Plant-Based Dairy in New Zealand

Euromonitor International
September 2022
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LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2022 DEVELOPMENTS ............................................................................................................... 1
Conscious consumerism drives growth for plant-based dairy ................................................... 1
From café origins, oat milk establishes itself on supermarket shelves ...................................... 1
Plant-based milk factory proposed for Invercargill .................................................................... 1
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
Local production expected to support strong growth of oat milk ............................................... 2
Cost-of-living pressures offer opportunities for plant-based dairy ............................................. 2
Innovation expected to drive growth for other plant-based milk ................................................ 2
CATEGORY DATA ....................................................................................................................... 2
Table 1 Sales of Plant-Based Dairy by Category: Volume 2017-2022 ...................... 2
Table 2 Sales of Plant-Based Dairy by Category: Value 2017-2022 ......................... 3
Table 3 Sales of Plant-Based Dairy by Category: % Volume Growth 2017-
2022 ............................................................................................................. 3
Table 4 Sales of Plant-Based Dairy by Category: % Value Growth 2017-2022 ........ 3
Table 5 Sales of Other Plant-Based Milk by Type: % Value 2019-2022 ................... 4
Table 6 NBO Company Shares of Plant-Based Dairy: % Value 2018-2022 .............. 4
Table 7 LBN Brand Shares of Plant-Based Dairy: % Value 2019-2022 .................... 4
Table 8 Distribution of Plant-Based Dairy by Format: % Value 2017-2022 ............... 5
Table 9 Forecast Sales of Plant-Based Dairy by Category: Volume 2022-2027 ....... 6
Table 10 Forecast Sales of Plant-Based Dairy by Category: Value 2022-2027 .......... 6
Table 11 Forecast Sales of Plant-Based Dairy by Category: % Volume Growth
2022-2027 .................................................................................................... 6
Table 12 Forecast Sales of Plant-Based Dairy by Category: % Value Growth
2022-2027 .................................................................................................... 6

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PLANT-BASED DAIRY IN NEW

ZEALAND
KEY DATA FINDINGS
▪ Retail value sales grow by 18% in current terms in 2022 to NZD115 million
▪ Plant-based cheese is the best performing category in 2022, with retail value sales rising by
99% in current terms to NZD0.2 million
▪ The Sanitarium Health Food Co is the leading player in 2022, with a retail value share of 34%
▪ Retail sales are set to grow at a current value CAGR of 15% (2022 constant value CAGR of
12%) over the forecast period to NZD227 million

2022 DEVELOPMENTS

Conscious consumerism drives growth for plant-based dairy

New Zealand is a major dairy producing nation, with a strong reputation internationally for the
quality of the dairy products its produces, as well as being one of the lower carbon-emitting dairy
producing nations. Nevertheless, global warming and reducing the carbon footprint are growing
in importance to New Zealanders and the government, with Prime Minister Jacinda Ardern
declaring that addressing climate change will be her “nuclear-free moment”, underlining the
importance of addressing climate change. As such, the dairy industry in New Zealand often
finds itself the target of regulations and legislation aimed at curtailing New Zealand’s
greenhouse gas emissions, and the more negative perception that has built up over the past five
years means that the dairy industry is increasingly seeing consumers look to plant-based dairy
products as a way of reducing their carbon footprint.

From café origins, oat milk establishes itself on supermarket shelves

Oat milk is experiencing a huge increase in popularity in New Zealand, and this plant-based
milk has gone from being a niche option to an everyday favourite. From humble origins in niche
and artisanal cafés across the country, growing demand has seen distribution rise through
supermarkets, as consumers have embraced the work from home trend and have shifted their
coffee consumption from on-trade to at home. Growing demand has also led to growth in the
number of brands stocked by supermarkets, with niche local brands such as Otis and Boring
Oat Milk experiencing rapid growth in sales due to increased distribution, driving strong growth
in the share of “others” within other plant-based milk.

