Aaron Forde
ANIMAL HEALTH AND MILK QUALITY – A VITAL INGREDIENT DEVELOPING MARKETS AROUND THE WORLD FOR IRISH DAIRY PRODUCTS Irish Dairy Board 2015 JANUARY 2015 SETTING THE SCENE Excellent milk quality and good animal health are not differentiators in international markets – they are a critical requirement. Irish Dairy Board 2015 A KEY RISK TO OUR BUSINESS • BSE, FMD – animal diseases could close our industry down over night • Bovine Tb and brucellosis can exclude us from specific markets • Non-regulated diseases such as Johnes disease, BVD and IBR will undermine the image of Irish dairying around the world A good animal health status is key to trade and open markets but also gives us a competitive edge. 3 UNDERSTANDING TODAY’S CONSUMER • A new, more savvy consumer is emerging • They want to know where their food is coming from • They need to trust the source • Of the emerging 19-33 old consumer group (accounting for 1/4 of the global population) almost 2/3 of them actively seek environmentally friendly and ethically produced goods • They communicate with their friends and peers through social media • They act as brand ambassadors for the brands they like, and are quick to discredit the brands they dislike / don’t trust Irish Dairy Board 2015 4 SOME CONSUMER QUERIES ON ANIMAL HEALTH Irish Dairy Board 2015 OUR CUSTOMERS MUST ENSURE PRODUCTS MEET THESE EVOLVING CONSUMER NEEDS • Customers are now auditing against the highest standards in sustainability, ethics and animal health and welfare • They require full transparency throughout the entire supply chain For example: • Unilever uses software Muddy Boots which has up to 550 on-farm checks • Ahold, Walmart and Mars all use The Sustainability Consortium with 3 of the top 4 dairy hotspots relating to animal welfare Irish Dairy Board 2015 6 WE ARE OPERATING IN AN INCREASINGLY COMPETITIVE GLOBAL MARKETPLACE • The Irish dairy industry depends on the 85% of produce exported • Industry stakeholders in our established markets are seeking to undermine imports e.g. absence of a Red Tractor scheme governing Irish cheese imports into the UK • Our competitors are trying to steal our grass based comparative advantage position • Social media is being used to interrogate our quality and animal health credentials • Meeting quality standards is not enough – we must guard against complacency Quality is ‘a given’. HOW ARE WE PROMOTING OUR COMPETIVE EDGE? We have built our business on the premiumisation of Irish dairy products. Critical to this: a premium quality product is only possible with a premium quality raw material. Irish Dairy Board 2015 EXPORTING TO OVER 100 COUNTRIES WORLDWIDE GLOBAL TEAM Irish Dairy Board 2015 9 WE ARE A GLOBAL BUSINESS NORWAY DENMARK ROMANIA SWEDEN POLAND CANADA USA BERMUDA DOMINICAN REP. BAHAMAS BARBADOS MEXICO TRINIDAD & TOBAGO COSTA RICA VENEZUELA EL SALVADOR PERU CHILE Irish Dairy Board 2015 RUSSIAN FEDERATION UK GERMANY HUNGARY NETHERLANDS BELGIUM CZECH REP. SWITZERLAND AUSTRIA SLOVAKIA JAPAN PORTUGAL FRANCE GREECE KOREA REP. OF CYPRUS ITALY GIBRALTAR SPAIN TUNISIA MALTA TURKEY IRAQ MOROCCO ALGERIA KUWAIT BAHRAIN IRAN CHINA TAIWAN MAURITANIA EGYPT QATAR AFGHANISTAN MALI HONG KONG SENEGAL LIBERIA CHAD SAUDI ARABIA UAE PAKISTAN GAMBIA TOGO NIGERIA JORDAN ISRAEL INDIA VIETNAM IVORY COAST SRI LANKA GUINEA CENTRAL AFRICAN REP. THAILAND EQUATORIAL GUINEA KENYA MALDIVES PHILIPPINES MALAYSIA BURKINA FASO GABON TANZANIA SEYCHELLES SINGAPORE INDONESIA ANGOLA MALAWI CONGO MOZAMBIQUE ZAMBIA MADAGASCAR AUSTRALIA ZIMBABWE MAURITIUS SOUTH AFRICA 10 BRAND & VALUE ADDED INGREDIENTS BUSINESS Irish Dairy Board 2015 11 11 MARKETING IRISH DAIRY PRODUCTS Premiumisation of Irish dairy is key. Bringing the consumer closer to the farmer. Focus on Irish dairy farming’s grass fed message – pure, quality, taste. Bringing USA • Kerrygold is No.1 imported butter • Dubliner Cheese is No. 1 Cheddar • Projected Growth: $112m in 2014, $250m by 2018 Irish Dairy Board 2014 KERRYGOLD US 2015 CAMPAIGN • ‘Delicious Because Nature Said So’ Campaign shot on the Cleary Farm in Bunmahon, Co. Waterford • Focused on Irish dairy farming’s grass fed message – pure, quality, taste • Targeting US consumer who is interested where their food comes from KERRYGOLD GERMAN 2015 CAMPAIGN • No. 1 Butter – 55% market share • Milk/cream from 3,400 farms required to supply Kerrygold butter for the German market each year • Campaign highlights Irish farming’s respect for animals, nature and tradition • Targeting German consumer who is interested in origin and quality of food Irish Dairy Board 2014 MARKETING IRISH DAIRY PRODUCTS Premiumisation of Irish dairy is key. AFRICA • Kerrygold is No. 1 imported butter in South Africa • Top 3 brand position in WMP: Malawi, Angola, DRC and Congo • Team of over 250 own/shared staff in-market CHINA • Recent launch of Kerrygold UHT milk • Chinese liquid milk market estimated to be worth $18bn with annual growth of 10% • Premium segment accounts for 28% of milk volume and 45% of value • 2014 Sales of €100m Kerrygold brand retails at over €660 million annually 14 PROTECTING OUR COMPETITIVE EDGE • Promotion and maintenance of a point of differentiation for Irish dairy products – Grass based production – Focusing on milk quality – Animal health and welfare – Sustainability • SDAS now enables us prove our sustainability credentials and meet the needs our customers who require a robust and sustainable supply chain • Ongoing work with industry bodies to create and maintain this positioning IRISH DAIRY FARMERS ARE FUNDAMENTAL TO THE SUCCESS OF THIS POSITIONING 15 LOOKING FORWARD • A lot has been achieved – lower SCC’s, reduction in prevalence of bovine Tb and eradication of brucellosis • Great work by AHI – including in management of BVD, and Johne’s disease, and on CellCheck programme • But can’t be complacent - we are only as strong as our weakest link - all farmers and co-ops need to operate to the same standards • Complacency is too big a risk for an export orientated sector like dairy AS AN INDUSTRY WE MUST STRIVE TO CONTINUOUSLY IMPROVE OUR ANIMAL HEALTH STATUS AND MILK QUALITY TO CLAIM OUR MARKET LEADERSHIP POSITION Irish Dairy Board 2015 16
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