Dairy Farmer’s Coon Cheese – Competition and Product

Offerings

Australian Dairy Industry

 The dairy industry of Australia is the third most significant rural industry at
the farm gate – valued at $3.2 billion in 2006/07 – and the fifth most
significant in agricultural exports – valued at $2.5 billion.

 Milk production slipped 5% during 2006/07, under the pressure of widespread

drought, to 9.6 billion litres. Export returns followed the same example,
reflecting the availability of product for sale.

 In the local market, supermarket sales of dairy products continued to hike in

volume and value – the retail market for major dairy products totalled more
than $4 billion in 2006/07 – with stable price expansion across all the major
dairy categories.

Australian Cheese Market (Situation and Outlook)

The Asia-Pacific cheese market expected to witness a dramatic increase in its

market value during the last decade. Being the second largest cheese market in
Asia-Pacific, Australia continued accounting for a large part of this
market. The Australian cheese market had enjoyed strong since 1999 but during the
current years it was experiencing some tough time due to obesity concerns and
changing healthy lifestyle concerns of the consumers.

Despite being a mature dairy market the Australian market is unable to show
dependable volume and value growth in current years.
Dairy products sale in the domestic market has increased by 7% value in the past 12
months mainly due to high price increases. Value growth varies between 4 and 14%
but customers have responded in some categories by purchasing less due to increasing
prices.

In the category of cheese, dairy blends and yoghurts sales volume have declined in the
past 12 months as customers opposed higher prices. But still growth continued in milk
and butter.

The average retail prices have been strong over the year and above the prevailing
inflation rate across all major dairy products categories. Milk sales volume are
expected to raise but current data shows that consumers are changing their purchase
patterns from branded to private label such as “home brands” products to limit the
outcome of price hike.

Higher Prices and Consumer Shifts

The confrontation of retailers to recognize and pass on higher prices from dairy
manufacturers has increased due to this private label environment. Sales through a
wide variety of foodservice outlets are growing at a much faster rate than
supermarkets. These outlets offer rising opportunities for dairy, with less price
sensitivity to consumers, although they are often more demanding to service.

Cheese Market

In recent years, cheese has come under significant market pressure as a core food
group from obesity concerns and fortified or functional foods that can replace dairy
products like cheese. This competitive pressure has started to marginalise cheese in
the minds of consumers. As a result, over the past two years, some key attitudes on
dairy have declined and sales have dropped in some dairy categories, such as cheese.

Dairy Farmer’s Coon Cheese

 Coon cheese is one of the famous brands in Australia. Dairy Farmers is the
company that produces Coon cheese.

 Dairy Farmers’ Coon is a versatile natural cheddar cheese that is 100% natural
and free from preservatives.

 Dairy Farmers offers a selection of Coon cheeses in block, shredded and sliced
varieties and in many flavours. Some of the major flavours are original tasty,
light and Tasty, Extra Tasty, Swiss and Colby.

 Coon is 100% natural, real cheese that is cut straight from the block and has
been a part of Australian life since 1931.
  Coon Cheese comes in a range of sizes and varieties. Coon cheese is supplied
to major super stores all across Australia. Some of the major clients for
branded Coon cheese are restaurants, fast food chains and hotel industry.

Coon Product Offerings

COON Tasty
Coon tasty is the original, best and most loved flavour. A must for any sandwich and
will melt and bubble nicely under the grill. It is available in block, natural slices, and
big natural slices, shredded and shaved.

COON Light & Tasty

It is a great taste of COON with 25% less fat yet 30% more calcium. Available in
block, natural slices, big natural slices, shredded and shaved.

COON Extra Tasty

COON Extra Tasty is natural cheddar cheese with a distinct flavour. Aged for up to 9
months to allow the cheese to mature, COON Extra Tasty is perfect for those wanting
extra strong flavour. Available in block, natural slices and shredded.
COON Colby
COON Colby has a milder and creamy flavour that the whole family will love. This is
a great cheese for melting. This flavour is available in block and natural slices.

COON Swiss
This brand of Coon cheese has a sweet, mild taste adds an extra dimension to a
traditional toasty. It melts perfectly and with some smoked ham and tomato makes a
gourmet treat. A mild flavour makes it prefect for families. It is available in natural
slices.
 LEADING COMPETITORS

Homebrand

Homebrand cheese is another main competitor for Dairy Coon. Homebrand is famous
for its low priced products. Exclusive to Woolworths, Homebrand was established
more than 30 years ago. Today, it offers Woolworths' customers over 950 product
lines. All Homebrand products are sourced either locally or internationally to ensure
customers have access to the best possible choice and quality, at affordable and
competitive prices.

Homebrand has developed a network of Trade Partners both locally and globally who
are certified under the Woolworths Quality Assurance (WQA) program. WQA
certification ensures customers benefit from safe, quality products.

