Moroccan customers value quality Irish butter
Nicolas Ranninger-Regional Director Africa
Morocco is estimated to have imported around 10,000 tonnes of butter in 2021 (IHS Market, 2022). Butter is a particularly important ingredient for Moroccans, who use it for cooking and baking as well as with snacks. Butter is especially important during Ramadan as demand doubles compared to other months in the year. Last year 7,000mt of butter was sold through Moroccan retail channels (Euromonitor International, 2022)
In 2021, of the 10,000mt of butter imported by Morocco, close to half was sourced directly from Ireland, with a doubling of Irish butter exports in the space of 4 years. Ireland was also the main supplier of casein with 1,800 tonnes out of a total of 3,220 tonnes and the third largest supplier of cheddar cheese at 2,275 tonnes.
Irish butter is primarily utilised by Moroccan processors in the manufacture of baked goods, pastries and similar applications where it has gained a reputation for consistency of taste and excellent functionality. Inflationary pressures, coupled with the sustained high cost of butter in particular has been a challenge for Moroccan customers and while Irish butter is in demand, there has been a move by some customers to source less expensive products from Argentina, Turkey and New Zealand.
There appears to be a growing move towards low fat butter (butter containing only 55-60% of the fat content) by local manufacturers, probably driven by their desire to keep low retail selling prices.
Low fat butter 55 %
The presence of margarines and spreads is particularly visible on the retail shelves and appears to have increased in 2022 as a response to high butter prices. According to Euromonitor, spreadable butter accounted for just over a third of butter and spread retail sales in volume and over 17 % of the value in 2021 (Euromonitor International, 2022). We can expect further growth in the market share of this category as well as the segmentation of the offering by different functionalities. This can be seen in the Ledda Brand through their offering of 2 SKU’s; one for baking and one for kneading.
Speaking at Bord Bia’s, Irish and Moroccan dairy ingredients Forum held at Casablanca, Morocco on the 29th of September, Professor Nabil Adel warned about the dangers of down trading and advised manufacturers to look to reduce operational costs, and improve premiumisation and innovation ("Forum Irlando - Marocain des Produits Laitiers", 2022).
Applied to the dairy ingredients sector, this could be through improved operational flow of communication via digital solutions and shorter supply chains, improved product quality to respond to consumers looking for a better experience value for their money, and innovation that can reduce production costs or else differentiate them from their competitors.
The premiumisation approach may at first seem counter intuitive, but Professor Nabil explained that the only response companies have in a shrinking market is to increase their margins to maintain profitability or else it will be a race to the bottom ("Forum Irlando - Marocain des Produits Laitiers", 2022).
The Irish dairy sector can leverage its solid reputation for its product quality and technical expertise, and it will also become increasingly important for dairy processors and exporters to collaborate with customer on B2B product supports and development in a market that is challenged by soaring prices.
Bord Bia’s Global Business Development and the dairy sector team will continue to support clients in their efforts to develop strong customer relations in the Moroccan market.
Euromintor International. (2022). Butter and Spreads in Morocco (pp. 1,3).
Forum Irlando - Marocain des Produits Laitiers. (2022). Presentation, Le Casablanca Hotel.