Dairy Company Bets on Vegemite to Stay Afloat

Australian dairy company Bega Cheese recently announced its purchase of popular plant-based spread Vegemite for $460 million from US-based corporation Mondelez. “It does diversify Bega in complementary markets and categories beyond dairy,” the company’s executive chairman Barry Irvin said. “We’ve been saying for a while that we were looking for opportunities beyond dairy, and I think there are few better than the one we have identified and acquired.” While Irvin did not claim his company would move away from dairy entirely, he admitted that the recent acquisition would be a source of stability for Bega, explaining that it is “an absolute commitment to trying to run a low risk business, and a business that has strength to deal with times of significant volatility.” Bega is selling several of its dairy assets—namely an infant formula facility and a spray drying (a process used to turn liquid milk into powder) plant—worth a total of $200 million help to pay for the purchase. While the dairy industry in Australia (and neighboring New Zealand) has experienced a severe slump in recent years, the continent’s residents have become increasingly interested in veganism. Recent research shows that “vegan” was the most-Googled dietary term across Australia in 2016, and new vegan product launches have increased by 92 percent since 2014.