Plant-based milk factory proposed for Invercargill

As a major dairy producing nation, New Zealand already has significant production
capabilities for dairy milk products. However, with oat milk now exploding in popularity,
investment company NZ Functional announced plans for the country’s first plant-based milk
factory to be built in Invercargill. Local oat player Harraway Foods (a leading player in oat-based
breakfast products) has announced that whilst it will not be an investor in the project, it will be a
supplier, and will contribute its expertise to the development of the facility, with its oats milled
and processed at its production facility in nearby Gore. With less than 1% of plant-based milks
sold in New Zealand being produced in the country, local manufacturing offers the potential to

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reduce supply chain costs for players in the category, which in the current high inflationary
environment could offer a significant competitive advantage.

PROSPECTS AND OPPORTUNITIES

Local production expected to support strong growth of oat milk

Oat milk has enjoyed rapid growth over the review period and into 2022, and has been a key
driver behind the growth observed in other plant-based milk. However, a key constraint to
growth in the category has historically been the lack of local production capability, with high
international supply chain costs impacting local prices. However, with the development of a local
production facility in the country, this constraint is expected to be eased. As the facility is being
developed by NZ Functional Foods for contract production rather than by an existing player, the
barriers to entry for local players have been significantly reduced, as they now have access to a
local contract producer. This is also expected to provide significant growth opportunities for
incumbents such as Otis and Boring Oat Milk. With improved production capability and growing
demand, distribution through supermarkets and access to more prominent shelf space in stores
is expected for oat milk players over the forecast period.

Cost-of-living pressures offer opportunities for plant-based dairy

High inflation, rising interest rates and higher dairy prices have combined to create a perfect
storm of cost-of-living pressures for middle-income earners in New Zealand. With the reserve
bank having indicated that interest rates are set to rise even further, and with sustained demand
for New Zealand dairy products, this is likely to see higher dairy prices on supermarket shelves
in New Zealand over the forecast period. This will prompt more consumers to either reduce their
dairy intake or look to alternative products. With plant-based dairy products not subject to the
same volatility as dairy products, combined with the commencement of local production and
reducing input costs for non-dairy players, cost-of-living pressures may see consumers shift to
plant-based dairy alternatives.

Innovation expected to drive growth for other plant-based milk

The rapid growth experienced by other plant-based milk is not expected to slow down any
time soon, and over the forecast period the category is expected to see the strongest
performance in plant-based dairy after plant-based cheese, which is growing from a very low
base. With conscious consumerism expected to grow further over the forecast period as the
government implements a number of initiatives to reduce New Zealand’s carbon footprint, high
levels of innovation and new entrants are expected in the category to service the growing
demand. Flavour innovation is one trend that is expected to feature highly. 2022 saw chocolate
flavoured oat milks introduced to the market, and further flavour developments are expected to
drive growth over the forecast period.

CATEGORY DATA
Table 1 Sales of Plant-Based Dairy by Category: Volume 2017-2022

2017 2018 2019 2020 2021 2022

Plant-based Cheese - - 0.0 0.0 0.1 0.1

('000 tonnes)

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Plant-based Yoghurt 0.0 0.0 0.0 0.0 0.0 0.0

('000 tonnes)
- Other Plant-based 5.6 7.0 8.0 9.0 10.2 12.3
Milk (million litres)
- Soy Drinks (million 4.8 4.8 4.8 4.9 5.1 5.4
litres)
Plant-based Milk 10.3 11.8 12.8 13.9 15.4 17.7
(million litres)
Plant-based Dairy (Not - - - - - -
calculable)
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Plant-Based Dairy by Category: Value 2017-2022

NZD million
2017 2018 2019 2020 2021 2022

Plant-based Cheese - - 0.0 0.1 0.1 0.2

Plant-based Yoghurt 0.2 0.3 0.3 0.3 0.5 0.6
- Other Plant-based Milk 30.4 36.5 44.0 52.1 61.3 76.7
- Soy Drinks 28.9 30.9 31.7 33.0 35.5 37.7
Plant-based Milk 59.2 67.4 75.7 85.1 96.8 114.4
Plant-based Dairy 59.5 67.6 76.0 85.5 97.4 115.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Plant-Based Dairy by Category: % Volume Growth 2017-2022

