In part two of our 2013 industry forecast, we ponder whether Greek yogurt giant Chobani can make it big outside of the US, and if dairy processors can reinvigorate demand for fresh dairy products in Southern Europe.
Chobani going global: US-based Greek yogurt giant Chobani seems set on world dominance. It appears the New York-based yogurt manufacturer isn’t satisfied with control of the US market - it’s looking much further afield.
In 2012, the Chobani brand was launched in the UK and in Australia. It also opened a brand new A$30m yogurt manufacturing plant near Melbourne, Australia in December 2012.
The plant, which has a production capacity of 30,000 tonnes per year, is expected to become an export hub to grow the Chobani Greek yogurt brand in Asia.
In the same month, Chobani opened what it claims is the world’s largest yogurt factory in Twin Falls, Idaho – its second domestic manufacturing facility. Plans are also in place to begin the manufacture of Chobani in Canada.
So in the space of a year, Chobani has gone from one New York-based plant to processing operations on two continents.
Some would start to suspect that Chobani has its eye on not only remaining the number one US yogurt brand, but also claiming a significant share of global yogurt sales.
European consumption collapse. Hit or bust?: In June 2012, French dairy giant Danone was forced to issue a profits warning for the year. The firm reduced its operating margin target to account for the collapse of dairy product consumption in Spain and other Southern European markets.
At the time, Danone attributed this to the growing rate of unemployment in the region, and a preference for cheaper, private label dairy.
In Spain, unemployment currently stands at 26.2%. In Greece, unemployment stands at 26%, while in Portugal unemployment is a slightly less worrying 16.3%. In fact, European unemployment levels hit 11.8% in November 2012 - a record high during the European debt crisis.
This worsening situation could mean a few things for the industry.
Dairy manufacturers could increase their focus on emerging growth markets such as Asia and South America. For many companies, sales from these regions already account for the majority of their revenue.
Or like Danone, some dairy manufacturers will focus on the regenerating demand for fresh dairy in these Southern European nations.
What is certain, however, is that European fresh dairy demand isn't likely to bounce back completely in 2013.