The flavoured milk category declined in volume in 2017. South Africa experienced drought in 2016 which persisted until the beginning of 2017 and affected many sectors, including the dairy beverage sectors. The flavoured milk category experienced pressure from the supply side as the drought persisted in the beginning of year. This may have potentially resulted in less white milk available for the production of flavoured milk. In addition, economic pressures experienced in 2017 may have also negatively affected the category indirectly, such as the downgrade of the South Africa’s credit rating to ‘junk status’. This announcement rattled many investors and with reduced investment, the nation’s money supply decreased, effectively raising the production costs of many goods and services.
September 12, 2018