Cheese has outperformed most packaged food categories since the devaluation of the Egyptian pound in late 2016 and this is due to the product’s status as an essential source of protein in the majority of Egyptian homes. Unprocessed cheese has continued to attract consumers despite dramatic price increases as it has continued to represent an affordable source of essential nutrition, with soft cheese registering positive volume growth in 2019, a demonstration of the stability and resilience of the category.
The strength of local cheese production has supported the category’s relatively favourable performance in recent years as the devaluation of the pound has made it difficult for imported brands to compete on price. With locally manufactured products far more affordable, increases in local production volumes have been achieved, enabling local products to capture demand which would otherwise have been accounted for imported products.
The difficulties faced by all imported products in the wake of the devaluation of the Egyptian pound earlier in the review period has placed massive pressure on demand for hard cheese, a category in which the majority of products are imported. This has led to demand narrowing to an affluent, urban-dwelling consumer base, with hard cheese already widely considered a niche category of expensive products by the end of review period.
Obour land Co remains the leading player in soft cheese despite its slender lead over second-placed Arabian Food Industry Co slipping as it lost value share over the course of the year. The company’s Obour land brand remains the leading name in soft cheese soft cheese by virtue of its wide variety of flavours and pack sizes, which range from 80g to 500g.
Riyada’s hard cheese brand Cheesa is the leading name in both packaged and unpackaged hard cheese and this is mainly due to the its affordable prices and wide availability. Cheese is usually presented prominently in the chiller cabinets of supermarkets and neighbourhood grocery stores throughout Egypt.
Best Cheese Co for Dairy Products SAE leads sales in processed spreadable cheese with its Président brand. Président has been able to generate high levels of consumer trust in its quality and it is the first choice of many parents when looking for cheese to feed their families.
Shelf stable milk witnessed rising volume sales in 2019 in a continuation of the positive sales growth trends that were witnessed in the category throughout the review period. The resilience of shelf stable milk to the sales declines that have plagued the vast majority of packaged food categories since the devaluation of the Egyptian pound in late 2016 has been due mainly to its status as an essential staple among a very wide consumer base including rural and urban consumers of all income levels.
With demand for drinking milk products based mainly on low price and with sales limited mainly to shelf stable milk, brand loyalty is relatively low in the category. In general, most consumers prefer to purchase the cheapest brand available and the specific identity of the brand and the origins of the product are of secondary importance.
The forecast period is expected to see rising volume sales of cow’s milk, with fresh milk slated for a particularly strong performance. This is a reflection of the status of cow’s milk as a fundamental source of nutrition in the majority of Egyptian households.
Juhayna Food Industries remains the leading player in drinking milk products. The company’s Bekhero brand remains among the most famous Egyptian packaged food brands of all, offering a wide variety of products with a reputation for being healthy and safe.
France-based multinational dairy producer Groupe Lactalis recently completed acquired 100% of Egyptian company Greenland Group of Food Industries, a move which will substantially strengthen its position in drinking milk products in Egypt during the forecast period. This will position Groupe Lactalis as one of the few successful international players in the category, joining Nestlé Egypt SAE, the leader in powder milk through its Nido range of products.
Almarai Co Ltd, the GBO of the Almarai and Beyti brands, was among the category’s best performers in 2019 as more consumers placed their trust in the quality of its products. In addition, the company introduced new 750ml packs for its Almarai flavoured milk brand during the year, attracting children with the unique shape of these new packs.
Sales of yoghurt continued to increase in volume and value terms in 2019 and this was mainly due to the essential status of plain yoghurt in the diets of the majority of Egyptians. Plain yoghurt dominates overall sales of yoghurt in Egypt and this has ensured that the category has been able to withstand the pressures that have been placed on most packaged food categories since the devaluation of the Egyptian pound in late 2016.
Recent years have seen Egypt’s leading yoghurt brands engage in continuous efforts to support sales growth through the use of price promotions. This has ensured that yoghurt remains reasonably affordable for the majority of consumers at a time of rapidly rising prices in the wake of the 2016 currency devaluation.
The forecast period is expected to see the leading players in yoghurt come under increasing pressure from rising fuel and electricity prices, which is likely to place pressure on their margins. At the same time, the requirement to keep unit prices as low as possible in order to avoid alienating consumers and ensure consistent demand is likely to present major challenges to all companies operating in the category.
Juhayna Food Industries remains the leading name in yoghurt and sour milk products, offering a wide range of products across various categories. The company has long been known for its innovation and regular launches of new products and 2019 saw the introduction of three new flavours in sour milk products including cinnamon.
Almarai has long focused on flavoured yoghurt to generate sales, with the resulting that the company is the category’s leading GBO. 2019 saw Almarai introduce new fruit flavoured yoghurt containing real chunks of fruit under the Almarai Treats brand.
2019 saw Danone assume the leading position in plain yoghurt, which it had previously lost to Best Cheese Co for Dairy Products, the local owner of the Nestlé brand in plain yoghurt, in 2017. During 2019, Danone developed new brighter packaging for its plain yoghurt, while the recipe for the product itself was modified to make it richer in taste and thicker in texture.
2019 saw volume sales decline in all other dairy categories as consumers continued to avoid spending money on non-essential packaged food items. The categories to register the steepest declines were cream and chilled dairy desserts and this is linked to high unit prices in these categories and the competition they face from packaged food categories with lower unit prices.
Plain fromage frais and quark registered the least severe volume sales declines of any category in other dairy in 2019 and this is a reflection of the category’s novelty, which means that affluent middle- and high-income consumers are still interested in purchasing these products in search of something a little different. However, sales of plain fromage frais and quark remain very low in Egypt and these products have not yet achieved widespread appeal.
With sales of other dairy likely to remain under pressure throughout the forecast period, none of the categories in other dairy should be expected to begin registering positive volume growth before the end of the forecast period. The main reason for the expected poor performance of other dairy is that the products within the category are generally considered to be unnecessary luxuries, which limits demand to a relatively small base of affluent middle- and high-income urban consumers.
Danone Egypt remains the dominant player in chilled dairy desserts as its Danette brand has become virtually synonymous with the category in Egypt. This very strong position has been hard-earned however, with Danone having focused heavily on pushing Danette for several years.
Juhayna Food Industries remains the leading player in cream with its brand Juhayna Whipping Cream now available in three different pack sizes ranging from 200g to one litre. The product range is promoted with the cooperation of popular TV chefs, who can often be seen on television and social media preparing recipes using Juhayna Whipping Cream.
The 2016 devaluation of the Egyptian currency led to Pinar Dairy Food Co withdrawing from fromage frais and quark, creating a vacuum in the category. The company’s Pinar brand had been the leading name in the category for a long time and the sudden absence of the brand on retail shelves created opportunities for France-based multinational company Groupe Bel to position its Kiri brand as the obvious replacement products for consumers who had previously favoured Pinar.
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Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Egypt with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Packaged Food market research database.