt Competitor Analysis (7 pages)

3.3.1 SA Frozen Yoghurt Competitor: AngelBerry

3.3.2 SA Frozen Yoghurt Competitor: Bella & Boo

3.3.3 SA Frozen Yoghurt Competitor: Filo

3.3.4 SA Frozen Yoghurt Competitor: Marcel’s

3.3.5 SA Frozen Yoghurt Competitor: Myog Frozen Yoghurt

3.3.6 SA Frozen Yoghurt Competitor: Smooch

3.3.7 SA Frozen Yoghurt Competitor: Wakaberrry

4. South African Yoghurt Industry Retail Analysis (17 pages):

4.1 SA Retail Overview (12 pages)

4.1.1 SA Retail Overview

4.1.2 SA Retail: Checkers

4.1.3 SA Retail: Pick ‘n Pay: PICK N PAY TURNOVER (RM) (2010-2016) (Graph)

4.1.4 SA Retail: Shoprite: SALES GROWTH PERCENTAGE FOR YEAR (2016) (Graph)

4.1.5 SA Retail: Spar: TOTAL COMPREHENSIVE INCOME (RM) (2014 & 2015) (Graph)

4.1.6 SA Retail: Woolworths: OPERATING PROFIT BY SEGMENT (RM) (2014-2016), WOOLWORTHS VS MARKET GROWTH (3MMA) (Graphs)

4.1.7 SA Retail: Engen Quick Shop, Shell Select

4.1.8 SA Retail: BP Wild Bean Café, Caltex FreshStop12

TABLE OF CONTENTS

5. South African Consumer Trends (7 pages):

5.1 AMPS Survey Methodology & Sample Design

5.2 AMPS Survey Questions Asked

5.3 Yoghurt (incl. Drinking Yoghurt) Consumption Trends (Past 7 Days): 2011-2015 (Graph)

5.4 Yoghurt (incl. Drinking Yoghurt) Consumption Trends (Past 7 Days): 2011-2015 (Table)

5.5 Yoghurt Volume Trends (Past 7 Days): 2011-2015 (Graph & Table)

5.6 Most Popular Yoghurt Brands: 2015 (Graph & Table)

5.7 Consumer Actual (2011-2015) and Forecast (2016-2019): Yoghurt (Graph)

4.2. South African Pricing Analysis (5 pages) (conducted w/c 5 October 2016)

4.2.1 Yoghurt: Clover, Dairybelle, Crystal Valley, Danone, Darling, Fair Cape, Fairview, Gero, Lancewood, Parmalat, Vitabelle.

4.2.2 Drinking Yoghurt: Bonnita, Clover, Danone: Mayo, Darling, Parmalat, Yogi Sip.

4.2.3 Frozen Yoghurt: Marcel’s, Myog, Smooch, Wakaberry.

Comparative Pricing at Retail Outlets: Checkers, Pick ‘n Pay, Shoprite, Spar, Woolworths Food, Shell Select, Engen

Quickshop, Makro, Marcel’s, Myog, Smooch, Wakaberry.

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