Dairy in Macedonia

Prospects

Demand for packaged cheese is stable with bright prospects

Cheese continued its strong growth in 2018 largely driven by an influx of value-added, premium cheeses and manufacturers’ increased focus on individually-packed cheese in flexible packaging. Packaged hard cheese in slices was increasingly popular in 2018.

Premiumisation of cheese continues in 2018

Cheese continued to witness increased premiumisation in 2018. New brands continue to enter the local market, which is small but increasingly discriminating with growing demand for high-quality soft and ripened cheeses.

Spreadable processed cheese witnesses a renaissance

In 2018, spreadable processed cheese achieved the second highest retail value growth within cheese. There is an increased presence of new brands and products, including a number of key new launches made by domestic dairy and cheese manufacturers.

Competitive Landscape

IMB Mlekara Bitola maintains its lead in cheese in 2018

In 2018, the largest domestic dairy manufacturer in Macedonia, IMB Mlekara Bitola ad, maintained a solid lead within cheese with a moderately increasing value share thanks to continued market penetration with its packaged hard and soft cheeses and, in part, increased focus on premium packaged hard cheese. Its company ranking and success are a direct result of the solid performance of its rich and diverse brand portfolio, led by Bitolsko Sirenje and Bitolski Kaskaval and their brand extensions based on the type of milk used to produce the particular cheese (cow’s – Kravjo/Kravji, sheep – Ovco/Ovci, and mixed – Meshan/Meshano).

Ideal Sipka ranks second in 2018

Another dairy company based in the southern Macedonian town of Bitola, Ideal Sipka ad, ranked second in cheese in 2018 with a moderately decreasing value share. Its good overall position is due to the strength of its diverse brand portfolio led by the eponymous cheese brand, Ideal Sipka.

Domestic cheese brands and manufacturers dominate cheese in Macedonia

In 2018, cheese in Macedonia continued to be dominated by domestic brands and cheese manufacturing companies. The remaining value sales are of cheese brands owned by regional dairy and cheese manufacturers, as well as several German, French, Dutch and Danish companies.

Prospects

Volume demand for drinking milk products is stable amid negative demographics

Negative demographic trends tend to limit the volume growth of drinking milk products as there are fewer regular consumers. On the other hand, health and wellness trends, coupled with local consumers’ continuously evolving diets in line with global weight management and wellbeing trends, frequently exclude dairy products, including drinking milk, and rely more on fruit, vegetables and non-animal protein.

Semi skimmed shelf stable milk growth is boosted by health and wellness trends

Amid the general trend towards substituting drinking milk for other types of healthy food, semi skimmed shelf stable milk is an exception and a true winner thanks to the effects of health and wellness trends. In 2018, semi skimmed shelf stable milk achieved the highest retail current value growth, primarily due to increased volume demand by health and wellness enthusiasts who prefer taking their cereals with drinking milk which contains less fat.

Two new brands enter targeting lactose-intolerant milk drinkers

Lactose intolerance, or lactose malabsorption, is a well-known condition, being the inability to fully digest the sugar (lactose) in milk. It results in diarrhoea, gas and bloating after consuming dairy products, especially drinking milk.

Competitive Landscape

IMB Mlekara Bitola is the undisputed dominant player in drinking milk products in 2018

IMB Mlekara Bitola ad is Macedonia’s largest dairy manufacturing company. It dominates drinking milk products with a significantly increasing value share, partly as a result of the gap left by the withdrawal of the Dukat brand which the company was quick to occupy together with several other players.

Croatian Vindija ranks second in drinking milk products

Croatian company, Vindija dd, in second place lags behind dominant IMB Mlekara Bitola ad in terms of value share, but is closely followed by domestic company Zdravje Radovo doo. Vindija’s value share of drinking milk products increased in 2018 as the company improved the distribution of its shelf stable milk products sold under the Z Bregov brand name.

Domestic companies and private label increase their share

In 2018, domestic companies increased their overall value share of drinking milk products thanks to the great improvements in the value share of dominant IMB Mlekara Bitola ad and those of Zdravje Radovo doo, Sütas AS and Mlekara Tetovo ad. The majority of drinking milk products sold locally are brands manufactured in Macedonia, while the remainder are regional brands by companies such as Vindija dd, Imlek AD, Ljubljanske Mlekarne dd, and Niska Mlekara ad.

