BEIRUT: In a retail market rife with bad news and even gloomier forecasts, Lebanon’s dairy industry is a rare bright spot.
While other local food manufacturers are coping with the disruptive side effects of political turmoil and regional conflicts, the industry is thriving and demand for milk products continues to grow amid the economic morass, according to three of the four largest dairies in Lebanon.
In fact, the biggest threat facing the nation’s top dairies seems to be fierce competition for a limited consumer base and scarce refrigerator retail space.
“We’re definitely working within the Lebanese economy so we feel some of the negative effects,” said Ziad Atik, the sales general manager of Taanayel Les Fermes, which controls an estimated 50 to 60 percent of Lebanon’s dairy market, if you’re judging based on the brand’s presence in the nation’s major supermarkets.
“Whenever there is tension [our] sales might be affected less than others because it’s a primary item. Plus, if something bad happens people stay home and what do they do? They eat.”
In the past eight years, Taanayel’s sales volume has increased by 450 percent, he said: “The two major reasons are because we had a restructuring at the management level and we were very aggressive in the market. On the other end, we’ve introduced new lines to compliment the basics like labneh, laban and cheese.”
These include fruit yogurts, refrigerated deserts, and the Le Glaces ice cream, alongside daily staples with longer shelf lives such as Taanayel’s UHT long-life line.
Dairy Khoury, which has the second largest market share, followed by Libanlait and Dairiday, saw sales increase 40 percent between 2011 and 2012 thanks to a country-wide rise in dairy consumption, administrative manager Rafic Khoury said. Like the other major players in the field, the 16-year-old company has been diversifying its product line beyond traditional cow’s milk goods to appeal to more sophisticated tastes. Khoury is now in the process of developing a line of goat cheese, alongside a new type of HT milk with a shelf of life of six months, which will hit the market in two months.
Dairiday also reported a 38 percent increase in sales between 2011 and 2012, which sales manager Pierre Abou Kheir attributes to an increase in the company’s marketing budget and the rollout of a major billboard campaign: “The Lebanese market is very squeezed and you have competition in all brands, so you have to develop new products to differentiate yourself from the others.”
To this end, Dairiday has launched a new line of probiotics and will begin selling fruit yogurts soon to compete with Taanayel. But competition is fiercest for basics, such as laban and labneh, which are the fastest-growing market segment for Dairiday and the best-selling dairy products overall nationally, Kheir said.
These cow’s milk staples must not only compete with the four major brands for coveted refrigerator space – Taanayel said its laban was currently the best-selling brand in the country – but with products from the estimated 200 mom-and-pop dairies scattered across the country.
While domestic demand for dairy appears to be impervious to political turmoil, the size of the Lebanese market is so limited that all the major dairies in Lebanon upped advertising spending in 2012, Kheir said – save for Libanlait, which was the only member of the leading dairy quartet not present at this year’s HORECA convention.
Meanwhile, Lebanon’s fourth most popular dairy brand is also in the midst of a restructuring and is currently recruiting new sales personnel.
For the moment, the rest of the market appears to be following Taanayel’s lead by rolling out specialized yogurt and ice cream lines. Taanayel, meanwhile, must battle with international brands like Haagen-Dazs and Dannon for key supermarket accounts. So far, they are faring well. Trade statistics show that Taanayel’s yogurt has gained a 45 percent market share since it was unveiled two years ago.