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Australian Dairy Industry
The dairy industry of Australia is the third most significant rural industry at the farm gate – valued at $3.2 billion in 2006/07 – and the fifth most significant in agricultural exports – valued at $2.5 billion. Milk production slipped 5% during 2006/07, under the pressure of widespread drought, to 9.6 billion litres. Export returns followed the same example, reflecting the availability of product for sale. In the local market, supermarket sales of dairy products continued to hike in volume and value – the retail market for major dairy products totalled more than $4 billion in 2006/07 – with stable price expansion across all the major dairy categories.
Australian Cheese Market (Situation and Outlook)
The Asia-Pacific cheese market expected to witness a dramatic increase in its market value during the last decade. Being the second largest cheese market in Asia-Pacific, Australia continued accounting for a large part of this market. The Australian cheese market had enjoyed strong since 1999 but during the current years it was experiencing some tough time due to obesity concerns and changing healthy lifestyle concerns of the consumers. Despite being a mature dairy market the Australian market is unable to show dependable volume and value growth in current years.
Dairy products sale in the domestic market has increased by 7% value in the past 12 months mainly due to high price increases. Value growth varies between 4 and 14% but customers have responded in some categories by purchasing less due to increasing prices. In the category of cheese, dairy blends and yoghurts sales volume have declined in the past 12 months as customers opposed higher prices. But still growth continued in milk and butter. The average retail prices have been strong over the year and above the prevailing inflation rate across all major dairy products categories. Milk sales volume are expected to raise but current data shows that consumers are changing their purchase patterns from branded to private label such as “home brands” products to limit the outcome of price hike.
Higher Prices and Consumer Shifts
The confrontation of retailers to recognize and pass on higher prices from dairy manufacturers has increased due to this private label environment. Sales through a wide variety of foodservice outlets are growing at a much faster rate than supermarkets. These outlets offer rising opportunities for dairy, with less price sensitivity to consumers, although they are often more demanding to service.
In recent years, cheese has come under significant market pressure as a core food group from obesity concerns and fortified or functional foods that can replace dairy products like cheese. This competitive pressure has started to marginalise cheese in the minds of consumers. As a result, over the past two years, some key attitudes on dairy have declined and sales have dropped in some dairy categories, such as cheese.
Dairy Farmer’s Coon Cheese
Coon cheese is one of the famous brands in Australia. Dairy Farmers is the company that produces Coon cheese. Dairy Farmers’ Coon is a versatile natural cheddar cheese that is 100% natural and free from preservatives. Dairy Farmers offers a selection of Coon cheeses in block, shredded and sliced varieties and in many flavours. Some of the major flavours are original tasty, light and Tasty, Extra Tasty, Swiss and Colby. Coon is 100% natural, real cheese that is cut straight from the block and has been a part of Australian life since 1931.
Coon Cheese comes in a range of sizes and varieties. Coon cheese is supplied to major super stores all across Australia. Some of the major clients for branded Coon cheese are restaurants, fast food chains and hotel industry.
Coon Product Offerings
COON Tasty Coon tasty is the original, best and most loved flavour. A must for any sandwich and will melt and bubble nicely under the grill. It is available in block, natural slices, and big natural slices, shredded and shaved.
COON Light & Tasty It is a great taste of COON with 25% less fat yet 30% more calcium. Available in block, natural slices, big natural slices, shredded and shaved.
COON Extra Tasty COON Extra Tasty is natural cheddar cheese with a distinct flavour. Aged for up to 9 months to allow the cheese to mature, COON Extra Tasty is perfect for those wanting extra strong flavour. Available in block, natural slices and shredded.
COON Colby COON Colby has a milder and creamy flavour that the whole family will love. This is a great cheese for melting. This flavour is available in block and natural slices.
COON Swiss This brand of Coon cheese has a sweet, mild taste adds an extra dimension to a traditional toasty. It melts perfectly and with some smoked ham and tomato makes a gourmet treat. A mild flavour makes it prefect for families. It is available in natural slices.
