Report: New Profit Opportunities in Dairy to 2008: Industry insights and NPD trends TOC

Executive Summary 19

An overview of the dairy industry in Europe and America 19
The dairy market in Belgium 19
The dairy market in Czech Republic 20
The dairy market in France 21
The dairy market in Germany 21
The dairy market in Hungary 22
The dairy market in Italy 22
The dairy market in Poland 23
The dairy market in Spain 23
The dairy market in the UK 24
The dairy market in the US 24

Chapter 1 Report Introduction 27

The aim of this report 27
Chapter structure 28

Chapter 2 An Overview of the Dairy

Industries in Europe and America 31
Summary 31
Market overview 31
Belgium dairy market future forecast to 2008 32
Czech Republic dairy market future forecast to 2008 32
France dairy market future forecast to 2008 33
Germany dairy market future forecast to 2008 33
Hungary dairy market future forecast to 2008 34
Italy dairy market future forecast to 2008 34
Poland dairy market future forecast to 2008 34
Spain dairy market future forecast to 2008 35
UK dairy market future forecast to 2008 35
U.S. dairy market future forecast to 2008 36

Chapter 3 The Dairy Market in Belgium 39

Summary 39
Milk 39
Steady, stable growth to continue 39
Market value 40
A mature market 40
Market volume 40
Fats and spreads 41
Margarine accounts for more than half of sales 41
Market value 41
Market volume 41
Cheese 42
Popularity of hard cheese predicted to grow 42
Market value 42
Market volume 43
Chilled desserts 43
High growth in past five years 43
Market value 43
Belgian consumers ate 16% of the total chilled desserts consumed in the UK
in 2003 44
Market volume 44
Yoghurt 44
More valuable market than chilled desserts 44
Market value 45
High growth potential for healthy, drinking yoghurts 45
Market volume 45
Distribution: supermarkets/hypermarkets dominate 46
New product development trends 47
Major players: Unilever leads in margarine sector 49
Major brands 49
Cheese 49
Yoghurt 50
Milk 50
Campina Melkunie 51
Chilled desserts 53
Fats and spreads 54

Chapter 4 The Dairy Market in the Czech Republic 56 Summary 56 Market overview 56 Milk 57 The increasing popularity of UHT milk over fresh milk has created a value gap 57 Market value 57 76% growth expected over next five years 58 Market volume 59 Fats and spreads 59 Decline in butter category value spur growth of low fat spreads market 59 Market value 59 Market volume 60 Cheese 60 Soft cheese to be the fastest growing segment over the next five years 60 Market value 61 Market volume 62 Yoghurt 62 Massive growth in healthy dairy categories 62 Market value 62 Market volume 63 Ethnocentrism and consumer evaluations of Czech produced yoghurts -- a study 63 Distribution: independent, traditional food stores remain vital to dairy market 65 New product development trends 66 Major players: Unilever and Groupe Danone hold significant shares 67 Cheese 68 Yoghurt 68 Milk 69 Nutricia 69 Fats and spreads 70

Chapter 5 The Dairy Market in France 72

Summary 72
Market overview 72
Milk 73
UHT milk dominates the market 73
Market value 73
Consumers seek new, value-added products 73
Market volume 74
Fats and spreads 74
Butter is the popular choice for French consumers 74
Market value 75
Market value 75
Cheese 75
Soft and hard natural cheeses are the fastest growing and most profitable 75
Market value 76
Market volume 77
Chilled desserts 77
Market value 78
Volume lags behind value growth 78
Market volume 78
Yoghurt 78
Standard yoghurt value to decline 78
Market value 79
Market volume 79
Distribution: supermarkets and hypermarkets lead 79
New product development trends 80
Major players 82
Cheese 83
Yoghurt 83
Milk 83
Chilled desserts 84
Fats and spreads 84

Chapter 6 The Dairy Market in Germany 88

Summary 88
Market overview 88
Milk 89
The advanced maturity of the German milk market 89
Market value 89
Market volume 90
Fats and spreads 90
Market value 91
Market volume 91
Cheese 91
Veined cheese experiences the highest growth 91
Market value 92
Growth of 10% expected over next five years 92
Market volume 92
Chilled desserts 93
Market value 93
Growth in a fluctuating market 93
Market volume 93
Yoghurt 94
Drinking yoghurt value increasing 94
Market value 94
Market volume 95
Distribution: discounters play a significant role 95
New product development trends 96
Major players 97
Cheese 98
Yoghurt 98
Milk 99
Chilled desserts 99
Fats and spreads 100

