Ornua on Glanbia’s US venture: ‘We fundamentally disagree’

Concerns have been raised over whether Glanbia’s new US brand Truly Grass Fed will “erode value” for Irish farmers by the CEO of Ornua, John Jordan.

Jordan was speaking at the 42nd Irish Co-operative Organisation Society (ICOS) National Conference in Naas, Co. Kildare, earlier today (Thursday, November 8).

The Ornua CEO was reacting to Glanbia’s assertion that its Truly Grass Fed (TGF) brand will not be under-cutting Kerrygold on price in the US cheese market.

Also Read: Agri stakeholders clash following US dairy venture

Commenting on the matter, Jordan said: “Truly Grass Fed from Glanbia’s position has a very nice story to it – in terms of they believe there is an opportunity in the market outside of the Kerrygold brand.

“We would fundamentally disagree with that. The fact is, despite how that story is constructed, Truly Grass Fed is in the mainstream retailers.

It’s on the shelf beside Kerrygold, next to it and it is retailing at a discount to Kerrygold.

“Our concern is that that is going to erode value for the Irish dairy industry and for Irish farmers,” he said.

Glanbia position

Glanbia Ireland has previously responded to concerns voiced by both the Irish Farmers’ Association (IFA) and ICOS on the matter.

A Glanbia spokesman said: “The Truly Grass Fed brand is not a direct competitor of Kerrygold – it’s targeted at a growing niche of informed consumers seeking verifiable claims on their food labels.”

Glanbia Ireland also pointed out that, after it identified the market opportunity for a new ‘Grass Fed’ range, it initially approached Ornua with a view to offering it through its marketing structure.

The Glanbia spokesman said that one needs to look at this opportunity from a global dairy market perspective and see how the total sales of Irish dairy products can be grown in value-added markets for the benefit of Irish dairy farmers.

It is important to note that the total US cheese market is worth $15.3 billion per annum, he said.

As its largest shareholder Glanbia is and will continue to be a strong supporter of Ornua and Kerrygold – but our farmers have invested heavily in their farms and we need to maximise returns from the market for their growing milk volumes.

“This will require targeting multiple market niches, of which the natural category in the US is just one,” he said.