DAIRY: WORLD MILK DAY - Why dairy? For all-day focus and energy

With diversity in agricultural capabilities and strong infrastructure for production and processing, South Africa plays a significant role in the global dairy market. South Africa has approximately 1.4 million dairy cattle, generating about 3.34 billion litres of milk annually and employing more than 40 000 people. This production level is an indication of South Africa’s capacity to maintain a steady and reliable milk supply, creating a seamless supply chain from farms to processing facilities and further into stores.

World Milk Day, established by the Food and Agriculture Organisation (FAO) of the United Nations in 2001, highlights the importance of milk as an important global food source and celebrates the dairy sector. As South Africa marks National Milk Day on 1 June, retailers and suppliers in the dairy value chain have much to celebrate – and even more to prepare for. With strong local production, rising global demand, and evolving consumer preferences, the industry is presenting fresh opportunities for innovation, distribution and profit.

Driven by advances in processing, packaging, increased export activity and a steady domestic appetite for high-quality dairy products, the sector is proving resilient.

• Revenue in the Milk market amounts to US$747.73m as of March 2025. The market is expected to grow annually by 4.89% (CAGR 2025–2030).
• In the Milk market, volume is expected to amount to 441.94m kg by 2030 and show a volume growth of 0.8% in 2026.
• Per person revenues of US$11.55 are generated, in relation to total population figures.
• The average volume per person in the Milk market is expected to amount to 6.6kg in 2025.

Milk – South Africa, March 2025  (statista.com)

As the process may be lagging, retailers need to ensure product compliance, labelling, and traceability standards for export markets like China and the UAE.

For the rest of Africa, South Africa is currently exporting an average of 87 696 tons/year of UHT liquid milk to the SADC region by suppliers. On another positive note, Foreign Agricultural Services Pretoria (FAS Pretoria) forecasts that liquid milk imports for 2025 will decrease by 50 percent because of locally produced milk. For South African producers, the Chinese and SADC markets represents both scale and premium pricing potential. For retailers and wholesalers, this opens room to explore partnerships and private-label export ventures, especially in long-life milk and premium cheeses.

Innovation and excellence

The 192nd South African Dairy Championships, held in April, “serves as a platform to showcase exceptional dairy products, highlighting not only their diversity and quality but also the significant contribution the industry makes to the South African economy,” pronounces Breyton Milford, General Manager, Agri-Expo. The expo drew a record-breaking 1 110 entries from 77 producers. The event held at Eensgezind outside Durbanville, is Africa’s largest and oldest dairy competition, showcasing the industry’s innovation and excellence.

The prestigious Dairy Product of the Year award was bestowed upon a mascarpone with fig and pecan nuts, made by RFG Foods for Woolworths. This indulgent dessert cheese stood out among the entries for its harmonious blend of flavours and smooth texture, earning high praise from the panel of 103 expert judges. Private label brands made a significant impact at the championships. Shoprite and Checkers’ private label products secured first place in seven categories, including top honours for Crystal Valley Medium Fat Maas and Forage and Feast Double Cream Yoghurt Green Melon & Mint.

Similarly, SPAR’s private label range achieved notable success, winning first place awards for their Fat Free Plain Yoghurt, Double Cream Plain Yoghurt, and various cottage cheeses, along with a prestigious Qualité Award for the SPAR Double Cream Plain Yoghurt. In the specialty cheeses category, Fairview Wine and Cheese emerged as a standout, securing 13 SA Champion awards and two Qualité Awards, the highest number of SA Champion awards for any producer this year. Other notable achievers included Klein River Cheese, Lancewood, and RFG Foods, each earning multiple SA Champion titles.

Consumer demand for dairy products is decreasing as prices rise

The rising price of dairy is having an impact on sales. Prices of dairy products increased from September 2022 to September 2023 by between 8,6% and 16,8%.

In the 12-month period to September 2023, the retail demand for all dairy products, with the exclusion of cream cheese, decreased by 1,1%–10,7%. The sharp increase in retail prices led to the retail sector being able to maintain, and in some cases increase, retail turnover, unfortunately it was not the case for milk processers, who did not share in the higher retail prices, according to Farmers Weekly. Other factors include interest rates that are at the highest level in many years, and food and non-food inflation is high.

Load-shedding and fuel prices are forcing consumers, including lower income consumers, to spend more money on luxury food items and non-food stuffs. Keeping updated on consumer needs and behaviours is key for retailers. Despite the financial upheaval, the demand for high end dairy products is still in demand, as can be seen by the decadent offerings at the South African Dairy Championship. Keeping a sharp eye on consumer needs while catering for price sensitive consumers, retailers are experiencing a dynamic transformation when it comes to new trends, blending health-conscious choices with a celebration of local flavours and natural ingredients.

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