DEAR SIR: Ornua’s Kerrygold brand is now worth €1bn to the Irish dairy industry, which is clearly a global marketing dairy asset. This concept of marketing and selling Irish grass-fed dairy products under a common Kerrygold brand through Ornua, has proven to be a successful marketing model, which is envied by many other dairy countries around the world. Significant investments by levies paid by Irish dairy farmers and large investment by industry over six decades has developed an iconic Kerrygold marketing brand. The Ornua Kerrygold brand is now number one brand in Germany and number two in the USA retail consumer markets. Continuous innovation and product diversification are an essential part of the future growth and development of the Irish dairy industry, but it is also essential that such developments should avoid duplication of resources, investment or any dilution of existing competitiveness by the industry in its strategy in key global markets.
However Glanbia, which holds up to 33% of total shares in Ornua, has launched a Truly Grass Fed (TGF) cheese in the US market in direct competition with the Kerrygold brand. It is understandable that Glanbia needs to launch new dairy products on an ongoing basis, but will this come at a cost to the Kerrygold brand and Irish farmers. Kerrygold and TGF dairy products are both currently using the marketing concept of 95% grass-produced, Irish family farm milk system.
This marketing strategy by Glanbia in the US can lead to unnecessary competition, which has the potential to destroy Irish dairy shareholder value and reduce the value of the Irish dairy industry. There is a real risk that the TGF products launch may devalue and cannibalise the Kerrygold brand, which can only reduce farmer milk price into the future.
The practice of farmers competing with farmers on global markets in this manner will have the consequences of only devaluing our Irish dairy food supply chain and farmer milk price.
The Irish dairy industry now needs to take stock, reflect in the best interest of the Irish dairy industry and rethink a national dairy food marketing strategy involving all the key players.
A way forward needs to be found by having a dairy industry debate, which has already started. The outcome of this approach can only help to create an Irish dairy industry road map, which will ensure a coherent national marketing strategy for Irish grass-produced butter, cheese and powder products, to maximise the returns for the Irish dairy industry and dairy farmers alike.
Read more
Concern that Truly Grass Fed will erode value for dairy farmers - Jordan
Letter: where are the profits going?
DEAR SIR: Ornua’s Kerrygold brand is now worth €1bn to the Irish dairy industry, which is clearly a global marketing dairy asset. This concept of marketing and selling Irish grass-fed dairy products under a common Kerrygold brand through Ornua, has proven to be a successful marketing model, which is envied by many other dairy countries around the world. Significant investments by levies paid by Irish dairy farmers and large investment by industry over six decades has developed an iconic Kerrygold marketing brand. The Ornua Kerrygold brand is now number one brand in Germany and number two in the USA retail consumer markets. Continuous innovation and product diversification are an essential part of the future growth and development of the Irish dairy industry, but it is also essential that such developments should avoid duplication of resources, investment or any dilution of existing competitiveness by the industry in its strategy in key global markets.
However Glanbia, which holds up to 33% of total shares in Ornua, has launched a Truly Grass Fed (TGF) cheese in the US market in direct competition with the Kerrygold brand. It is understandable that Glanbia needs to launch new dairy products on an ongoing basis, but will this come at a cost to the Kerrygold brand and Irish farmers. Kerrygold and TGF dairy products are both currently using the marketing concept of 95% grass-produced, Irish family farm milk system.
This marketing strategy by Glanbia in the US can lead to unnecessary competition, which has the potential to destroy Irish dairy shareholder value and reduce the value of the Irish dairy industry. There is a real risk that the TGF products launch may devalue and cannibalise the Kerrygold brand, which can only reduce farmer milk price into the future.
The practice of farmers competing with farmers on global markets in this manner will have the consequences of only devaluing our Irish dairy food supply chain and farmer milk price.
The Irish dairy industry now needs to take stock, reflect in the best interest of the Irish dairy industry and rethink a national dairy food marketing strategy involving all the key players.
A way forward needs to be found by having a dairy industry debate, which has already started. The outcome of this approach can only help to create an Irish dairy industry road map, which will ensure a coherent national marketing strategy for Irish grass-produced butter, cheese and powder products, to maximise the returns for the Irish dairy industry and dairy farmers alike.
Read more
Concern that Truly Grass Fed will erode value for dairy farmers - Jordan
Letter: where are the profits going?
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