Nicolas Ranninger, Stockholm Office Manager, Bord Bia – Irish Food Board
Since August, signs of shortages of local butter supplies in Finland and Sweden are visible. This shortage is occurring despite the presence within these markets of the two giant dairy cooperatives, namely Arla and Valio, who between process in excess of 8bn litres of milk across the Nordic countries. This shortage appears to be due to a combination of changes in consumer preferences and declining local production.
Preference for natural products
Valio’s technology director Matti Harju suggests that consumers are now looking for natural products. Because of the carbohydrate discussion, fat is no longer as strong an issue for consumers. Low fat milk consumption is declining and full fat milk consumption is rising. For 20-30 years the milk trend has been completely the opposite. Butter sales are also on the rise while margarine and other refined fats are showing signs of decline. This is putting pressure on supplies of available for butter and cheese production.
Drop in Production
Milk output has been in decline over the last decade in both in Sweden and Finland. Between 2001 and 2010, a drop of 170 000 tonnes and 430,000 tonnes across Finland and Sweden respectively has been recorded. The Swedish Dairy Association points out that the drop in farm profitability has resulted in farmers leaving the sector. This drop has partially been compensated by the increase of the Danish production.
Irish dairy exports into the Nordics stood €15.2 m in 2010, which represented a rise of 69%. The changes in Nordic dairy consumption should offer further export potential for Irish butter and cheese for the companies capable to adapt to the Nordic market and overcome a very strong consumer national production preference.