Dairy in Slovenia

Prospects

Rising spending power and falling prices boost sales

Cheese continues to benefit from positive economic indicators. 2018 and 2019 saw GDP growth, rising employment, and increasing disposable incomes among consumers.

Unprocessed packaged cheese set to see growth as consumers focus on provenance

Origin, as a quality marker of cheese products, is gaining importance in Slovenia as a result of premiumisation. This is becoming an increasingly important factor influencing purchasing decisions as consumers’ disposable incomes and confidence levels rise, compared with recessionary periods, when consumers have to prioritise purchases based on price.

More affluent consumers drawn to premium cheeses

Even though the overall unit price is on the decline in Slovenia, consumers are increasingly looking to premium products, particularly as their disposable incomes rise. This is especially the case with local cheese.

Competitive Landscape

Positive impact for Ljubljanske Mlekarne’s use of local organic milk is offset by product recall

Leading player Ljubljanske Mlekarne dd managed to increase value sales, but its value share decreased in 2019. Towards the end of 2018 the company announced that it will use more locally sourced organic milk to produce cheese and other dairy products.

Pomurske Mlekarne implements social responsibility campaign

Pomurske Mlekarne dd implemented no new launches, but was very active in terms of promotion. Point of sale displays and discounts were widely used, but the main focus was corporate social responsibility.

Private label strong due to low pricing, with cheese a low priority for many dairy players

Private label cheese gained share in 2019, mostly due to widespread availability, affordable pricing, and general economic development in the country. Apart from discounts and print advertising (brochures) there were no particular marketing activities in support of such products.

Prospects

Health trend benefits alternatives to full fat milk such as goat milk and soy drinks

Due to the growing influence of the health and wellness trend, full fat milk products saw the lowest growth in 2019. Economic growth and the positive economic trends underpinned the category’s continued growth, but this was hampered by consumer concerns regarding fat content.

Dairy only flavoured milk drinks rise from low base thanks to offering convenience

Dairy only flavoured milk drinks saw notable value growth in 2019, mostly due to the category’s emergence from a low base. Along with the health trend, economic growth and rising consumer confidence are leading to consumers buying more products in the less popular categories.

Sales of full fat milk remain strong due to traditional popularity and natural image

While the health and wellness trend is on the rise, full fat products still hold a large share of products and continue to grow in value terms. This is why companies continue to implement launches and promotions.

Competitive Landscape

Ljubljanske Mlekarne remains unchallenged due to long presence and launches new products

Leading player Ljubljanske Mlekarne dd maintained its value share in 2019. The company continued efforts to hold on to its position, by ensuring that its shelf positioning remained strong, and brand visibility high.

TV, social and print media most popular to promote drinking milk products

Second place in drinking milk products was held by the private label of Poslovni Sistem Mercator dd. This is due to its highly developed distribution network and relative quality, as the milk is sourced locally.

Private label holds large value share with limited demand for premium products

The Slovenian drinking milk category is characterised by a high share held by private label products. Every retail chain offers its own portfolio of drinking milk products.

Prospects

Healthy properties maintain growth, with interest in low-sugar and high-fibre products

Yoghurt and sour milk products saw continued growth across the board in 2019, led by sour milk products and drinking yoghurts. The category is fuelled by innovations and promotional activities, which serve to maintain consumer interest.

Drinking and plain yoghurt benefit from healthy image

Drinking and plain yoghurt also saw dynamic performances in 2019. These products are growing in popularity as a result of the health and wellness trend, being perceived as healthier alternatives to sweetened or flavoured variations.

Private label popularity hinders price growth, with new economy products likely

The forecast period is bound to witness further marketing activities and new agreements within existing retail distribution networks, potentially extending to discounters. Producers are also likely to invest more in communicating their product claims in line with the nascent health and wellness trend, especially in terms of low fat/calorie/sugar content.

Competitive Landscape

Leader Ljubljanske Mlekarne debuts high protein skyr

Players in the yoghurt and sour milk products category were busy in 2019. The category saw numerous launches, in support of which players implemented a variety of tactics.

Affordable brands and private label benefit from price-sensitivity

Premium yoghurt and sour milk products tend to rely on strong brand positioning and claims of superior quality and prestige in order to win consumers. However, Slovenia sees only a marginal share held by such products.

Manufacturers target both health-conscious consumers and those with traditional tastes

Third ranked Mlekarne Celeia doo, also had two new launches, and saw a slight value share gain in 2019. LCA was more health and wellness product-orientated towards probiotic properties, and with only natural sweeteners added.

Prospects

Other dairy could benefit from more advertising but rising incomes boost growth

Other dairy continued to be dynamic in terms of value growth in 2019. While marketing activities definitely fuelled growth, the simple truth is that these products are quite popular among Slovenian consumers.

Smaller categories emerge and may see more innovation and investment

Fromage frais and quark also saw continued growth in 2019, as did cream. These categories hold the largest value shares within other dairy, and their healthy performance is the main engine of the category’s overall growth.

Other dairy likely to attract growing investment as players recognise growth potential

In recent years most dairy producers focused on product development and marketing activity in other categories of dairy, which resulted in a significant increase in competitiveness and inevitable reductions in the bottom line for all involved. These producers are expected to paying greater attention to other dairy over the forecast period, due to its potential and the lack of tough competition, compared with yoghurt, for example.

Competitive Landscape

Mlekarna Celeia holds on to lead thanks to wide distribution for Zelene Doline

Mlekarna Celeia doo maintained the category lead in 2019. Like other leading players, it invested heavily in point of sale promotions and prices discounts.

Standard products dominate while private label sees growth thanks to low prices

Private label continues to grow, mainly due to good shelf positioning and affordable pricing. However, the potential is much greater.

Only coffee whiteners sees new launch

There were few new launches to stimulate the category’s performance. One exception was the coffee whiteners, Zott Kaffe Sahne, by Erfa doo.

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