RomaniaDairyTrends2011.pdf

Romania Dairy

KNOWLEDGE

Trends, Threats and Opportunities

March 2011

See further, deliver more

The following pages represent a short summary of some of the trends, opportunities, and

threats to dairy on both a global/regional level and to Romanian dairy market specifically.

This report has been compiled by and comes courtesy of Cocoon Group Knowledge Center.

introduction

Trends and Opportunities

Globally, social responsibility and "green friendliness" are

being reflected in a great number of sustainability projects

and locally produced, fair trade and bio products. Milk

increasingly included.

green friendly

There is an increasing presence across all social media

by FMCG producers as companies and brands begin

to sort out effective strategies and realistic objectives.

social media savvy

healthy boomers

Health issues drive new product development in dairy.

Omega 3-fortified products, introduced in Western

Europe in the first half of the last decade - and other

nutritional additions - are arriving in CEE in a greater

scale. This trend is strongly influenced by Boomers’

increasing health awareness and purchasing power.

conscientious

indulgence There is still a lot of space for variation in healthy food

regarding presentation and nutritional benefits. Conveniently,

Conscience meets Indulgence when the taste appeal of the

dessert comes with the promise of better health.

growth space

Some dairy sub-segments, such as yoghurt and specialties, still show

low consumption levels in Romania, when compared to more mature

countries in the European Union. Growth potential is evident.

novelty

Romanians are known for being open to innovations and

willing to try new products and formats. For instance, new

proposals in the cheese segment (snacking cheeses,

flavored cheeses, mixed cheeses, specialty cheeses) or milk

segment (flavored milk) are welcome.

There is a lot of space for the development of more efficient and

attractive online strategies. For instance, as the nutritional appeal of

new advances in Dairy are given more attention to by the producers, it

is not a bad idea to include online health information and advice

sections and put them within easy reach of the consumers.

online activity

hunger for

private labels

Private brands are eagerly swallowing market

share due to their strongly functional

positioning and affordability. As the

consumers realize that these value for money

products fulfill basic needs for a lower price,

the exodus from other brands is felt

worldwide.

Dairy brands, as with most categories, must

continually justify their price points through

innovation and non-functional benefits.

Threats

category blur

Categories are overlapping. Dairy fights with more

than just dairy when it comes both to nutritional

values and taste appeal: fruit juices and smoothies,

desserts, soy products, supplements and other

products that bring similar benefits as milk products.

Solid communication strategy, innovation and

creativity - all reflected in attractive packaging - are

invaluable weapons in this war.

EU invasion

A current threat to the national production lays on the fact

that imported milk products from other European Union

countries frequently arrive in Romania with lower prices

than those locally produced.

lack of

capital

Romanian dairy farmers, already lacking the capital to modernize or grow, now face

additional pressure because of steep declines (or even cancellations) of government

subsidies due to the recent financial crisis. This anemic level of state and private

investment threatens to undermine quality and amount of production in the country.

For more information, please contact:

Cocoon Group Romania

Simona Straut

[email protected]

0040 212 222 077

Emanoil Porumbaru street, no. 43

011422, Bucharest 1, Romania

www.cg-eu.com

Thank you for your attention.

CG Knowledge

Douglas Kaufman

[email protected]

00420 222 998 516