% volume growth
2021/22 2017-22 CAGR 2017/22 Total

Plant-based Cheese 95.0 - -

Plant-based Yoghurt 19.2 21.0 159.7
- Other Plant-based Milk 20.1 17.2 120.9
- Soy Drinks 6.0 2.8 14.5
Plant-based Milk 15.4 11.4 71.8
Plant-based Dairy - - -
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Plant-Based Dairy by Category: % Value Growth 2017-2022

% current value growth

2021/22 2017-22 CAGR 2017/22 Total

Plant-based Cheese 99.0 - -

Plant-based Yoghurt 20.1 21.5 165.2
- Other Plant-based Milk 25.2 20.4 152.6
- Soy Drinks 6.2 5.5 30.6
Plant-based Milk 18.2 14.1 93.2
Plant-based Dairy 18.3 14.2 93.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

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Table 5 Sales of Other Plant-Based Milk by Type: % Value 2019-2022

% retail value rsp

2019 2020 2021 2022

Almond 42.3 43.3 44.0 44.1

Coconut 35.7 37.2 37.7 37.8
Oat 7.8 8.8 10.4 12.6
Rice 5.3 5.4 5.5 5.5
Other Plant-based Milk 8.9 5.3 2.4 0.0
Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 NBO Company Shares of Plant-Based Dairy: % Value 2018-2022

% retail value rsp

Company 2018 2019 2020 2021 2022

Sanitarium Health Food 33.2 34.5 36.2 36.7 34.4

Co, The
Vitasoy International 31.2 31.8 32.2 31.5 32.5
Holdings Ltd
Hain Celestial Group 8.8 9.4 9.9 8.8 8.7
Inc, The
Woolworths (New 3.7 3.9 4.2 4.4 5.2
Zealand) Ltd
Foodstuffs (NZ) Ltd 4.0 4.3 4.6 4.9 5.2
Epicurean Dairy - - - 0.2 0.3
Holdings Ltd
Kingland Soy Products Ltd 0.3 0.3 0.3 0.2 0.2
Progressive Enterprises - - - - -
Ltd
Fonterra Brands (NZ) Ltd - - - - -
Other Private Label - - - - -
Others 18.8 15.8 12.6 13.4 13.5
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 LBN Brand Shares of Plant-Based Dairy: % Value 2019-2022

% retail value rsp

Brand (GBO) Company (NBO) 2019 2020 2021 2022

Vitasoy Vitasoy International 31.8 32.2 31.5 32.5

Holdings Ltd
So Good Sanitarium Health Food 29.7 31.6 32.4 30.2
(Australasian Co, The
Conference
Association Ltd)
Rice Dream (SunOpta Hain Celestial Group - - 8.8 8.7
Inc) Inc, The
Macro Organic Woolworths (New 3.9 4.2 4.4 5.2
(Private Label) Zealand) Ltd

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Pam's (Private Label) Foodstuffs (NZ) Ltd 4.3 4.6 4.9 5.2
The Collective Epicurean Dairy - - 0.2 0.3
Holdings Ltd
Kingland (King Kingland Soy Products Ltd 0.3 0.3 0.2 0.2
International Pty
Ltd)
Rice Dream Hain Celestial Group 9.4 9.9 - -
Inc, The
Anchor (Fonterra Fonterra Brands (NZ) Ltd - - - -
Cooperative Group
Ltd)
Macro Organic Progressive Enterprises - - - -
(Private Label) Ltd
Other Private Label Other Private Label - - - -
(Private Label)
Others Others 20.6 17.2 17.7 17.8
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 Distribution of Plant-Based Dairy by Format: % Value 2017-2022

