South Africa's UHT milk market continues to grow

© Valentyn Volkov Volkov – 123RF.com

"Our studies have shown that whilst the total milk market has grown, demand for the fresh product has levelled off and consumers are increasingly using the long-life variety. Indications are that demand in the UHT category will remain positive and will grow between 7-9% over the medium to longer-term."

Several factors underpinned this growth, predominantly the lifestyle habits of the emerging middle class, and the increased number of retailers selling UHT milk as a private label brands.

"Historically, long-life milk was the product of choice for lower income consumer groups because it didn't require refrigeration, and those buying habits haven't changed even though their socio-economic status has. These consumers have had limited exposure to fresh milk and, as their socio-economic status has improved, they are not only sticking with UHT Milk, but they're consuming more.

"Another contributing factor to the growth of UHT milk in recent years is that retailer's private label brands have become more prominent, with chains such as PnP, Spar, Woolworths and more recently, Shoprite actively developing and promoting their private label UHT milk brands as a draw card for customers."

More dairies have also expanded into the long-life milk market over the last few years including Farmgate and Koega, further contributing to the category's growth and, although a UHT processing plant requires a sizeable investment, a number of other players were also considering making the move because Henning said, "they can't ignore the upward trend."

Packaging in the UHT category was dominated by the 1-litre carton, which showed positive growth in recent years. Convenience, longevity and storage benefits are also key factors in the carton's popularity. In addition to the 1L carton, the introduction of the 1L HDPE long life pack a few years ago also contributed to the growth and appeal of the category.

"We do not believe that South African consumption of UHT milk will reach the levels of some European countries. However, research does suggest that the South African UHT milk market will continue to grow at the expense of fresh milk and that there will be increased activity in the sector from both producers and retailers which will fuel growth even further," concludes Henning.