Prospects

Yoghurt and sour milk products has a long tradition of consumption in Macedonia

Yoghurt and sour milk products seems to be immune to any crisis which Macedonia faces. The products are frequently consumed throughout the day, hence the strong growth and significant amount of sales.

The health and wellness craze helps yoghurt and sour milk products maintain healthy growth

Yoghurt and sour milk products is expected to capitalise on the latest health and wellness craze which increasingly obsesses locals in Macedonia, like most people around the globe. The dairy products in yoghurt and sour milk products are highly thought of and heavily used in contemporary health and wellness diets, which are based on low consumption of fats and carbohydrates and increased consumption of proteins, grains, dried fruits and fresh (super)fruits.

Domestic companies additionally focus on launching functional yoghurt brands

Several domestic companies have embraced the growing significance of health and wellness trends by launching their own versions of functional yoghurt brand extensions. With this added value they have managed to increase the average unit prices of their yoghurt and sour milk products sold locally and have contributed to the overall increase in unit prices of yoghurt and sour milk products.

Competitive Landscape

Croatian company Dukat dd leads yoghurt and sour milk products

Dukat dd, a Croatian company globally owned by Groupe Lactalis, led yoghurt and sour milk products in Macedonia in 2018 with a moderately decreasing value share. The overall performance and value share of Dukat derives from the combined strength of its eponymous brand portfolio.

Domestic IMB Mlekara Bitola ranks second

IMB Mlekara Bitola ad ranked second within yoghurt and sour milk products in 2018 with a moderately growing value share thanks to improved distribution leading to further penetration of its brand, Bitolski Jogurt, and its new Balans +. These brands enjoy significant market coverage and local consumers recognise them for their exceptional quality and product consistency.

Domestic companies maintain a clear competitive advantage over international players

Besides IMB Mlekara Bitola, there are several large domestic dairy companies commanding a significant value share of yoghurt and sour milk products. These include Zdravje Radovo doo, whose value share increased over the late review period, and Mlekara Bucen Kozjak doo, which has a stagnating value share but a solid presence and strong brand recognition and loyalty.

Prospects

Cream constitutes the bulk of other dairy sales

In 2018, other dairy continued to outperform most of its competitors within dairy in terms of retail current value growth. Its performance is mostly a result of the frequent new launches resulting from the significant innovation efforts made by key players and manufacturers of other dairy products.

Contemporary cooking relies on more cream and other dairy products

The versatile use of cream as both a meal and cooking ingredient contributes to its significant and robust volume and value sales within other dairy. Cream in Macedonia is very affordable due to its low unit prices; as such, it is very popular both as an individual other dairy product which can be consumed alone or, in most cases, used as a cooking ingredient, especially when cooking meats and vegetables in white, dairy-based sauces.

Other dairy is set to benefit from more innovation

Frequent new launches based on innovation in terms of ingredients, flavours, combinations, design and packaging have a positive impact on other dairy in Macedonia. Chilled dairy desserts and chilled snacks are among the most dynamic.

Competitive Landscape

Zott GmbH & Co KG leads other dairy

In 2018, German-based company Zott GmbH & Co KG led other dairy with a moderately growing value share thanks to the solid performance and strength of its brand portfolio. Zott GmbH & Co KG owns the top-selling brand within other dairy, Monte Snack.

Domestic IMB Mlekara Bitola ranks second

In 2018, the largest domestic dairy company IMB Mlekara Bitola ad ranked second within other dairy with a stagnant value share due to increased competition and the entry of a number of competitively-priced economy and standard brands. The company’s main competing brand in other dairy is Bitolska Kisela Pavlaka which enjoys excellent distribution and brand recognition among local consumers.

Other dairy is largely dominated by international players

In 2018, other dairy remained under the dominance of international brands and manufacturers. Domestic companies, led by IMB Mlekara Bitola ad, Ideal Sipka ad, Zdravje Radovo doo and few other smaller players and brands, occupied the lesser value share of other dairy in Macedonia in 2018.

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