% retail value rsp

2017 2018 2019 2020 2021 2022

Retail Channels 100.0 100.0 100.0 100.0 100.0 100.0

- Retail Offline 99.3 99.2 99.2 99.0 98.9 98.9
-- Grocery Retailers 99.3 99.2 99.1 99.0 98.1 97.5
--- Convenience Retail 16.3 16.2 16.2 16.0 15.8 15.7
---- Convenience Stores 9.6 9.6 9.6 9.5 9.4 9.3
---- Forecourt Retailers 6.6 6.6 6.6 6.5 6.4 6.4
--- Supermarkets 69.7 69.6 69.6 69.6 69.2 69.1
--- Hypermarkets - - - - - -
--- Discounters - - - - - -
--- Warehouse Clubs - - - - - -
--- Food/drink/tobacco 8.4 8.4 8.4 8.4 8.2 8.2
specialists
--- Small Local Grocers 4.9 5.0 4.9 5.0 4.8 4.5
-- Non-Grocery Retailers - - - - 0.8 1.3
--- General Merchandise - - - - - -
Stores
--- Apparel and - - - - - -
Footwear Specialists
--- Appliances and - - - - - -
Electronics Specialists
--- Home Products - - - - - -
Specialists
--- Health and Beauty - - - - - -
Specialists
--- Leisure and - - - - - -
Personal Goods
Specialists
--- Other Non-Grocery - - - - 0.8 1.3
Retailers
-- Vending 0.1 0.1 0.1 0.0 0.0 0.0
-- Direct Selling - - - - - -
- Retail E-Commerce 0.7 0.8 0.8 1.0 1.1 1.1
Total 100.0 100.0 100.0 100.0 100.0 100.0

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 9 Forecast Sales of Plant-Based Dairy by Category: Volume 2022-2027

2022 2023 2024 2025 2026 2027

Plant-based Cheese 0.1 0.2 0.3 0.5 0.9 1.5

('000 tonnes)
Plant-based Yoghurt 0.0 0.1 0.1 0.1 0.1 0.1
('000 tonnes)
- Other Plant-based 12.3 14.6 17.4 20.1 22.5 24.8
Milk (million litres)
- Soy Drinks (million 5.4 5.7 6.0 6.2 6.4 6.6
litres)
Plant-based Milk 17.7 20.3 23.4 26.3 28.9 31.4
(million litres)
Plant-based Dairy (Not - - - - - -
calculable)
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Sales of Plant-Based Dairy by Category: Value 2022-2027

NZD million
2022 2023 2024 2025 2026 2027

Plant-based Cheese 0.2 0.4 0.7 1.1 1.7 2.7

Plant-based Yoghurt 0.6 0.7 0.8 0.9 1.0 1.1
- Other Plant-based Milk 76.7 92.2 108.9 125.3 140.4 154.6
- Soy Drinks 37.7 39.6 41.5 43.2 44.7 45.8
Plant-based Milk 114.4 131.8 150.4 168.6 185.1 200.4
Plant-based Dairy 115.2 132.9 151.9 170.6 187.8 204.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Plant-Based Dairy by Category: % Volume Growth 2022-2027

% volume growth
2022/23 2022-27 CAGR 2022/27 Total

Plant-based Cheese 83.1 71.1 1,367.8

Plant-based Yoghurt 17.7 12.7 82.2
- Other Plant-based Milk 19.2 15.1 102.1
- Soy Drinks 5.0 3.9 21.0
Plant-based Milk 14.8 12.1 77.2
Plant-based Dairy - - -
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 12 Forecast Sales of Plant-Based Dairy by Category: % Value Growth 2022-2027

% constant value growth

2022/2023 2022-27 CAGR 2022/27 Total

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Plant-based Cheese 75.4 63.9 1,083.7

Plant-based Yoghurt 18.1 13.1 85.5
- Other Plant-based Milk 20.1 15.0 101.4
- Soy Drinks 5.2 4.0 21.7
Plant-based Milk 15.2 11.9 75.2
Plant-based Dairy 15.3 12.1 77.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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