2010 dairy consumption in Italy has been largely shaped by the economic downturn with consumer confidence weakened and lower disposable incomes a continuing reality.
Here Euromonitor International discusses how brand owners have utilised shaped liquid cartons to drive sales.
Retailers' private label lines have been a prime beneficiary as consumers trade down to the cheaper prices offered by supermarket brands such as Coop, Conad and Esselunga.
This has resulted in private label milk sales continuing on an upward curve, accounting for 19% of Italian milk sales in 2010 compared to just 10% in 2005.
Private label is eating particularly into share of brand leaders, Granarolo SpA and Parmalat SpA.
Brand owners respond through promotions and simple packaging…
For brand owners, the fiercely competitive operating environment will continue to be a challenging one both in terms of penetration of private label and difficulty to expand consumption in mature, standard drinking milk categories.
In response, brand owners are increasingly using discounting and promotional pricing campaigns to re-position the affordability of their product ranges to consumers, a strategy especially evident within the mature dairy categories of long-life/ UHT milk, spoonable yoghurt and cheese.
Appealing to both a health and price-conscious consumer base, dairy brand leader, Granarolo has, for instance, launched a new range of functional drinking milk (milk enriched with vitamins) in simple brick liquid cartons rather than in exclusive packaging to provide consumers with an attractive, affordable price point.
Granarolo has additionally launched its Sfizinosso Granarolo unspreadable processed cheese in a larger sized 540g flexible plastic pack as a means of providing better value for money, lower price per kilo, alternative to the more common pack sizes of 150g and 200g on the market.
...and use shaped packaging as differentiation tool for added-value launches
As part of the wellness trend in Italy, brand leaders are launching new varieties of drinking milk with added-value benefits such as long-life/UHT milk enriched with Omega3, calcium and vitamins.
These added-value milks hold a niche presence on the Italian market with brand owners choosing to use shaped liquid cartons as a means to gain on-shelf presence and differentiate from standard milk lines most commonly purchased in a brick liquid carton.
As such, the shaped liquid carton enjoys the position of being the biggest growth pack type in the dairy category in Italy in 2010, with retail sales of the shaped liquid cartons recording absolute growth of 134 million units.
Parmalat SpA launched its Latte Physical (milk with added calcium) and Omega3+ in a 1-litre Tetra Prisma liquid carton along with a 250ml single-serve size to cater for the healthy beverage needs of the on-the-go consumer and smaller household.
Using Tetra Pak's Tetra Top bottle for the single-serve 250ml size, the pack provides the consumer with easy opening and closing facilities through the plastic screw closure.
Best dairy opportunities for packaging growth to 2015…
As the Italian economy starts to recover, further opportunities will exist for added-value functional dairy variants. Other shaped liquid cartons are forecast to build on the gains made to date in the Italian drinking milk category with strong growth opportunities expected in both fresh/pasteurised and long-life/ UHT milk through to 2015.
For HDPE bottles, long-life/ UHT milk and functional drinking yoghurt are set to present best prospects whilst for thin wall plastic containers, robust growth in functional spoonable yoghurt is expected as consumers continue to search for a quick and nutritious snack with single-serve 125g sized yoghurt pot sales forecast most dynamic outlook.
Analyst Insight by Rosemarie Downey.
Please visit Euromonitor International for more information
8 February 2011