Chapter 7 The Dairy Market in Hungary 102

Summary 102
Market overview 102
Milk 103
Fresh milk continues to be the most popular variety 103
Market value 103
Powdered milk category growing the fastest 104
Market volume 104
Fats and spreads 105
Growth rates are expected to rise in all fats and spreads segments 105
Market value 106
Market volume 106
Cheese 106
Semi-hard cheese is the fastest growing sub-category 106
Market value 107
Market volume 108
Yoghurt 108
Slow-down in yoghurt sales expected over next five years 108
Market value 108
Market volume 109
Distribution: segmented dairy distributors 109
New product development trends 110
Major players 111
Cheese 112
Yoghurt 112
Milk 113
Chilled desserts 113
Fats and spreads 114

Chapter 8 The Dairy Market in Italy 116

Summary 116
Market overview 116
Milk 117
The fresh milk market will continue its strong expansion 117
Market value 117
Market volume 117
Fats and spreads 118
The fats and spreads market makes up a comparatively small part of the
Italian dairy industry 118
Market value 119
Market volume 119
Cheese 119
DOP cheeses 119
Unsurprisingly massive market dominated by hard, natural cheese 120
Market value 121
Market volume 122
Chilled desserts 122
Growth to continue but not at same high rate 122
Market value 123
Market volume 123
Yoghurt 123
40% value increase expected by 2008 123
Market value 124
Market volume 124
Distribution: independent, traditional grocers are second largest dairy
distribution outlet 124
New product development trends 125
Major players: private label dominates the natural cheese and butter
categories 126
Cheese 127
Yoghurt 128
Milk 128
Chilled desserts 129
Fats and spreads 129
Parmalat -- the dairy market leader 130

Chapter 9 The Dairy Market in Poland 134

Summary 134
Market overview 134
Milk 134
Growth expected to increase 134
Market value 135
Market volume 136
Fat and spreads 136
Margarine has a higher market volume than butter 136
Market value 137
Market volume 137
Cheese 137
Cheese is the biggest sector in the Polish dairy market 138
Market value 138
Market volume 139
Yoghurt 140
Relatively immature market 140
Market value 140
Market volume 140
Distribution: supermarkets and hypermarkets account for less than 20% of dairy sales 141
New product development trends 142
Major players 144
Cheese 144
Yoghurt 145
Milk 145
Fats and spreads 146

Chapter 10 The Dairy Market in Spain 148

Summary 148
Market overview 148
Milk 149
Only flavoured UHT and powdered milk demonstrated any substantial growth in the past five years 149
Market value 149
Market volume 149
Cheese 150
Hard cheese will continue to hold its top spot 150
Market value 150
Market volume 150
Fats and spreads 151
Butter experiencing a phenomenal value increase 151
Market value 152
Market volume 152
Chilled desserts 152
Market value 152
Market volume 153
Yoghurt 153
Growth of over a third since 1998 153
Market value 154
Market volume 154
Distribution: not unlike other western European markets 154
New product development trends 155
Major players 156
Cheese 157
Yoghurt 158
Milk 158
Chilled desserts 158
Fats and spreads 159

Chapter 11 The Dairy Market in the UK 162

Summary 162
Market overview 162
Milk 163
Value growth predicted despite declines in recent years 164
Market value 164
Market volume 165
Fats and spreads 165
Unusually small yellow fats market in the UK 165
Market value 166
Relatively stagnant values and volumes 166
Market volume 166
Calvia -- Matthews Foods 167
Cheese 167
Non-spreadable, processed cheese is the least popular sub-segment 168
Market value 168
Market volume 169
Chilled desserts 170
Most innovative segment in the UK dairy market 170
Market value 170
Market volume 170
Yoghurt 171
Drinking yoghurt segment will grow but remain a shadow of the standard yoghurt segment 172
Market value 172
Market volume 173
Distribution: decline of the traditional, independent grocer continues 173
New product development trends 174
Major players 176
Cheese 176
Yoghurt 177
Milk 177
Chilled desserts 178
Fats and spreads 178

