The Irish Farmers Journal understands that Tirlán has agreed a substantial deal to supply American supermarket chain Costco with grass-fed butter for the retailer’s Kirkland brand.

While the co-op’s Truly Grass Fed brand has been available on US shelves since 2019, the deal with Costco is a new departure for the Irish processor.

The volumes of butter involved will be much higher, while the retail price will be at a significant discount to either Kerrygold or Truly Grass Fed.

While Costco’s Kirkland grass-fed brand had been supplied from New Zealand, the Irish Farmers Journal understands that the retailer had run into issues sourcing sufficient stock from that country.

As part of the deal with Tirlán, the label on the Kirkland brand will change from “product of New Zealand” to “Grass-fed Butter”.

The Kirkland brand retails at around $15/kg (€13.20/kg), while Kerrygold in Costco is priced at close to $21/kg (€18.50).

Tirlán sees 'scope for multiple grass-fed offerings'

A spokesperson for Tirlán said: “As consumer demand for grass-fed dairy continues to grow, retailers are expanding their own premium grass-fed ranges. Private-label products are now an established feature of the category.

“In a competitive global dairy market, capturing value increasingly requires participation across multiple routes to market, including both branded and private-label channels.

"We believe there is scope for multiple grass-fed offerings in a growing US dairy market, as demonstrated by the continued growth of Kerrygold alongside other Irish and international grass-fed offerings.

“When opportunities arise that create additional value from Irish grass-fed milk and complement existing routes to market, Tirlán has a responsibility to evaluate them carefully on behalf of our members.

“Tirlán is Ornua's largest shareholder – we remain strongly supportive of the organisation and the Kerrygold brand. Tirlán continues to engage constructively with Ornua.”

Ornua focused on 'protecting' investment

A spokesperson for Ornua said: “Competition is a feature of every successful marketplace and Ornua has more than six decades of experience competing strongly around the world.

"However, we do not believe competing on price alone is in the best interests of the farmers we represent, as it devalues the Irish grass-fed butter proposition, rather than building this through innovation, quality and long-term brand investment.

“When market value is eroded, it has a direct impact on the amount we return to our members and the Irish dairy farming families we represent.

“Ornua believes the greatest long-term value for Irish dairy farmers is created when our members continue to invest through Kerrygold, the brand they have built and supported for more than 65 years.

“Our focus remains on protecting the significant investment Irish dairy farmers have made in the Kerrygold brand since 1962, defending its hard-earned position in global markets, delivering an unmatched Kerrygold experience for consumers and continuing to build its value for farmers today and for future generations.”

This article has been updated to include comments from Tirlán and Ornua.