Irish Dairy Market: Is it Slimming Down?

Published by: Mintel International Group Ltd.

Published: Mar. 1, 2007 - 93 Pages

Table of Contents

Introduction

Definition

Consumer research

Abbreviations

Market In Brief

Dairy products sales continue to flourish in Ireland

Dairy market continues to focus on health

Premiumisation will continue as continental tastes flourish

Milk in beverage market has not been fully explored

Age-oriented dairy products will vary in each part of Ireland

Producers begin to target global markets

Internal Market Environment

Key points:

Health

Irish consumers are aware of their diet choices

Figure 1: Proportion of adults who agree with the health/diet statements, NI and RoI, 2006

Diets: to include dairy or not?

Dairy reaches out to health-conscious consumers

Allergy-free diet does not mean dairy-free diet

Organic dairy produce in high demand

Figure 2: Predicted market shares (%) in Ireland for organic products, 2002-06

Technology makes milk more appealing

Adding more vitamins

Longer life for skimmed milk

Pricing

RoI milk prices fall rapidly

Figure 3: Indices of producer prices of milk output, NI and RoI, 2000-05

Paying more for specialised/continental cheese

Figure 4: Price of varieties of cheese, NI, 2007 (Prices in £/Kg)

Big name supermarkets continue to push down prices

Ireland exports exceed imports of dairy

Figure 5: Exports and imports of dairy, RoI, 1999-2005 (€ millions)

Competition within Ireland for milk producers

2004 EU reform means only the most efficient farmers will survive

Broader Market Environment

Key points:

Targeted dairy produce

Growing population should drive demand

Figure 6: Population and projected growth, NI, RoI and all-Ireland, 2000-20

Northern Ireland will experience an ageing population

Figure 7: Population, by age group, NI, 2000-20

Increase in birth-rate in the Republic of Ireland

Figure 8: Population, by age group, RoI, 2000-20

Household size declining

Figure 9: Household size, NI and RoI, 1997-2005

Market Value

Key points:

Figure 10: Market size of dairy, NI, RoI and all-Ireland, 2001-12

Figure 11: Market size of dairy, i NI, RoI and all-Ireland, 2001-012

Segment Performance

Key points:

Milk plays greater role in NI

Figure 12: Market segmentation of dairy, NI and RoI, 2006

Figure 13: Market segmentation of dairy, NI and RoI, 2001-06

Milk

Figure 14: Sales of milk, NI and RoI, 2001-12

Demand for organic milk is minimal but growing

Whole milk is still dominant but falling

Figure 15: Type of milk sold for human consumption in RoI, 2000-06

Cheese

Figure 16: Market size of cheese, NI and RoI, 2001-12

Demand for organic cheese has doubled

Yogurt

Figure 17: Market size of yogurt, NI and RoI, 2001-12

Demand for organic yogurt is growing rapidly

Butter

Figure 18: Market size of butter, NI and RoI, 2001-12

Demand for organic butter is small but growing

Spreads

Figure 19: Market size of spreads, NI and RoI, 2001-12

Margarine

Figure 20: Market size of margarine, NI and RoI, 2001-12

Companies and Products

Key points:

Dairygold Food Ingredients (DFI)

New R&D centre…

…and new acquisitions

Dairygold sells part of business to Glanbia

Kerry Group

Expansion in the US to lower costs

Kerry adds to successful snack range

Success in global organics

Kerry’s €20 million investment program in China

Glanbia

Glanbia expands overseas

More R&D spending

Arla Foods

Multinational expansion

Product development

Change in ownership

Dale Farm

Focusing in product range

Unilever

Heavy advertising expenditure

New website

Channels to Market

Key points:

Multiple stores offer a wider selection of dairy products

Figure 25: Number of grocery multiples outlets, NI and RoI, 2001-05

Symbol groups

Figure 26: Number of symbol group outlets, NI and RoI, 2001-05

Milkmen

Online shopping

The Consumer

Key points:

