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Dairy in Western Europe

December 2017

Dairy consumption in Western Europe is mature in comparison to other regions in the world, with high per capita consumption. The market has been in decline in the region over the past years, with changes in consumer diets impacting demand. The declining trend does not, however, mean that there are not growth possibilities in the region, as the market dynamic by country varies, as does the development by category, so spotting the right opportunities may still offer companies steady growth.

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WESTERN EUROPE HAS ALREADY REACHED A HIGH LEVEL OF MATURITY WITHIN DAIRY 

Western Europe is characterised by a strong dairy culture and high per capita consumption, particularly in core categories such as cheese, drinking milk products and yoghurt. However, there is still room for growth, as shifts between categories and premiumisation are still ongoing. Dairy products are a natural source of vitamin B and calcium, which could play as an advantage for manufacturers to better position their products and even compete with other on-the go snacking products if these are packed accordingly, increasing market diversification. 

GERMANY SWIMS AGAINST THE STREAM AND SLOWS DOWN THE DECLINE IN DAIRY FOR THE REGION 

Whilst four of the top five dairy markets in Western Europe – Italy, the UK, France and Spain – saw a decline in dairy value sales in 2017, Germany registered growth, especially in cheese and other dairy. This growth in consumption can be explained by the current favourable German economic stability and its already established retailing environment, including discounters, which themselves are also positioning part of its brand spectrum with a higher added value.

Stronger decline in cheese sales in Italy and UK

Both in Italy and the UK, sales of cheese and drinking milk products have fallen, reflecting in part a consumer shift to non-dairy and lactose-free alternatives, whether for allergy and intolerance reasons or in order to enhance the digestion process. Many consumers are just decreasing their dairy consumption overall. 

Internet retailing and discounters gaining strength 

Discounters registered growth in share of distribution of dairy products in the UK, France and Ireland over 2012-2017, whilst internet retailing sales grew steadily throughout the region, but from a lower base. As internet retailing grows, new possibilities arise, even for smaller manufacturers, as these can benefit from a wider distribution chain, for example Amazon Fresh including local cheese manufacturers in its product range.

Introduction

Scope
Key findings

Regional Overview

Putting Western Europe into context
Dairy in Western Europe to register flat growth over the next years
Italy suffers the strongest overall decline in cheese
Italy and the UK led the overall decline in dairy for Western Europe
Drinking milk products had the poorest performance in the region
Dairy consumption weakens after the rise of lactose-free diets
Discounters grow but super/hypermarkets still dominate sales
Internet retailing on the rise driven by convenience

Leading Companies and Brands

Private label strong, as is trust in local family-owned businesses
Price competition pushes private label to grow even from a solid base
Companies focus their efforts on a handful of European markets
Top brands impacted by category movements in Western Europe

Forecast Projections

Dairy in Spain is expected to register growth after years of decline
Spain to grow through health and wellness dairy products
Product variety contributes positively despite the market maturity
Innovation and dairy alternatives as a key for growth in the region

Country Snapshots

Germany: market context
Germany: competitive and retail landscape
Netherlands: m arket context
Netherlands: competitive and retail landscape
France: market context
France: c ompetitive and retail landscape
Italy: market context
Italy: competitive and retail landscape
UK: market context
UK: competitive and retail landscape
Spain: market context
Spain: competitive and retail landscape
Portugal: market context
Portugal: competitive and retail landscape
Austria: market context
Austria: competitive and retail landscape
Switzerland: market context
Switzerland: competitive and retail landscape
Ireland: market context
Ireland: competitive and retail landscape
Sweden: market context
Sweden: competitive and retail landscape
Norway: market context
Norway: competitive and retail landscape
Denmark: market context
Denmark: competitive and retail landscape
Finland: market context
Finland: competitive and retail landscape
Turkey: market context
Turkey: competitive and retail landscape
Belgium: market context
Belgium: competitive and retail landscape
Greece: market context
Greece: competitive and retail landscape

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models
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