The value growth for buttermilk and maas was attributed to increases in both volume and industry price. The average industry selling price (ISP) grew during 2017. The category’s industry selling price grew at an average rate of 4.3% year-on-year over the last five years compared to the CPI’s average of 5.6%. The average weighted ISP increased by 5.8% from 2016 to 2017. The higher than inflation price increase may be attributed to the fluctuation in price of raw milk.
The higher than inflation price increases may be attributed to the fluctuating price of raw milk after the drought season as well as an increase in distribution costs. Particular channels and regions saw an increase in smaller pack sizes that cost more in rand per litre terms, as customers downgraded pack sizes in alignment with budget constraints.
The forecourt and retail sectors (bottom and top end retail) dominated product distribution in 2017 with a collective volume share of 81.3%. The bottom end retail accounted for 20.9% of the total volume sold in 2017 compared to the 20.6% share achieved in 2016. The channel was used predominantly by regional players selling larger pack sizes to their customers and also included farm stores where customers purchased their products directly from the producer. Top end retail and forecourts accounted for 60.4% of the overall volume sold in 2017. These channels are known for their wide range of brands and price points.
KwaZulu-Natal remained the core region for the production and sales of buttermilk and maas products, accounting for 35.7% of the total volume in 2017. This region has a significant number of farmers producing maas compared to other regions and this product is considered more of a staple diet component in this region than for other provinces. The average selling price of buttermilk and maas in the region was slightly lower compared to other regions, likely as a result of the increased competition in the region. The surplus volume produced in KwaZulu-Natal is supplied to the rest of South Africa.
Rigid plastic remains the dominant pack type for the category, accounting for 93.5% of the total volume sold in 2017. The pack type group is easier to transport than sachets. The main denomination driving the pack size share was the 2 litre and above, sold at a cheaper price in Rand per litre terms than other pack sizes.
The category is considered a cheaper protein source that performs well when the economy is struggling to grow. Given this positioning, the category is expected to grow in the short to medium term.
