Shift to value-for-money products puts pressure on brands, says NDC

MILK and dairy products are not very adversely affected in volume terms during times of recession with a reversal to home cooking and more in-home entertaining, the National Dairy Council (NDC) stressed yesterday.

It said the €1.1 billion milk, butter and cheese markets in Ireland grew in value and volume terms in 2008, which was extremely positive, but the key issue was who was benefiting from the growth?

NDC chief executive Helen Brophy said private label growth at multiple and discounter level are having a major impact on market share and value.

The branded share of the market is coming under intense pressure and will continue to do so in 2009.

Ms Brophy, who was speaking at the launch in Dublin of the NDC 2008 review and its plan for 2009, said there is a shift in emphasis in times of recession to value-for-money. This could see increased pressure on some branded and value added sectors.

Branded Irish milk is experiencing accelerating slippage with private label milk now accounting for 32% of the market.

Ms Brophy said the challenge is how to grow the market in times of recession in a way which actively supports local producers. There are opportunities to further develop the market for milk by focusing on the key consumer segments that are moving towards low fat and enriched products. She said the recession has seen Irish consumer sentiment transform in a surprisingly rapid way from a “spend” to a “conserve” mode. They have simply cut back following a litany of crisis.

“This palpable mood change is certain to shape the entire retail environment of 2009. For instance, many consumers are shopping in discounters for the first time,” she said.

Ms Brophy said the NDC last year set clear, ambitious and critically measurable targets to be achieved over a five-year period driven by a new strategic plan.

“The need for a robust and grounded strategy becomes even more evident in times of economic downturn, with the pressures caused by recession. In these times in particular, it is all the more important that the NDC is working as efficiently and as creatively as possible, within the resources that are available,” she said.

NDC chairman Dominic Cronin said these are difficult times for the economy, but current conditions only serve to underline the importance of a vibrant dairy council, which is now well placed to strengthen its role.