Executive Summary

Aug 2018
Prospects
Innovation and convenience drive cheese sales

With simple cheeses such as flamengo-style still representing a significant part of national cheese consumption, manufacturers are strongly investing in differentiation. New packaging, more adaptable and convenient formats, and enlarged portfolios with types such as light, free from lactose or of a particular regional origin are some examples of dynamism within cheese towards the end of the review period.

Unprocessed and soft cheese present the stronger performances

Despite processed cheese’s positive performance in 2018, driven by its convenience and strong targeting of both children and adults, the rich variety of national cheese from different regions of the country resulted in a better performance by unprocessed cheese. On the other hand, traditional fresh soft cheese is highly popular because it is low in fat when compared to other cheese types, but mainly due to strong investment from manufacturers in enlarging their offers to include lactose-free options and goat-milk options, or by positioning for different consumption occasions by adding herbs and spices.

Promotional activities hampered by average price rise

Purchases of more-sophisticated or more-convenient cheese types had an inflationary effect on the average unit price of cheese in 2018. Despite this, promotional activities continued to be quite intensive, which was in order to attract consumers and increase volume sales.

Competitive Landscape
Fromageries Bel Portugal leads cheese in Portugal

Fromageries Bel Portugal continued to lead cheese in Portugal in 2018. The player was supported by continuous investment in innovation and communication, with a special focus on points of sale using specific materials that differentiated its brands on the shelves.

Tété II-Produtos Lácteos posts the highest growth in 2018

Soft cheese posted the best performance in 2018, with fresh cheese performing particularly well. Strongly associated with a high level of protein, low fat and a natural and fresh product, soft cheese continued to record an increase in sales in 2018.

Private label grows, but loses share

Private label manages to increase its value sales within cheese in 2018 due to its visible investment in the category. New launches of exclusive and limited editions of regional Portuguese cheeses, a wider portfolio in the growing areas of fresh cheese and lactose-free options, and increased availability of foreign cheeses at more-competitive prices supported private label’s positive performance.

Prospects
After years of strong declines, milk consumption is now stabilising

The milk industry was severely affected by consumers abandoning such products due to increasing awareness of lactose intolerance, the growing availability of vegetarian alternatives such as soy, rice or almond drinks, and a negative campaign, particularly through social media, relating to milk’s supposed harmful effects on adults’ health. In 2017, category sales began to stabilise, supported by a strong campaign in favour of milk consumption and its nutritional importance from producers’ associations, manufacturers, retailers and public health entities.

Added-value products are mainly responsible for the performance of drinking milk products

With strong declines registered over the review period, major national milk producers invested in added-value options, including selected milk products such as Matinal, and products from the Azores such as the successful Leite de Pastagem from Terra Nostra. This was followed by several brands and private label lines that originated from the Azores and were sold at higher than average prices.

Soy is losing space to other vegetable-based drinks

After strong growth registered over the review period, sales of soy drinks declined significantly towards the end of the period. Consumers were switching to other vegetable-based alternatives, such as almond, rice, cocoa or oats.

Competitive Landscape
National player Lactogal - Produtos Alimentares leads drinking milk products

Lactogal - Produtos Alimentares strongly led drinking milk products in 2018 due to its presence through a number of different brands, such as Matinal, Mimosa, Agros and Gresso. Different price positioning, innovation and communications continued to support the company position in the category, as well as its positive results in 2018.

Milk’s geographical origin has become important

In July 2017, it became mandatory to have milk’s origin identified on the packaging of dairy products in Portugal. This had been in demand for a long time from milk producers’ associations, as a considerable volume of milk was imported from other countries, mainly by private label, due to lower average prices.

Milk alternatives presents the best performance

Despite a considerable decline in sales of soy drinks, brands managed to quickly adapt and reinforce their offers with alternative vegetable drinks such as those using oats, almonds, rice and cocoa. Alpro is the leading player within milk alternatives and was increasingly under pressure in terms of prices, with volume growth being above that of value growth.

Prospects
High maturity and a lack of significant innovations affect yoghurt’s performance

Yoghurt in Portugal has already reached a high level of penetration. Despite positive movement in terms of sales options linked to health and wellness, such as lactose-free, organic, vegetable-based or probiotic yoghurts, this was not enough to compensate for the decline of more-traditional versions.