Chapter 12 The Dairy Market in the United

States 182
Summary 182
Market overview 182
Milk 183
Growth is forecast to accelerate over next five years 184
Market value 184
Market volume 185
Fats and spreads 185
Slowest growing sector in the overall U.S. dairy market 185
Market value 186
Market volume 186
Cheese 187
Processed cheese to decrease in popularity with U.S. consumers 187
Market value 187
Market volume 188
Chilled desserts 189
Market value 189
Market volume 190
Yoghurt 190
High growth in drinking yoghurt market 190
Market value 190
Market volume 191
Distribution: discounters account for 15% of dairy sales 191
New product development trends 192
Major players 194
Cheese 195
Yoghurt 195
Milk 196
Chilled desserts 196
Fats and spreads 196

hapter 13 Dairy Industry Opinion Survey 200

Summary 200
Introduction 200
Breakdown of survey respondents by country 200
How valuable is the dairy market compared to the rest of the food and drinks industry? 201
What are the influential factors impacting the dairy industry at present? 202
Rating the innovation of the dairy market in the respondents countries 203
Where is the most innovative dairy market? 204
Conclusions 205

Chapter 14 Appendix 208

Index 208

List of Tables

Table 2.1: Belgium dairy market future forecast to 2008, market value, ? m 32
Table 2.2: Czech Republic dairy market future forecast to 2008, market values, ? m 32
Table 2.3: France dairy market future forecast to 2008, market values, ? m 33
Table 2.4: Germany dairy market future forecast to 2008, market values, ? m 33
Table 2.5: Hungary dairy market future forecast to 2008, market values, ? m 34
Table 2.6: Italy dairy market future forecast to 2008, market values, ? m 34
Table 2.7: Poland dairy market future forecast to 2008, market values, ? m 35
Table 2.8: Spain dairy market future forecast to 2008, market values, ? m 35
Table 2.9: UK dairy market future forecast to 2008, market values, ? m 36
Table 2.10: U.S. dairy market future forecast to 2008, market values, ? m 36
Table 3.11: Belgium milk market value, ? m, 1998--2003 40
Table 3.12: Belgium milk market volume, litres m, 1998--2003 40
Table 3.13: Market value and volume of fats and spreads, 1998--2003 41
Table 3.14: Belgium cheese market value, (? m), 1998--2003 42
Table 3.15: Belgium cheese market volume, kg m, 1998--2003 43
Table 3.16: Belgium chilled desserts market value, ? m, 1998--2003 43
Table 3.17: Belgium chilled desserts market volume, kg m, 1998--2003 44
Table 3.18: Belgium yoghurt sales value, ? m, 1998--2003 45
Table 3.19: Belgium yoghurt sales volume, kg m, 1998--2003 45
Table 3.20: Distribution outlets for dairy products in Belgium, 2002--2003 46
Table 3.21: Belgium dairy industry company leaders, percentage of market shares, 2002--2003 49
Table 3.22: Belgium cheese industry brand leaders, percentage of market share, 2002--2003 50
Table 3.23: Belgium yoghurt industry brand leaders, percentage of market share, 2002--2003 50
Table 3.24: Belgium milk industry brand leaders, percentage of market share, 2002--2003 51
Table 3.25: Campina average quotations, price per kilogram 52
Table 3.26: Key statistics of Campina Melkunie 52
Table 3.27: Belgium chilled desserts industry brand leaders, percentage of market share, 2002--200354
Table 3.28: Belgium fats and spreads industry brand leaders, percentage of market share, 2002--2003 54
Table 4.29: Czech Republic milk market value, CZK m, 1998--2003 58
Table 4.30: Czech Republic milk market value, ? m, 1998--2003 58
Table 4.31: Czech Republic milk market volume, litres m, 1998--2003 59
Table 4.32: Market value and volume of fats and spreads, 1998--2003 59
Table 4.33: Czech Republic cheese market value, CZK m, 1998--2003 61
Table 4.34: Czech Republic cheese market value, ? m, 1998--2003 61
Table 4.35: Czech Republic cheese market volume, kg m, 1998--2003 62
