Branded cheddar sales have led the way, driven by lower prices due to intense competition.
London, United Kingdom (PRWEB) June 24, 2012
Over the past five years, the Butter & Cheese Production industry has been one of the fastest growing and most dynamic sectors within the dairy industry. The cheese market is highly pervasive, with a 99% penetration rate and increasing per capita consumption and expenditure. Branded Cheddar sales have led the way, driven by lower prices due to intense competition that forced producers to discount to retain market share. The industry was also faced with highly volatile milk and cheese prices, especially over 2007-08, which affected profitability and led to an increase in imported cheese. Butter consumption has also increased over the past five years, but health concerns regarding its saturated fat content remains an impediment to future growth. According to IBISWorld industry analyst Suzannah Rowley, “the industry has also benefited from clever and timely product innovation such as convenient packaging, the addition of functional and healthy ingredients, and a focus on provenance”. In the five years through 2012-13, industry revenue is estimated to grow by an annualised 1.6% to total £3.2 billion, with a 0.6% increase in 2012-13.
Rowley adds, “future prospects for the industry are bright”. Over the five years through 2017-18, industry revenue is expected to continue to increase. The slow economic recovery over the next few years is expected to stifle growth for the industry as consumers rein in spending and trade down food purchases in order to save money. However, the forecast stability in commodity prices and continued product innovation will support industry growth in the longer term.
The Butter & Cheese Production industry is dominated by dairy farmer cooperatives, both domestic and international, with private label brands accounting for 18% of cheese and 16% of butter retail sales. Producers have been attempting to increase the share of branded products within their portfolios as they offer higher margins and foster a sense of loyalty among consumers. The top four players are estimated to account for about 50% of the industry which gives the industry a medium level of market share concentration. Major companies include Dairy Crest, Arla Foods and Lactalis McLelland.
For more information on the Butter & Cheese Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes establishments engaged in the manufacture of butter, cheese and curd. It excludes the manufacture of non-dairy cheese substitutes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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