Figure 27: Proportion of adults who have eaten each dairy product in the last 12 months, NI and RoI, 2006

Cheese in blocks

Key points of cheese in blocks

Number of cheese eaters falling

Figure 28: Proportion of adults who have eaten cheese in blocks in the last 12 months, NI and RoI, 2002-06

Younger generation is less likely to consume cheese in blocks in NI

Figure 29: Proportion of adults who have eaten cheese in blocks in the last 12 months, by gender, age and lifestage, NI, 2005 and 2006

More Empty Nesters have fridges empty from cheese blocks in RoI

Figure 30: Proportion of adults who have eaten cheese in blocks in the last 12 months, by gender, age and lifestage, RoI, 2005 and 2006

NI consumers eat cheese less often

Figure 31: Proportion of adults who have eaten cheese in blocks in the last 12 months, by usage, NI, 2003 and 2006

Those aged 55-64 in socio-economic group AB most likely to consume heaviest in NI

Figure 32: Proportion of adults who are heavy/medium/light users of cheese in blocks, by gender, age, socio-economic group, marital status, working status and presence of children, NI, 2006

RoI maintains same level of heavy users

Figure 33: Proportion of adults who have eaten cheese in blocks in the last 12 months, by usage, RoI, 2003 and 2006

Parents are the most likely to use cheese in blocks on a heavy basis in RoI

Figure 34: Proportion of adults who are heavy/medium/light users of cheese in blocks, by gender, age, socio-economic group, lifestage, working status and presence of children, RoI, 2006

Irish cheddar remains the most popular in NI, but demand is falling

Figure 35: Proportion of adults who have eaten cheese in blocks in the last 12 months, by type, NI, 2003 and 2006

RoI consumers support home cheese

Figure 36: Proportion of adults who have eaten cheese in blocks in the last 12 months, by type, RoI, 2003 and 2006

Key points of cheese in packeted, spread and speciality cheeses

Steady usage in RoI of packeted, spread and speciality cheeses

Figure 37: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, NI and RoI, 2002-06

Fall of younger users of packeted, spread and speciality cheeses in NI

Figure 38: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by gender, age, socio-economic group and lifestage, NI, 2005 and 2006

More women than men in RoI eat packeted, spread and speciality cheeses

Figure 39: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by gender, age, socio-economic group and lifestage, RoI, 2005 and 2006

More light users in NI

Figure 40: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by usage, NI, 2003 and 2006

Half of households with children are light users in NI

Figure 41: Proportion of adults who are heavy/medium/light users of packeted, spread and speciality cheeses, by gender, age, socio-economic group, lifestage and presence of children, NI, 2006

RoI uses packeted, spread and speciality cheeses more often than NI

Figure 42: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by usage, RoI, 2003 and 2006

Socio-economic groups D and E are heavy users of packeted, spread and speciality cheeses

Figure 43: Proportion of adults who are heavy/medium/light users of packeted, spread and speciality cheeses, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2006

Slices suffer in NI

Figure 44: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by type, NI, 2003 and 2006

Small rise in usage of cheese triangles

Figure 45: Proportion of adults who have eaten packeted, spread and speciality cheeses in the last 12 months, by type, RoI, 2003 and 2006

Butter is on the rise

Key points of butter

Figure 46: Proportion of adults who have eaten butter in the last 12 months, NI and RoI, 2002-06

High percentage of younger consumers eat butter whereas the older age group cuts back in NI

Figure 47: Proportion of adults who have eaten butter in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, NI, 2005 and 2006

Growth in older consumers’ use of butter in RoI

Figure 48: Proportion of adults who have eaten butter in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2005 and 2006

Move away from heavy usage in NI

Figure 49: Proportion of adults who have eaten butter in the last 12 months, by usage, NI, 2003 and 2006