Table 4.36: Czech Republic yoghurt sales value, (CZK m), 1998--2003 62
Table 4.37: Czech Republic yoghurt sales value, (? m), 1998--2003 63
Table 4.38: Czech Republic yoghurt sales volume, kg m, 1998--2003 63
Table 4.39: Consumer preferred flavours, 2002 64
Table 4.40: Consumer preferred brands, 2002 64
Table 4.41: Distribution outlets for dairy products in Czech Republic, 2002--2003 65
Table 4.42: Czech Republic dairy industry company leaders, percentage market share, 2002--2003 67
Table 4.43: Czech Republic cheese industry brand leaders, percentage market share, 2002--2003 68
Table 4.44: Czech Republic yoghurt industry brand leaders, percentage market share, 2002--2003 68
Table 4.45: Czech Republic milk industry brand leaders, percentage market share, 2002--2003 69
Table 4.46: Czech Republic fats and spreads industry brand leaders, percentage of market share, 2002--2003 70
Table 5.47: France milk market value, (? m), 1998--2003 73
Table 5.48: France milk market volume, litres m, 1998--2003 74
Table 5.49: France fats and spreads sales market value and volume, 1998--2003 75
Table 5.50: France cheese market value, (? m), 1998--2003 76
Table 5.51: France cheese market volume, kg m, 1998--2003 77
Table 5.52: France chilled desserts market value, (? m), 1998--2003 78
Table 5.53: France chilled desserts market volume, kg m, 1998--2003 78
Table 5.54: France yoghurt sales value, (? m), 1998--2003 79
Table 5.55: France yoghurt sales volume, kg m, 1998--2003 79
Table 5.56: Distribution outlets for dairy products in France, 2002--2003 80
Table 5.57: France dairy industry company leaders, percentage of market shares, 2002--2003 82
Table 5.58: France cheese industry brand leaders, percentage of market share, 2002--2003 83
Table 5.59: France yoghurt industry brand leaders, percentage of market share, 2002--2003 83
Table 5.60: France milk industry brand leaders, percentage of market share, 2002--2003 84
Table 5.61: France chilled desserts industry brand leaders, percentage of market share, 2002--2003 84
Table 5.62: France fats and spreads industry brand leaders, percentage of market share, 2002--200385
Table 6.63: Germany milk market value, (? m), 1998--2003 89
Table 6.64: Germany milk market volume, litres m, 1998--2003 90
Table 6.65: German fats and spreads sales market value and volume, 1998--2003 91
Table 6.66: Germany cheese market value, (? m), 1998--2003 92
Table 6.67: Germany cheese market volume, kg m, 1998--2003 92
Table 6.68: Germany chilled desserts market value, (? m), 1998--2003 93
Table 6.69: Germany chilled desserts market volume, kg m, 1998--2003 93
Table 6.70: Germany yoghurt sales value, (? m), 1998--2003 94
Table 6.71: Germany yoghurt sales volume, kg m, 1998--2003 95
Table 6.72: Distribution outlets for dairy products in Germany, 2002--2003 95
Table 6.73: Germany dairy industry company leaders, percentage of market shares, 2002--2003 98
Table 6.74: Germany cheese industry brand leaders, percentage of market share, 2002--2003 98
Table 6.75: Germany industry brand leaders, percentage of market share, 2002--2003 99
Table 6.76: Germany milk industry brand leaders, percentage of market share, 2002--2003 99
Table 6.77: Germany chilled desserts industry brand leaders, percentage of market share, 2002--2003 100
Table 6.78: Germany fats and spreads industry brand leaders, percentage of market share, 2002--2003 100
Table 7.79: Hungary milk market value, HUF m, 1998--2003 103
Table 7.80: Hungary milk market value, ? m, 1998--2003 103
Table 7.81: Hungary milk market volume, litres m, 1998--2003 104
Table 7.82: Hungarian fats and spreads sales market value and volume, 1998--2003 106
Table 7.83: Hungary cheese market value, (HUF m), 1998--2003 107
Table 7.84: Hungary cheese market value, (? m), 1998--2003 107
Table 7.85: Hungary cheese market volume, kg m, 1998--2003 108
