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Packaged soft cheese faces competition from traditional unpackaged formats
Cheese is represented in Azerbaijan by both local and international players and brands. Soft cheese was a traditional choice for most local consumers, and widely available through modern and traditional grocery channels both in packaged and unpackaged formats.
Independent small grocers remains key distribution channel for cheese
Although modern grocery retailers, including supermarkets, hypermarkets and convenience stores, grew rapidly in Azerbaijan over the review period, traditional grocery retailers, including independent small grocers and other grocery retailers, continued to account for the majority of cheese distribution. These retail outlets are preferred by local consumers due to convenience as they are often located near or in residential areas with short or no queues.
Cheese is expected to mature during the forecast period
Over the forecast period cheese is expected to grow and approach saturation in Azerbaijan. The key drivers of cheese development will be retail network development, improved living conditions of local consumers and increased saturation, bringing new companies, brands and brand extensions to the local market.
Milk-Pro Ltd remains leading player in cheese in 2018
During 2018, Milk-Pro Ltd led cheese, distributing locally its brands Chanax, Sevimli Dad and M-Pro. A wide product portfolio and active marketing supported growth of Milk-Pro Ltd.
Local brands predominate in cheese
During the review period, cheese neared saturation in Azerbaijan, represented by both local and multinational brands. Hard cheese was clearly led by international brands, whereas soft cheese was mainly represented by unpackaged and packaged local brands, named after either the type of cheese or place of origin.
New product launches with new tastes aim to catch consumer interest
There were only limited significant product innovations in Azerbaijan in 2018. Local manufacturer Azfp Co Ltd MMC under its Milla brand offered a chocolate spreadable cheese to consumers.
Health trend and shift towards packaged milk support category sales
In 2018, drinking milk products were still available in packaged and unpackaged formats, however over the review period, the sales share of packaged drinking milk products continued to grow thanks to modern retailing development and local manufacture growth. Being dependent on raw milk fees, state subsidies allowed manufacturers to reduce unit prices.
Growth of modern grocery retailers influences shopping habits
In 2018, traditional grocery retailers, in particular independent small grocers, continued to prevail in sales and distribution of drinking milk products, however during the review period and throughout the year, modern grocery retailers, led by supermarkets significantly grew in Azerbaijan, supported by shifting shopping patterns favouring convenience. Local citizens started to prefer fast developing and widespread modern grocery retailers, such as supermarkets, hypermarkets and convenience stores, due to the wide range of brands and products available, lower unit price due to lower costs of bulk purchases and loyalty schemes available at most modern grocery retailers.
State support for milk industry fuels forecast period growth
The outlook for drinking milk products is expected to be driven by healthy claims and macroeconomic factors. Loose milk sales are expected to remain impacted by legislative boundaries and incentives.
Azfp Co Ltd MMC strengthens leading position in drinking milk products
In 2018, Azfp Co Ltd MMC remained the leading player in drinking milk products owing to its Milla brand, which is present in numerous dairy and ice cream categories. Drinking milk products by Azfp Co Ltd MMC include both flavoured milk products and regular milk.
Local companies control drinking milk products in 2018
Local companies led drinking milk products, thanks to the competitive prices they offer local consumers. Long-standing history and wider availability of local brands gave a favourable perception to these products among local consumers.
New product launches with healthy claims become popular
No significant new product launches were made by the largest companies, operating in Azerbaijan in 2018, due to significant restructuring happening in Atena MMC and Azfp Co Ltd MMC among others. However, numerous new product developments were made by small and medium-sized companies, which worked to gain category niches and increase their sales performance.
Local consumers maintain preference for traditional sour milk products
During 2018, yoghurt and sour milk products grew in Azerbaijan, supported by regained economic stability, the general shift towards packaged formats and improved disposable incomes of local consumers. Traditional sour milk products comprised the major part of yoghurt and sour milk products volume sales, and local manufacturers tended to focus on these products, called ayran, kefir and dovga to local consumers, which appeal to their tastes.
Supermarkets and hypermarkets gain ground
During the review period, independent small grocers continued to lead yoghurt and sour milk products in Azerbaijan, owing to the favourable position of these outlets next to residential areas. Nevertheless, rapid modern retailing development supported faster growth of supermarkets and hypermarkets over the review period.
Over the forecast period the category is expected to grow and reach maturity
Yoghurt and sour milk products is expected to develop further during the forecast period, driven by improved economic conditions, transition from unpackaged to packaged products and growing offering. Development of the modern retail landscape is also expected to support growth of yoghurt and sour milk products increasing sales through supermarkets, hypermarkets and convenience stores.
Azfp Co Ltd MMC maintains lead owing to product launches and advertising
In 2018, Azfp Co Ltd MMC remained the leading player in yoghurt and sour milk products in Azerbaijan, gaining success for its Milla brand, present in numerous categories within yoghurt and sour milk products. The company offered products locally since just before the start of the review period and gained a strong reputation during this period.
