South African Milk Processors Organisation
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1 South African Milk Processors Organisation The voluntary organisation of milk processors for promotion of development of secondary dairy industry to benefit of dairy industry, consumer and South African society. Trends of retail sales of dairy products based on information up to December 2012 PUBLISHED BY THE NIELSEN COMPANY (A report to Industry Information Advisory Committee of Milk SA) This report was compiled by Office of SAMPRO and forms part of industry information project of SAMPRO. The purpose of project is to make market signals available to members and or interested parties, which is a prerequisite for effective competition, as envisaged by Competition Act. All activities of industry information project of SAMPRO are designed and implemented in accordance with Competition Act and independently from commercial interest of any and all members of SAMPRO. Introduction 1. Information regarding trends in dairy retail markets in recent past is extremely important to stimulate timeous adjustment to changes in needs of different markets. Such adjustment is in interests of consumer, dairy industry, appropriate use of national resources and effective competition in markets concerned. 2. The conditions in South African consumer market are very important market signals for dairy industry, as bulk of production is sold to retailers ( rest is sold to industries that use dairy products such as milk powder, butter and whey powder, as inputs for manufacture of or food products). 3. This report covers retail sales of 9 different dairy products and it is based on information obtained from The Nielsen Company. 4. The trends in respect of retail prices and retail demand (quantity) are good indicators of consumer demand. The research results of Nielsen Company are valuable to judge performance of dairy products in retail market and following should be taken into consideration: The surveys do not cover all retail outlets in South Africa; The research results show performance of retail outlets covered by surveys and cannot in an unqualified way be described as performance of total South African consumer market;
2 In respect of UHT milk, flavoured milk, yoghurt, maas and pre-packed cheese, surveys cover a significantly higher number of different types of retail shops than is case in respect of fresh milk, cream, butter, cottage cheese and cream cheese; The surveys include retail outlets which can be regarded as modern and which increase ir market share. This increased in market share can also be at expense of market shares of outlets outside surveys. This means that growth rate of sales recorded by surveys will typically be higher than growth rates of total market for each of products concerned; The surveys do not cover non-retail sales of dairy products and non-retail sales represents a meaningful part of total sales of dairy products; The surveys cover sales in defined retail markets of South African and imported dairy products; As market signals, it is important not to report on only change in quantity (mass or volume) of sales but also on average price due to very obvious fact that re is significant interaction between price and mass of sales. 5. In Table 1 Nielsen sample is expressed as a percentage of total demand 1) consumption as determine by BMI for period January to December TABLE 1 NIELSEN SAMPLE AS PERCENTAGE OF THE TOTAL DEMAND A B A PRODUCT NIELSEN SAMPLE BMI TOTAL DEMAND AS PERCENTAGE OF B KG % Pasteurised milk UHT Milk Flavoured milk Yoghurt Pre Packaged cheese ) 10.2 Cream cheese Butter Cream ) Retail sales plus sales of dairy products for use for manufacture of or dairy products. Total demand us based on information obtained from BMI and Industry sources. 2) Include all cheeses of tariff heading 04.06
3 In general situation can be summarised as follows: This report covers retail sales of 9 different dairy products and it is based on information obtained from The Nielsen Company ; The performance (quantity of sales and retail price) of different dairy products, differ meaningfully; The performance of any particular dairy product can change meaningfully during a period of even as short as a few months; Changes in retail price impact on sales quantities; The average retail prices of all 9 dairy products in December 2012 were higher than a year ago, but from September to December 2012 The prices of 5 of 9 products decreased; and The rates of increase of prices of all or 4 products are significantly lower than rates of increase in last year; The retail sales quantity in last year of 1 of 9 products, namely fresh milk, was lower than in previous year; The retail sales quantities of 8 of 9 products were higher than previous year but, in case of 4 of products, it was at expense of price (price increases less than inflation rate); Notwithstanding lower retail demand for fresh milk demand for drinking milk (fresh and long-life milk) in last year is estimated to be 1.7 percent higher than in previous year due to increase in retail demand for UHT milk. Drinking milk utilizes approximately 48 percent of total raw milk production in South Africa. 7. The changes in retail sales quantities and average retail prices of different dairy products are summarised in Table 2 to Table 4.
4 TABLE 2 CHANGES IN THE RETAIL DEMAND FROM THE YEAR JANUARY TO DECEMBER 2011 TO THE YEAR JANUARY TO DECEMBER 2012 PERIOD AND CHANGES IN THE RETAIL PRICES FROM DECEMBER 2011 TO DECEMBER 2012 product change in demand (quantity) Percent change in retail prices percent Fresh Milk Long Life Milk (UHT Milk) Flavoured Milk Yoghurt Maas Pre-packaged Cheese Cream Cheese Butter Cream
5 TABLE 3 CHANGES IN THE QUANTITIES OF RETAIL SALES OF CERTAIN DAIRY PRODUCTS product sales in sales in sales in sales in sales in month 2 months 3 months 6 months 12 months of from from from June from December November October 2012 January to 2012 versus to to December to December December 2012 December sales versus 2012 versus in versus versus sales in sales in month sales in sales in 6 months 12 months of 2 months 3 months from June from December from from 2011 to January 2011 November October December 2011 to 2011 to 2011 to 2011 December December December percent percent percent percent percent Fresh Milk UHT milk flavoured milk yoghurt maas pre-packaged cheese cream cheese butter cream
6 TABLE 4 THE AVERAGE RETAIL PRICES OF CERTAIN DAIRY PRODUCTS IN DECEMBER 2012 COMPARED TO THE AVERAGE RETAIL PRICES OF THE PRODUCTS CONCERNED IN CERTAIN PREVIOUS MONTHS OF 2012 AND product December 2012 versus November 2012 (1 month ago) December 2012 versus September 2012 (3 months ago) December 2012 versus June 2012 (6 months ago) December 2012 versus December 2011 (12 months ago) percent percent percent Percent Fresh Milk UHT milk flavoured milk yoghurt maas pre-packaged cheese cream cheese butter cream Marietjie Le Roux De Wet Jonker Alwyn P Kraamwinkel 25 April 2013 Old Farm Office Park, Phone +27 (12) Old Farm Road, Fax +27 (86) Faerie Glen, Pretoria marietjie@sampro.za PO Box 1853 Website Silverton, 0127
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