Table 7.86: Hungary yoghurt sales value, (HUF m), 1998--2003 108
Table 7.87: Hungary yoghurt sales value, (?m), 1998--2003 109
Table 7.88: Hungary yoghurt sales volume, kg m, 1998--2003 109
Table 7.89: Distribution outlets for dairy products in Hungary , 2002--2003 110
Table 7.90: Hungary dairy industry company leaders, percentage of market share, 2002--2003 112
Table 7.91: Hungary cheese industry brand leaders, percentage of market share, 2002--2003 112
Table 7.92: Hungary yoghurt industry brand leaders, percentage of market share, 2002--2003 113
Table 7.93: Hungary milk industry brand leaders, percentage of market share, 2002--2003 113
Table 7.94: Hungary chilled desserts industry brand leaders, percentage of market share, 2002--2003 113
Table 7.95: Hungary fats and spreads industry brand leaders, percentage of market share, 2002--2003 114
Table 8.96: Italy milk market value, (?m), 1998--2003 117
Table 8.97: Italy milk market volume, litres m, 1998--2003 118
Table 8.98: Italy fats and spreads sales market value and volume, 1998--2003 119
Table 8.99: Production of Italian DOP cheeses, 2002 120
Table 8.100: Italy cheese market value, (? m), 1998--2003 121
Table 8.101: Italy cheese market volume, kg m, 1998--2003 122
Table 8.102: Italy chilled desserts market value, (? m), 1998--2003 123
Table 8.103: Italy chilled desserts market volume, kg m, 1998--2003 123
Table 8.104: Italy yoghurt sales value, ? m, 1998--2003 124
Table 8.105: Italy yoghurt sales volume, kg m, 1998--2003 124
Table 8.106: Distribution outlets for dairy products in Italy, 2002--2003 125
Table 8.107: Italy dairy industry company leaders, percentage of market share, 2002--2003 127
Table 8.108: Italy cheese industry brand leaders, percentage of market share, 2002--2003 127
Table 8.109: Italy yoghurt industry brand leaders, percentage of market share, 2002--2003 128
Table 8.110: Italy milk industry brand leaders, percentage of market share, 2002--2003 128
Table 8.111: Italy chilled desserts industry brand leaders, percentage of market share, 2002--2003 129
Table 8.112: Italy fats and spreads industry brand leaders, percentage of market share, 2002--2003129
Table 9.113: Poland milk market value, (PLZm), 1998--2003 135
Table 9.114: Poland milk market value, (?m), 1998--2003 135
Table 9.115: Poland milk market volume, litres m, 1998--2003 136
Table 9.116: Poland fats and spreads sales market value and volume, 1998--2003 137
Table 9.117: Poland cheese market value, (PLZm), 1998--2003 138
Table 9.118: Poland cheese market value, (? m), 1998--2003 139
Table 9.119: Poland cheese market volume, kg m, 1998--2003 139
Table 9.120: Poland yoghurt sales value, (PLZ m), 1998--2003 140
Table 9.121: Poland yoghurt sales value, (? m), 1998--2003 140
Table 9.122: Poland yoghurt sales volume, kg m, 1998--2003 141
Table 9.123: Distribution outlets for dairy products in Poland, 2002--2003 141
Table 9.124: Poland dairy industry company leaders, percentage of market share, 2002--2003 144
Table 9.125: Poland cheese industry brand leaders, percentage of market share, 2002--2003 145
Table 9.126: Poland yoghurt industry brand leaders, percentage of market share, 2002--2003 145
Table 9.127: Poland milk industry brand leaders, percentage of market share, 2002--2003 146
Table 9.128: Poland fats and spreads industry brand leaders, percentage of market share, 2002--2003 146
Table 10.129: Spain milk market value, (? m), 1998--2003 149
Table 10.130: Spain milk market volume, litres, 1998--2003 149
Table 10.131: Spain cheese market value, (? m), 1998--2003 150
Table 10.132: Spain cheese market volume, kg m, 1998--2003 151
Table 10.133: Spain fats and spreads sales market value and volume, 1998--2003 152
Table 10.134: Spain chilled desserts sales value, (? m), 1998--2003 153
Table 10.135: Spain chilled desserts sales volume, kg m, 1998--2003 153
Table 10.136: Spain yoghurt sales value, (? m), 1998--2003 154