To compete with Homebrand, Coon needs to develop and excellent supply chain and
distribution facilities including international consolidation and logistics. These are
some grounds on which Coon should work on to compete with other supermarket
brands.

Bonlac Foods Ltd

Bonlac Foods Limited is one of Australia's leading dairy products manufacturers. It is

a producer of cheese, butter, milk powders and speciality ingredients and also a
contract packer of consumer products. The company earns approximately half of its
revenues from exports.
Bonlac Foods is 50% owned by Bonlac Supply Company, which has about 2,500
Supplier Shareholders in the Australian States of Victoria and Tasmania, and 50%
owned by Fonterra Co-operative Group Ltd of New Zealand. The company is
headquartered in Melbourne, Australia.

Fonterra Cooperative Group

Fonterra Co-operative Group Ltd, generally known as Fonterra, is New Zealand's

leading company by turnover and is a major competitor for Dairy Farmers. A
cooperative, Fonterra is owned by approximately 11,000 farmers throughout the
country. It is the sixth-largest dairy company in the world, and the most significant by
far when it comes to determining international dairy trade, handling over a third of all
international dairy trade. Fonterra was established in October 2001 through a merger
of the two largest New Zealand dairy cooperatives and the New Zealand Dairy Board.
The purpose of the merger was to create a single company to manage the supply chain
for a significant proportion of the New Zealand dairy industry. Fonterra Co-operative
Group Limited is a multinational dairy company whose goal is simple: to lead in
dairy.
Fonterra is based in Melbourne; they have a dedicated global sales channel across 70
countries to fulfil the consumer demands. Their client range includes fast food chains,
cafes, restaurants, bakeries and hotels.
McDonalds, Dominos, KFC, Oporto, Subway and Bakers Delight are some of the
clients of Fonterra. They are provided with branded dairy products, core ingredients
and many ready to use products.

Fonterra as a competitor for Coon cheese in Australia

Being a big multinational in dairy business Fonterra is also a big competitor for Coon
cheese. In Australia, Fonterra has revenues of $1.9 billion, processes 21 per cent of all
Australian milk and employs over 2,000 people.

Fonterra considers Australia to be part of its home market with legacy companies
operating businesses in Australia since the 1960s. Australia is a vital part of Fonterra’s
Trans-Tasman home market and through their legacy companies, Fonterra have
existed in Australia for well over 50 years.

Bega Cheese

Bega Cheese has been made in New South Wales’ Bega Valley for well over 100
years, in fact, since 1899. Bega’s heritage is firmly entrenched in natural, nourishing
cheese from the lush green pastures of the Bega Valley. The Bega brand resonates the
honesty and integrity of the country with its wholesome and unpretentious
characteristics. Bega is a proud Australian brand that has product offerings in natural,
processed and kids’ cheese, and is one of the key players in all of these categories,
particularly natural cheese.

Bongrain SA

Bongrain SA specializes in the production of a variety of commodity and specialty

cheeses, including Brie, Camembert and goat's cheese.
The company is experiencing increased due to improved sales volumes, good trends
on major consumer products and maintained world prices on powders and milk fats.
Bongrain is present in over 150 countries and offers several hundred different cheese
brands. The company is headquartered in Viroflay, France.

Changing Trends in the Cheese Market

The growing range of specialty cheeses, locally manufactured or imported, and now
broadly found in supermarkets and chain stores, is supplying Australian consumers
with a much larger and more effortlessly available option. This experience has not
only bringing a difference from shopping for these cheeses at specific stores to
supermarkets, but through in-store advertisements and promotions which have
introduced many more consumers to the flavour of speciality cheeses. This has
customised their palates to a more urbanised taste than that of the local salt
dominated, cheddar type cheese.
 Leading Competitors in Specialized cheese

Estimated market shares of leading local manufacturers of speciality cheese (who may
also sell imported cheeses), are Lactos with five per cent by value and 2.6 per cent by
volume of the total cheese market. King Island Dairy with 4.5 per cent and two per
cent, Manassen with three per cent and 1.2 per cent and National Foods with 11 per
cent and 1.3 per cent, whilst a large number of individual cheeses are imported by sole
agents, such asjarlsberg by Canterella Bros, accounting for 7.6 per cent and six per
cent respectively.
 Bibliography

Annual Report 2006-2007, retrieved from Australian Dairy Industry Official

website www.dairyaustralia.com.au
Australian Bureau of Statistics, National Regional Profiles, Australian
Government, 2007
Australian Bureau of Statistics, SA Office Agricultural Census, 2000-2001
Value of Product Australia, Australian Government, 2001
Dairy Industry Development Board, SA Dairy Industry Strategic Plan 2010,
Dairy Industry Development Board