South Africa UHT Milk Market to Exhibit 11.2% CAGR from 2013 to 2019

Published On : Apr 20, 2015

Ultra-high temperature processing (UHT) is a widely used technique for milk production by heating it to more than 135°C, which is required to kill the spores present in milk. UHT milk, if kept concealed, has a shelf life of about six to nine months and bears the same nutritional qualities as pasteurized milk. The long shelf-life of UHT milk has encouraged users to buy it as a nonperishable grocery. The rising preference for UHT milk can be attributed to it not spoiling even due to power cuts. It has also been gaining popularity amongst the low-income population due to its affordable price.

The South Africa UHT milk market is anticipated to be worth US$1185.3 million in 2019, exhibiting a promising 11.2% CAGR between the years 2013 and 2019.

South Africa is witnessing rapid urbanization in past few years, which is indirectly fueling the demand for UHT milk market across the nation, by encouraging bulk purchase of groceries, including UHT milk. As per the statistics provided by the South African Institute of Race Relations (SAIRR), two thirds of the population in South Africa lived in urban areas in 2011, which signifies a 52% rise since 1990. Some of the rapidly growing cities of South Africa include Vanderbijlpark, Rustenburg, Polokwane, Ekurhuleni, and Nelspruit. 

Mid-Day Meal Programs to Drive UHT Milk Market in South Africa

The vast availability of animal fodder and feed in South Africa has been a big help to the dairy companies in maintaining constancy in cost of dairy manufacture. Moreover, it also helps dairy companies maintain an effective supply chain and constant retail prices of the dairy products. The presence of animal feed companies has further promoted the smooth supply of feed to animal farms.

The competency of the many prominent companies to maintain constant retail prices and the rising acceptance between all classes is expected to fuel the demand from the UHT milk market in South Africa. Major UHT milk companies carry out the distribution process of their products through large-size hypermarkets and supermarkets as well as small independent retailers and convenience stores; hypermarkets and supermarkets generate larger sales volume than small-sized stores. Many schools in South Africa are opting for UHT milk in midday feeding programs, which is one of the factors boosting the demand for UHT milk in South Africa. 

Powdered Milk to Hamper Demand for UHT Milk in the Near Future

On the other hand, the rapidly rising powdered milk market in South Africa is the biggest challenge for the UHT milk market and holds a significant threat for the future growth trajectory of the UHT milk market. High growth rate makes the UHT milk market one of the most attractive industries for new entrants in the South African market; nevertheless, the lack of capital and expertise makes their entry tough. Competition in the South Africa UHT milk market is fierce, owing to the large number of private brands and existing players.

Raw milk is preferred by most of the consumers due to its freshness and extra nutritional value. Moreover, the raw milk market in South Africa is majorly concentrated at the top and unorganized, which is one of the restraints for the UHT milk market.

Stiff Competition among UHT Milk Market Players

The South Africa UHT milk market is highly competitive due to increasing demand from consumers. Some of the prominent players of the UHT milk market in South Africa are Parmalat SA, Coega Dairy, Dewfresh Products, Clover Industries, and Woodlands Dairy. Many entrants are further expected to participate in the UHT milk market in the near future.

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