Kerrygold butter has been the flagship product for Ornua since its launch in Germany in 1973.
While the brand was originally launched on the UK market in 1962, its real success was in Germany and today it’s the number one brand of butter in that market.
Now Ornua, formerly the Irish Dairy Board, which handles 60% of Ireland’s dairy produce, is looking to leverage the Kerrygold brand through ‘brand stretching’.
At the moment Ornua spends 15% of turnover on new product development, but says it will increase this further to in excess of 20%.
“We have a very strong investment with Moorepark, Fermoy,” Ornua CEO, Kevin Lane says.
We hope to bring new products to market in 2015 and 2016.
He also said Ornua is investing very heavily in its key brands and plans on ‘stretching’ the brands into different categories.
He cited Germany, with the flagship of Kerrygold butter brand now including Kerrygold cheeses, while Ornua has ambitions to put a third category of a ‘fresh’ product on Germany shelves in the autumn of 2015.
While not divulging the details of the new product, he did confirm that it would be manufactured in Ireland. Ornua has also, in 2014, invested €14m in a new storage, packing and new product development facilities in Germany.
Between 2013 and 2014, Ornua saw sales in the EU increase from 16% to now represent some 27% of its overall sales. This growth, according to Lane, was through the extension of the Kerrygold brand, in particular, into new categories.
The second driver of growth in Europe was through acquisitions in Spain and the UK, he said.
“We’re fortunate that the EU is back in growth again. A lot of commentators had the EU pegged for 1% growth for the next few years, but we’re doing significantly better than that.”
Kerrygold Cream Liqueur
Stretching the Kerrygold brand into other categories will also happen in the UK and the US, he said.
Its liqueur is currently only on sale in the US, initially launched in Florida and Illinois in 2014. It has since been introduced into six other states.
Lane said that the traction in the first two US states meant it could be launched in other states. The US is the largest cream liqueur market in the world and Lane says he’s confident it will not only be a success in the US, but elsewhere.
“It will stay in the States for a period of time until we are sure it has global leverage.
Ornua, he said, will further expand the brand with different sizes and flavours after the product has established itself.
Africa
Ornua, according to Lane, is about to build “serious traction” with its products in Africa.
It has invested heavily in the continent, but sales fell in 2014, however he says 2015 will be a different story.
“We have seen very significant growth in Africa, albeit it from a very small base. And we are investing heavily in the continent.
“We are confident for the future. We didn’t see a lot of growth in 2014 but we are saying there will be a decent uptake this year and we see it as a three-to-five year investment.”