Dairy sector ‘shows resilience’ in tough market

THE €1 billion retail dairy sector proved to be resilient last year as the recession forced consumers to tighten their belts on spending.

According to the National Dairy Council annual report and outlook, milk and dairy products succeeded in sustaining or even improving volume sales in 2009 despite a difficult year for the grocery sector.

Milk volumes increased by 1% on 2008, but the sales value were down 4.9%, excluding those through independents and doorsteps.

NDC chief executive Helen Brophy said consumption of milk dairy products remains positive despite the challenging market circumstances.

“Consumers have adjusted their shopping patterns at this point and consumption levels of dairy are forecasted to remain stable in 2010, with a small growth in volume anticipated,” she said.

Ms Brophy said the dairy sector operated in a grocery market last year which was under pressure from retailers in their battle for market share as well as consumers who were searching for value.

“The dairy sector has worked hard and shown its resilience, with the result that consumers continue to enjoy milk and dairy products, while being more discerning about what they choose,” she said.

Ms Brophy said the shock of recession caused many Irish consumers to radically change their shopping patterns at the start of 2009.

According to Nielsen research, the decline in Ireland on spending on fast-moving consumer goods (FMCG) during 2009 was one of the most severe recorded in Europe, she said

“The small increase in consumer confidence in the second half of 2009 gives us a glimmer of optimism,” she said.

NDC chairman Dominic Cronin said despite a turbulent year for the dairy sector, 2009 was a successful one for the council, one in which targets were met and, in many cases, surpassed.

The NDC trademark brings much needed clarity to consumers in the Republic of Ireland about where their milk has been both farmed and processed.

Some 340 packs now carry the mark, including both branded and private-label produce farmed and processed in the Republic of Ireland.

Barry Jones, managing director of Business and Market Research (BMR), described the NDC mark as more than an icon printed on milk or cream cartons. “The mark has an ideal which means something in the hearts of consumers,” he said.

Meanwhile, a new European Union approved three-year campaign to promote nutritional benefits of dairy consumption will be launched in April.

It is being funded here by the EU, the Department of Agriculture, Fisheries and Food and by the industry and aims to increase the consumption of milk and dairy products in specific target groups.

The NDC and its chief executive, Helen Brophy, will be responsible for overall management of the project, which is in partnership with the dairy council’s for Northern Ireland, England and Wales.