Oireachtas Joint and Select Committees

Tuesday, 16 October 2012

Joint Oireachtas Committee on Agriculture, Food and the Marine

Review of Food Harvest 2020 Strategy: Discussion (Resumed) with Irish Dairy Board and Bord Bia

2:35 pm

Mr. Joe O'Flynn:

I will add to that point made on growth potential. Clearly, we have a commitment to build our sales in our existing network within the European Union and North America. We see considerable growth potential. That said, if one considers where most of the basic dairy consumption growth is taking place, it is in emerging markets and being driven by population growth, GDP growth, the westernisation of eating habits and the introduction of dairy products as part of a nutritional programme at school level. China is a particular example in this regard. It is a case in point as its per capita consumption is still very low, at only approximately 30 kg per head. When one considers that the world average is approximately 100 kg per head and that the European figure is closer to 300 kg, there is huge potential in this regard.

As for other regions, while central Asia presents a political challenge in securing market access, Iran, Iraq and other countries in the region offer long-term potential because, as has been noted, they have a tradition of consuming dairy products.

On the concept of "co-opetition" and how we define it, I should probably ask Mr. Aidan Cotter to comment. The Irish Dairy Board views this as collaborating with like-minded players to develop stronger market positions for Ireland Inc. To cite one example, Kerrygold is working with Cashel Blue cheese in the United States market. Cashel Blue is an excellent product that is artisan in character and complements Kerrygold in that provenance and Irish personality are two central parts of the company's brand values. The natural piece - the honesty, if one likes - built into these brand values is of major importance in building our position.

Senator Paschal Mooney asked a question on packaging. To take the Kerrygold brand, we have completely revamped the logo and packaging in the past two years as part of an evolutionary rather than a revolutionary change. Part of the challenge in any exercise of this nature is the need to maintain continuity in terms of brand recognition, given that a consumer will spend five seconds scanning a shelf in passing. The gold foil is symbolic to the extent that it was the starting point of the Kerrygold brand. We have held this position, although we have had many imitators. It is extremely important to retain the identity of the brand.

The other colours, for example, in our powder brands have as much to do with having a visual impact in markets in which literacy levels may not be high. Obtaining ready recognition for one's product is extremely important. That is one observation on the issue.

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