Homebrand Homebrand cheese is another main competitor for Dairy Coon. Homebrand is famous for its low priced products. Exclusive to Woolworths, Homebrand was established more than 30 years ago. Today, it offers Woolworths' customers over 950 product lines. All Homebrand products are sourced either locally or internationally to ensure customers have access to the best possible choice and quality, at affordable and competitive prices. Homebrand has developed a network of Trade Partners both locally and globally who are certified under the Woolworths Quality Assurance (WQA) program. WQA certification ensures customers benefit from safe, quality products. To compete with Homebrand, Coon needs to develop and excellent supply chain and distribution facilities including international consolidation and logistics. These are some grounds on which Coon should work on to compete with other supermarket brands. Bonlac Foods Ltd Bonlac Foods Limited is one of Australia's leading dairy products manufacturers. It is a producer of cheese, butter, milk powders and speciality ingredients and also a contract packer of consumer products. The company earns approximately half of its revenues from exports. Bonlac Foods is 50% owned by Bonlac Supply Company, which has about 2,500 Supplier Shareholders in the Australian States of Victoria and Tasmania, and 50% owned by Fonterra Co-operative Group Ltd of New Zealand. The company is headquartered in Melbourne, Australia. Fonterra Cooperative Group Fonterra Co-operative Group Ltd, generally known as Fonterra, is New Zealand's leading company by turnover and is a major competitor for Dairy Farmers. A cooperative, Fonterra is owned by approximately 11,000 farmers throughout the country. It is the sixth-largest dairy company in the world, and the most significant by far when it comes to determining international dairy trade, handling over a third of all international dairy trade. Fonterra was established in October 2001 through a merger of the two largest New Zealand dairy cooperatives and the New Zealand Dairy Board. The purpose of the merger was to create a single company to manage the supply chain for a significant proportion of the New Zealand dairy industry. Fonterra Co-operative Group Limited is a multinational dairy company whose goal is simple: to lead in dairy. Fonterra is based in Melbourne; they have a dedicated global sales channel across 70 countries to fulfil the consumer demands. Their client range includes fast food chains, cafes, restaurants, bakeries and hotels.
McDonalds, Dominos, KFC, Oporto, Subway and Bakers Delight are some of the clients of Fonterra. They are provided with branded dairy products, core ingredients and many ready to use products.
Fonterra as a competitor for Coon cheese in Australia Being a big multinational in dairy business Fonterra is also a big competitor for Coon cheese. In Australia, Fonterra has revenues of $1.9 billion, processes 21 per cent of all Australian milk and employs over 2,000 people. Fonterra considers Australia to be part of its home market with legacy companies operating businesses in Australia since the 1960s. Australia is a vital part of Fonterra’s Trans-Tasman home market and through their legacy companies, Fonterra have existed in Australia for well over 50 years. Bega Cheese Bega Cheese has been made in New South Wales’ Bega Valley for well over 100 years, in fact, since 1899. Bega’s heritage is firmly entrenched in natural, nourishing cheese from the lush green pastures of the Bega Valley. The Bega brand resonates the honesty and integrity of the country with its wholesome and unpretentious characteristics. Bega is a proud Australian brand that has product offerings in natural, processed and kids’ cheese, and is one of the key players in all of these categories, particularly natural cheese. Bongrain SA Bongrain SA specializes in the production of a variety of commodity and specialty cheeses, including Brie, Camembert and goat's cheese. The company is experiencing increased due to improved sales volumes, good trends on major consumer products and maintained world prices on powders and milk fats. Bongrain is present in over 150 countries and offers several hundred different cheese brands. The company is headquartered in Viroflay, France.
Changing Trends in the Cheese Market
The growing range of specialty cheeses, locally manufactured or imported, and now broadly found in supermarkets and chain stores, is supplying Australian consumers with a much larger and more effortlessly available option. This experience has not only bringing a difference from shopping for these cheeses at specific stores to supermarkets, but through in-store advertisements and promotions which have introduced many more consumers to the flavour of speciality cheeses. This has customised their palates to a more urbanised taste than that of the local salt dominated, cheddar type cheese.
Leading Competitors in Specialized cheese
Estimated market shares of leading local manufacturers of speciality cheese (who may also sell imported cheeses), are Lactos with five per cent by value and 2.6 per cent by volume of the total cheese market. King Island Dairy with 4.5 per cent and two per cent, Manassen with three per cent and 1.2 per cent and National Foods with 11 per cent and 1.3 per cent, whilst a large number of individual cheeses are imported by sole agents, such asjarlsberg by Canterella Bros, accounting for 7.6 per cent and six per cent respectively.
Annual Report 2006-2007, retrieved from Australian Dairy Industry Official website www.dairyaustralia.com.au Australian Bureau of Statistics, National Regional Profiles, Australian Government, 2007 Australian Bureau of Statistics, SA Office Agricultural Census, 2000-2001 Value of Product Australia, Australian Government, 2001 Dairy Industry Development Board, SA Dairy Industry Strategic Plan 2010, Dairy Industry Development Board
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