Dairy Market - Is Functional Still a Driving Force? - Ireland - November 2010

About this report

The Irish dairy market has proved more robust than other food categories in the recession, growing by 4% in value sales over the last five years to reach an estimated €1.4 billion in 2010, despite the impact of heavy promotional activity and trading down over 2009 into 2010.

Health is both the biggest asset and liability for the Irish dairy industry, with low-fat and functional dairy products gaining market share, but negative press on saturated fats deterring some consumers.

While fluctuating global milk prices are an ongoing concern, the outlook for the Irish dairy market is broadly positive, with major investment in both generic marketing and company infrastructure boosting prospects, while the cheese and yogurt sub-categories are ripe for expansion.

Table of contents

Issues in the Market
Key themes in the report
Definition
Abbreviations
Market in Brief
Recession dampens value returns in RoI
Yogurt market offers growth potential
Health is the key driver across dairy
Origin comes to the fore
Investment set to bolster Irish dairy prospects
Consumer opportunities
Internal Market Environment
Key points
Research continues to back up dairy’s health benefits
Figure 1: Nutritional benefits of milk*, 2010
Food agency urges consumers to opt for low-fat dairy products
Nutritional labelling highlights fat content
Recession and regulations hit functional dairy category
Figure 2: Summary of dairy claims eligible for approval under new EC health claims regulations, 2010
Dairy proves more resilient than other organic categories
Figure 3: Agreement with the statement ‘It’s worth paying more for organic food’, NI and RoI, 2004-09
Provenance plays a major role in Irish dairy market
Figure 4: Agreement with the statement ‘I buy goods produced by my own country whenever I can’, RoI and NI, 2004-09
Irish dairy industry tackles environmental concerns
Figure 5: Agreement with the statement ‘I would be prepared to pay more environmentally friendly products’, RoI and NI, 2004-09
Marketing support
National Dairy Council (NDC) of Ireland
Dairy Council of Northern Ireland
Milk in Action joint campaign
Broader Market Environment
Key points
Recession: A mixed bag for the dairy sector
Figure 6: Economic outlook, RoI and NI, 2008-10
Irish dairy sector confidence improves
Farmgate milk prices improve
Price crisis of 2009 highlights impact of CAP reform
Producers feel the squeeze as supermarkets move in
Boost for school milk programmes
Figure 7: Technical changes to the standards for school foods, UK, 2008
An ageing population presents challenges for dairy industry
Figure 8: Population demographics, by age, RoI, 2006-41
Figure 9: Population demographics, by age, NI, 2008-58
Elevating dairy products among teenagers
Growth in middle and third age consumers supports functional category
Market Size and Forecast
Key points
Irish dairy market survives a turbulent 2009
Figure 13: Estimated retail sales of dairy products*, IoI, RoI and NI, 2005-15
Retail value sales grow by 4% over 2005-10
Health, functionality and provenance offer market growth opportunities
Market Segmentation
Key points
Milk yields market share to yogurt
Figure 14: Segmentation of dairy market, RoI and NI, 2010
Figure 15: Market segmentation of dairy, RoI and NI, 2005-10
Milk
Milk market bottoms out in 2010
Figure 16: Estimated retail sales of milk, IoI, RoI and NI, 2005-15
Recession and cross-border shopping exert pressure
Low-fat and fortified milk driving growth
Downward trend continues in RoI as deflation counters volume sales
Growth slows – but continues – in the NI milk market
Cheese
Figure 17: Estimated retail sales of cheese, IoI, RoI and NI, 2005-15
Cheese market remains buoyant despite branded promotions
Competition and trading down hit RoI cheese market
NI cheese market continues to climb
Yogurt
Figure 18: Estimated retail sales of yogurt, IoI, RoI and NI, 2005-15
Yogurt market offers great scope for expansion
Functional claims sweep yogurt – and the dairy market
Functional brands lead RoI category
NI yogurt category welcomes NPD
Butter, spreads & margarine (BSM)
Butter
Figure 19: Estimated retail sales of butter, IoI, RoI and NI, 2005-15
Butter comforts credit crunch consumers
Spreads
Figure 20: Estimated retail sales of dairy spreads, IoI, RoI and NI, 2005-15
Discounting dampens sales of spreads
Margarine
Figure 21: Estimated retail sales of margarine, IoI, RoI and NI, 2005-15
Long-term decline continues for margarine
Companies and Products
Key points
Figure 22: Key companies and brands supplying the RoI and NI dairy markets, 2010
Arla Foods UK plc (Arla)
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Clandeboye Estate Yoghurt
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Dale Farm Ltd
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Dairygold Food Ingredients
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Danone UK Ltd
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Donegal Creameries plc
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Fivemiletown Creamery
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Glanbia plc
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Kerry Group plc
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Kraft Foods
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
St Helen’s Farm
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
Unilever
Corporate profile
Brands and products
Brand strategy
Brand NPD and marketing
The Consumer – Consumption
Key points
Cheese in blocks
Block cheese has lowest penetration in one-person households
Figure 23: Penetration of cheese in blocks, RoI and NI, 2004-09
Health-conscious consumers cut back on frequency of consumption
Figure 24: Frequency of consumption of cheese in blocks, RoI and NI, 2004-09
Cheddar dominates, with greater origin loyalty in RoI
Figure 25: Types of cheese consumed (cheese in blocks), RoI and NI, 2004-09
Favoured cheese types: More English cheddar for NI and Brie for RoI
Figure 26: Types of cheese eaten most often (cheese in blocks), RoI and NI, 2004-09
Packeted, spread and speciality cheeses
Mothers eat more non-block cheese
Figure 27: Penetration of packeted, spread and speciality cheeses, RoI and NI, 2004-09
RoI consumers trade down to light usage
Figure 28: Frequency of consumption of packeted, spread and speciality cheeses, RoI and NI, 2004-09
Greatest growth for grated cheese
Figure 29: Penetration of varieties of packeted, spread and speciality cheeses, RoI and NI, 2004-09
Butter
Solid growth for butter
Figure 30: Penetration of butter, RoI and NI, 2004-09
Lower frequency of butter usage for health-conscious professionals
Figure 31: Frequency of consumption of butter, RoI and NI, 2004-09
Soft margarine
Higher penetration in NI for soft margarine
Figure 32: Penetration of soft margarine, RoI and NI, 2004-09
Usage of soft margarine shifts towards ‘light’
Figure 33: Frequency of consumption of soft margarine, RoI and NI, 2004-09
Low-fat spreads and dairy spreads
Weight-conscious married women favour spreads
Figure 34: Penetration of low-fat spreads and dairy spreads, RoI and NI, 2004-09
Younger consumers are light users of spreads
Figure 35: Frequency of consumption of low-fat spreads and dairy spreads, RoI and NI, 2004-09
Yogurt and fromage frais
Female and affluent consumers lead yogurt consumption
Figure 36: Penetration of yogurt and fromage frais, RoI and NI, 2004-09
An opportunity to increase frequency of usage?
Figure 37: Frequency of consumption of yogurt and fromage frais, RoI and NI, 2004-08
Figure 38: Frequency of consumption of yogurt and fromage frais*, RoI and NI, 2009

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Related research categories

By sector: Dairy (in Soft drinks), Functional (in Soft drinks)

By market: Ireland (in Europe)