Table 10.137: Spain yoghurt sales volume, kg m, 1998--2003 154
Table 10.138: Distribution outlets for dairy products in Spain, 2002--2003 155
Table 10.139: Spain dairy industry company leaders, percentage of market shares, 2002--2003 157
Table 10.140: Spain cheese industry brand leaders, percentage of market share, 2002--2003 157
Table 10.141: Spain yoghurt industry brand leaders, percentage of market share, 2002--2003 158
Table 10.142: Spain milk industry brand leaders, percentage of market share, 2002--2003 158
Table 10.143: Spain chilled desserts industry brand leaders, percentage of market share, 2002--2003 159
Table 10.144: Spain fats and spreads industry brand leaders, percentage of market share, 2002--2003 159
Table 11.145: UK milk market value, (｣ m), 1998--2003 164
Table 11.146: UK milk market value, (? m), 1998--2003 164
Table 11.147: UK milk market volume, 1998--2003 165
Table 11.148: UK fats and spreads sales market value and volume, 1998--2003 166
Table 11.149: UK cheese market value, (｣ m), 1998--2003 168
Table 11.150: UK cheese market value, (? m), 1998--2003 169
Table 11.151: UK cheese market volume, kg m, 1998--2003 169
Table 11.152: UK chilled desserts market value, (｣ m), 1998--2003 170
Table 11.153: UK chilled desserts market value, (? m), 1998--2003 170
Table 11.154: UK chilled desserts market volume, kg m, 1998--2003 171
Table 11.155: UK yoghurt sales value, (｣ m), 1998--2003 172
Table 11.156: UK yoghurt sales value, (? m), 1998--2003 172
Table 11.157: UK yoghurt sales volume, (kg m), 1998--2003 173
Table 11.158: Distribution outlets for dairy products in UK , 2002--2003 173
Table 11.159: UK dairy industry company leaders, percentage of market shares, 2002--2003 176
Table 11.160: UK cheese industry brand leaders, percentage of market share, 2002--2003 177
Table 11.161: UK yoghurt industry brand leaders, percentage of market share, 2002--2003 177
Table 11.162: UK milk industry brand leaders, percentage of market share, 2002--2003 178
Table 11.163: UK chilled desserts industry brand leaders, percentage of market share, 2002--2003 178
Table 11.164: UK fats and spreads industry brand leaders, percentage of market share, 2002--2003179
Table 12.165: US milk market value, (US$ m), 1998--2003 184
Table 12.166: US milk market value, (? m), 1998--2003 185
Table 12.167: US milk market volume, (litres m), 1998--2003 185
Table 12.168: U.S. fats and spreads sales market value and volume, 1998--2003 186
Table 12.169: US cheese market value, (US$ m), 1998--2003 188
Table 12.170: US cheese market value, (? m), 1998--2003 188
Table 12.171: US cheese market volume, kg m, 1998--2003 189
Table 12.172: US chilled desserts market value, (US$ m), 1998--2003 189
Table 12.173: US chilled desserts market value, (? m), 1998--2003 189
Table 12.174: US chilled desserts market volume, kg m, 1998--2003 190
Table 12.175: US yoghurt sales value, (US$ m), 1998--2003 190
Table 12.176: US yoghurt sales value, (? m), 1998--2003 191
Table 12.177: U.S. yoghurt sales volume, kg m, 1998--2003 191
Table 12.178: Distribution outlets for dairy products in U.S. , 2002--2003 192
Table 12.179: U.S. dairy industry company leaders, percentage of market shares, 2002--2003 194
Table 12.180: U.S. cheese industry brand leaders, percentage of market share, 2002--2003 195
Table 12.181: U.S. yoghurt industry brand leaders, percentage of market share, 2002--2003 195
Table 12.182: U.S. milk industry brand leaders, percentage of market share, 2002--2003 196
Table 12.183: U.S. chilled desserts industry brand leaders, percentage of market share, 2002--2003 196
Table 12.184: U.S. fats and spreads industry brand leaders, percentage of market share, 2002--2003 197

New Profit Opportunities in Dairy to 2008: Industry insights and NPD trends

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