Plain yoghurt presents a positive performance

Despite an overall decline for yoghurt, almost all versions linked to the health and wellness trend recorded an increase in sales in 2018. Plain yoghurt benefited from consumers looking for simpler, sugar-free, less-processed and personalised products.

Diversifications and complexity within yoghurt are not helping sales

Yoghurt has become a large and very complex category, with dozens of products of different types and flavours. This is not helping consumers’ purchasing decisions or the attractiveness of the category, marked by its poor performance in recent years.

Competitive Landscape
Danone Portugal leads, but posts a decline in sales

Danone Portugal is the clear leader of yoghurt and sour milk products in Portugal. The company’s strong presence in all major categories through a differentiated range of brands that includes Activia, Corpos, Oikos, Actimel, Dan’Up, Danacol, Danonino and more recently Danette explains its outstanding share within the category.

Icelandic-styled skyr records strong growth

Due to its low fat and high protein level, skyr yoghurt has moved from a small niche of intensive gym users to an increasingly larger base of consumers who have mainly become aware of its benefits through social media. From a limited number of product lines available in 2017, with Lidl being the most notable supplier, such products registered very significant growth in 2018.

Private label is on top of new trends

Private label managed to gain value share within yoghurt and sour milk products in 2018, which was due to significant dynamism in terms of new launches, mainly in the most attractive area of health and wellness products. This, together with very competitive prices, promotional activities and consumers’ increasing confidence in its quality, resulted in private label performing better than manufacturers’ brands within yoghurt.

Prospects
Strong growth of powder gelatine hampers the performance of ready-to-eat gelatine

Ready-to-eat gelatine represents a significant part of chilled dairy desserts. Seen as a healthy, low-calorie snack, it is highly recommended for losing weight.

Cream posts the strongest growth among other dairy

With increasing interest in food and new cooking experiences boosted by national and international TV cooking shows and by the popularity of chefs, cream recorded significant growth in 2018. Manufacturers’ continuous investment in segmentation within cream is creating different options for various types of meals, such as fish, pasta and vegetable dishes, resulting in increased penetration of cream.

Quark records growth while parents turn away from fromage frais for children

The low fat and high protein characteristics of quark cheese resulted in its increasing attractiveness, with new foreign brands entering Portugal and national manufacturers including it in their portfolios. Nonetheless, the performance of quark cheese was not enough to compensate for the decline of children’s versions of fromage frais.

Competitive Landscape
Lactalis Nestlé Produits Frais leads other dairy

Lactalis Nestlé Produits Frais led other dairy in 2018, but recorded decreased sales due to strong competition in its most significant categories of chilled desserts and fromage frais and quark. Private label and the brand Reina stand out in chilled desserts by offering a wide portfolio of products and at very competitive prices, thus affecting the shares of other manufacturers, such as Lactalis Nestlé Produits Frais.

Unilever abandons shelf stable dairy desserts

Unilever abandoned shelf stable dairy in 2017. The company made a considerable investment in 2015 in the launch and promotion of the brand Alsa, a shelf stable gelatine with fruits.

Private label increases sales within other dairy

Private label accounted for a significant share of other dairy in 2018. Investment in shelf space and promotional activities continued to support its significant share and an increase in sales in 2018.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Portugal with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Portugal, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Portugal 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 Portugal?
  • What are the major brands in Portugal?
  • 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?

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

This industry report originates from Passport, our Packaged Food market research database.

Butter and Spreads

Cheese

Drinking Milk Products

Other Dairy

Yoghurt and Sour Milk Products

Packaged Food in Portugal - Industry Overview

EXECUTIVE SUMMARY

Upmarket shift in demand
Health and convenience drive growth
Private label remains strong but loses share
Modern grocery retailing sees share eroded
Positive outlook

FOODSERVICE

Sales to Foodservice
Ongoing volume growth expected
Blurring the boundries between retail and foodservice
Health a key influence on sales
Consumer Foodservice
Positive consumer foodservice environment
Health and convenience shaping demand
Diversification and premiumisation
Category Data
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

MARKET DATA

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 Penetration of Private Label by Category: % Value 2013-2018
Table 13 Distribution of Packaged Food by Format: % Value 2013-2018
Table 14 Distribution of Packaged Food by Format and Category: % Value 2018
Table 15 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 16 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources