Letter from Europe: Clever marketing ideas keep the milk money rolling in

Thursday, December 3, 2009

Innovative products for school children, low calories dairy foods and exotic new flavours are helping European dairy producers keep market share and prices up

by NORMAN DUNN

Blending butter with green clover, cream cheese with apples, onions and raw herring or creating fruit yogurts and milk drinks especially for four-year-olds – there's always something new from the dairy industry in Europe. And these initiatives are helping to keep total sales turnovers high.

In fact, the market and the prices that farmers get for their milk depend as never before on these innovative product developers, according to a survey this year by the respected Dutch University of Wageningen's Economic Research Institute (LEI).

The institute says strict European Union limits to milk production through the quota program are losing Europe world market share. For instance, failure to supply enough skimmed milk powder has seen New Zealand stepping in to snap up more of the global market in this respect.

Luckily, quality products, particularly from the Netherlands, France and Germany, have kept at least cheese exports steady, even during the economic downturn. But, back home in Europe, the LEI is certain that innovations have helped save the day.
Fancy flavours aren't everything, though. One of the biggest attractions in the dairy section is plain old organic milk and its products, and the only thing stopping even more expansion in this case is lack of supplies.

In Denmark last year, bio-milk and its products accounted for 40 per cent of total exported organic foods. For its domestic demand, too, the Danish Dairy Board reckons on a 50 per cent rise in organic milk sales by 2013, which will represent 13 to 14 per cent of total milk deliveries by that time.

Meanwhile, more than 13 per cent of milk collected from Austrian farmers is registered as organically produced and the demand is reported to be increasing monthly. Sweden needs to increase its output of bio-milk by around 60 per cent if it is to meet expected local demand of 266 million kilograms by 2011, according to leading Scandinavian processor ARLA.

Nor can we forget the continuing demand for low calorie dairy foods. Last year, this brought the claimed first no-fat Gouda onto the market, a Dutch cheese made in Austria that also contains no lactose and very little cholesterol. 

Dairy products created for younger children have boomed from the start and there's hardly a processor in Europe that doesn't produce school-break milk drinks, fruit yogurts and dairy puddings, joined lately by savoury cheese-based snacks complete with crackers or flavoured dips.

The latest move is to target four-to-seven year olds with their own small portions (100 or 125 grams) of fruit yogurt from organically produced milk, some of them made so that consistency is "non-drip" for safer spooning. All these have such added attractions for the new mini consumers as interactive Internet sites and colouring books.

But getting back to the more spectacular attention-grabbers, how about a dairy product from Austria marrying creamy Alpine cheese and raw marinated herring from Scandinavia? Delicatessen Hink of Vienna is the creator and the firm adds chopped onions and apples to the blend for good measure. This spring, the price for the fish-cheese-pate was C$36 for 800 grams.

Also mentioned at the beginning was butter with green clover that comes on the market under the Swiss Schabziger label. The flavouring plant is an Alpine biennial often called sweet clover. In the small town of Garus, this is mixed with local butter or cheese to make a very special green dairy product. It's by no means new in Switzerland, and often termed the oldest branded grocery product in the land. But it is only now being hailed as something very special by gourmets in other European lands who have just discovered it.

And, just to finish off with, here's another innovative idea featuring cheese in Europe. In Italy's Emilia Romagna region, the local banks accept 40-kilogram rounds of high quality Parmesan as security against business loans by the cheese makers.

One of the largest banks, Credit Emiliano, claimed this fall to have some 400,000 rounds of Parmesan in its own specially-built cool house with each 40-kilogram round worth slightly over C$460 wholesale. The system was established to help cheese makers keep financially liquid over the minimum two-year maturing time for good Parmesan. The banks say they are happy to have security that is worth more month-by-month. BF

Norman Dunn writes about European agriculture from Germany.