Primary School Parents are most likely to eat butter on a heavy basis in NI

Figure 50: Proportion of adults who are heavy/medium/light users of butter, by gender, age, socio-economic group, lifestage, working status and presence of children, NI, 2006

RoI consumers haven’t changed their usage patterns

Figure 51: Proportion of adults who have eaten butter in the last 12 months, by usage, RoI, 2003 and 2006

Socio-economic groups D and E are most likely to use butter on a heavy basis in RoI

Figure 52: Proportion of adults who are heavy/medium/light users of butter, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2006

Low-fat spreads/dairy spreads

Key points of low-fat spreads/dairy spreads

RoI has more demand compared to NI

Figure 53: Proportion of adults who have eaten low-fat spreads/dairy spreads in the last 12 months, NI and RoI, 2002-06

Younger consumers move away from low-fat spreads/dairy spreads in NI

Figure 54: Proportion of adults who have eaten low-fat spreads/dairy spreads in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, NI, 2005 and 2006

Socio-economic groups E and F move away from low-fat spreads/dairy spreads usage in RoI

Figure 55: Proportion of adults who have eaten low-fat spreads/dairy spreads in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2005 and 2006

Heavy usage increases as health awareness increases in NI

Figure 56: Proportion of adults who have eaten low-fat spreads/dairy spreads in the last 12 months, by usage, NI, 2003 and 2006

Consumers in NI use low-fat spreads/dairy spreads on either a heavy or light basis

Figure 57: Proportion of adults who are heavy/medium/light users of low-fat spreads/dairy spreads, by gender, age, socio-economic group, lifestage and presence of children, NI, 2006

Usage patterns remains stagnant in RoI

Figure 58: Proportion of adults who have eaten low-fat spreads/dairy spreads in the last 12 months, by usage, RoI, 2003 and 2006

Twice as many older consumers use low-fat spreads/dairy spreads on a heavy basis than younger consumers in RoI

Figure 59: Proportion of adults who are heavy/medium/light users of low-fat spreads/dairy spreads, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2006

Yogurt

Key points of yogurt

Similar yogurt consumption in NI and RoI

Figure 60: Proportion of adults who have eaten yogurt in the last 12 months, NI and RoI, 2002-06

Fall in percentage of widowers eating yogurt in NI

Figure 61: Proportion of adults who have eaten yogurt in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, NI, 2005 and 2006

RoI opposite to NI as widowers eat more yogurt

Figure 62: Proportion of adults who have eaten yogurt in the last 12 months, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2005 and 2006

Most NI consumers eat yogurt on a light basis

Figure 63: Proportion of adults who have eaten yogurts in the last 12 months, by usage, NI, 2003 and 2006

Younger consumers are most likely to eat yogurt on a light basis in NI

Figure 64: Proportion of adults who are heavy/medium/light users of yogurt, by gender, age, socio-economic group, lifestage and presence of children, NI, 2006

Usage patterns remains stagnant in RoI

Figure 65: Proportion of adults who have eaten yogurts in the last 12 months, by usage, RoI, 2003 and 2006

More women than men in RoI eat yogurt on a heavy basis

Figure 66: Proportion of adults who are heavy/medium/light users of yogurt, by gender, age, socio-economic group, lifestage and presence of children, RoI, 2006

Future Issues in the Market

Branding of dairy produce

Traceability is the future for health-conscious consumers

Milk could compete with soft drinks

Abstract

Health is the main factor influencing the state of the dairy market. There are many different views on the impact of dairy in a daily diet, with some experts believing that dairy is essential, yet others state that when maintaining a healthy lifestyle, dairy should be one of the first products to go.

As extensive research and media coverage has begun to highlight the damning effects of the ‘fast food’ generation, this has led to an expansion of health-oriented products. The dairy market is no exception as new products include low-fat, low-salt and allergy-free. It is possible that these health issues within the dairy market could lead to a more varied list of dairy products, rather than a bleak future.

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