Hello Reader,

We pay less for yoghurt today than we did in 1997.

In April 1997, a 1L of Fresh'nFruity had an average national price of $4.55 - which is $9.24 in CPI-adjusted 2026 dollars. Today, my local Paknsave has it for $4.89.

And in fairness, the 90s were not kind on consumer dairy in New Zealand. 2L of milk opened the decade around $1.99 in real terms with the Woolworths Milk Flavoured Milk product, and closed the decade around $3. Through the 90s, processors got purchased by the NZCDC, which probably removed some competitive pressure on the industry. Foodstuffs Wellington was clearly worried enough about this that in 2000 it set up its own milk processor (United Milk) to secure pricing and supply for the lower North Island.

Fonterra then formed in 2001, and by the looks of it prices stabilised - so much so that Foodies sold their milk brand (which by that point they had merged with Kapiti Ice Cream) to Fonterra in 2005.

But since then, consumer dairy looks like it's been a vibrant ecosystem. There's been new products and innovation all over the place, acquisitions have been constant, and it looks like there's been downward pressure on prices.

Which surprises me - milk feels like the toughest industry to set up in. Food safety controls are tight, cold chain is expensive, and inputs and outputs are both fairly commoditised. But The Collective set up their own factory bootstrapped. Cyclops look like they set up bootstrapped. Gopala have set up their own factory.

This week on the 'gram I've been looking at yoghurt and fonterra, and thinking about the inexplicable reason the french seem to have their fingers in our dairy ecosystem (Lactalis own fonterra's consumer brands, Sodiaal own the Yoplait branding, Danone is purchasing the group that owns The Collective).

We're currently seeing independent brands get established in the low end of the market (undercutting Fresh'nFruity and Yoplait) like Gopala and Kishna, and innovation in the higher ends (Cyclops, Biofarm, Kings Creamery). There's what looks like a thriving dairy-free yoghurt ecosystem. Plus it looks as though there's enough diversity in the contract packing ecosystem that Lewis Road could become perhaps the greatest innovation story in New Zealand.

And I wonder how much the possibility of massive acquisition outcomes plays into the reason that entrepreneurs are willing to risk their own capital to get started.

Either way, all the activity in the category appears to be good for consumers in both price and innovation. Which backs up my main grocery thesis - I want kiwis to "make food weird again" because weird niche stuff makes food better for everyone: price, variety, and new thinking.

What I'm reading

I'm thinking a lot about kiwifruit at the moment, because Zespri is a fascinating story. I'm sourcing a bunch of details from this MA thesis from John Brian Milne. Looking forward to telling some of these stories.

What I'm watching

Came across this clip of a younger John Cameron talking about Telecom from sometime in the 2000s. The transparency of Telecom sponsoring the programme that he discloses feels like a different era of media, and it's so nostalgic to watch.

That's all from me this week. Hit me with anything you're seeing or thinking about in the consumer space.

Reuben