Local companies have strong presence in yoghurt and sour milk products in 2018
In 2018, local manufacturers strengthened their sales positions in yoghurt and sour milk in Azerbaijan, outpacing international companies due to the affordability claimed by local representatives. Also, these companies gained stronger positions due to active promotion, presence in the most traditionally popular sour milk products category and better alignment with changes happening in the country amid the changing macroeconomic situation.
New product developments claim cleaner production and natural ingredients
New packaging formats in 2018 included mainly country-style packaging, extensively used by manufacturers to claim natural origins of the products. Atena MMC carried marketing activities including advertisements of its products using the statement “produced from milk of happy cows”.
Other dairy shifts further to packaged formats in 2018
Other dairy in Azerbaijan comprised different products in 2018, including dairy desserts, coffee whiteners, chilled snacks, cream, condensed milk and fromage frais and quark. Other dairy was available in Azerbaijan both in packaged and unpackaged formats, however with the rapid development of modern grocery retailers sales share of packaged other dairy grew over the review period.
Retailing landscape moves further from traditional towards modern
During the review period, traditional grocery retailers, mainly independent small grocers, comprised the largest sales share of other dairy sales in Azerbaijan, since these distribution channels are favourably located adjacent to residential areas, making them more convenient for consumers. However, with rapid increase of modern retail outlets, mainly supermarkets and convenience stores, these channels gained ground on the account of reduced sales through traditional grocery retailers, outpacing small markets, for example, with narrow product offerings.
Forecast period performance of other dairy looks positive
During the forecast period, other dairy is expected to grow, driven by improved purchasing power and living standards of local consumers. Development of modern grocery retailers and growing product variety are expected to support other dairy growth too.
Wimm-Bill-Dann Produkty Pitania OAO remains other dairy leader in 2018
Wimm-Bill-Dann Produkty Pitania OAO led other dairy in 2018, largely thanks to its Chudo brand in Azerbaijan. Success of the company came down to the wide availability of well-known and highly regarded brands through traditional grocery retailers and modern grocery retailers, including supermarkets/hypermarkets.
Multinational and local products differ by national taste and international trends
Well-established other dairy was represented by both local and international players in Azerbaijan at the end of the review period and comprised different products, from emerging chilled and shelf stable dairy desserts, coffee whiteners and chilled snacks, which were introduced to local consumers by mainly international manufacturers, to mature cream, condensed milk and fromage frais and quark, traditionally popular in Azerbaijan over the review period. While incipient growth of international tastes in Azerbaijan was attributed to penetration of global trends, local product sales were driven by the shift from unpackaged to packaged formats.
Local companies are active in new launches offering economy and convenience
With growing consumer awareness about new dairy products available, interest in other dairy also increased. Companies offered different products in order to diversify their portfolios and boost sales.
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The Dairy in Azerbaijan market research report includes:
Analysis of key supply-side and demand trends
Detailed segmentation of international and local products
Historic volumes and values, company and brand market shares
Five year forecasts of market trends and market growth
Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
What is the market size of Dairy in Azerbaijan?
What are the major brands in Azerbaijan?
How has the economic downturn impacted sales performance given its staple food status?
Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
How are volatile farmgate prices for milk impacting retail prices and sales performance?
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Track key industry trends, opportunities and threats
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Packaged food sales grow steadily in Azerbaijan after the macroeconomic recession
Local companies lead due to more competitive prices
Modern grocery retailers support packaged food volume sales
Packaged food to see growth in the forecast period
Sales to Foodservice
Improved macroeconomic situation helps sales to foodservice to grow Local companies lead sales to foodservice Ice cream and frozen desserts foodservice sales grow fastest in 2018
Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018 Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018 Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023 Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 5 Sales of Packaged Food by Category: Volume 2013-2018 Table 6 Sales of Packaged Food by Category: Value 2013-2018 Table 7 Sales of Packaged Food by Category: % Volume Growth 2013-2018 Table 8 Sales of Packaged Food by Category: % Value Growth 2013-2018 Table 9 GBO Company Shares of Packaged Food: % Value 2014-2018 Table 10 NBO Company Shares of Packaged Food: % Value 2014-2018 Table 11 LBN Brand Shares of Packaged Food: % Value 2015-2018 Table 12 Distribution of Packaged Food by Format: % Value 2013-2018 Table 13 Distribution of Packaged Food by Format and Category: % Value 2018 Table 14 Forecast Sales of Packaged Food by Category: Volume 2018-2023 Table 15 Forecast Sales of Packaged Food by Category: Value 2018-2023 Table 16 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023 Table 17 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023
Summary 1 Research Sources
Why buy this report?
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.