ROMANIA – French dairy group Danone has invested €3 million (US$3.3m) in setting up a new product line at its Bucharest factory, southern Romania that will see the company introduce bio dairy products in the market.

Danone is scheduled to begin production of the products at the site by the end of October, reports Ziarul Financiar.

Natalia Gelshtein-Kiss, general manager of Danone in Romania, Bulgaria and the Adriatic countries says that the company sees potential in local market, marking a ‘ripe moment’ for the investment.

“The bio market segment started to develop about three years ago and has reached about 5% of the local dairy market, Natalia said.

“We know that it’s important for Romanians to have local products and we decided that if we wanted to be present on the bio segment we need to make the products here.”

According to Natalia, the growth of the fast moving consumer goods segment and and the yogurt consumption in the last two years further presents the market’s growth potential in the following years.

Danone Romania is one of the biggest dairy producers in the country producing over one million yogurts a day and over 60 million liters of milk each year at its factory in Bucharest.

The company, among other international dairy companies, have progressively increased their foothold in the country’s dairy market ranking above domestic players in 2018.

The companies’ success has been partly attributed to expansion of distribution and easier access to the shelves of modern retailers in addition to adoption of domestic varieties in their portfolios.

However, the Romanian dairy sector has experienced turbulence in recent years characterized by the abolishment of the milk quotas in the European Union, unfavorable weather conditions and the impact of the Russian embargo are ongoing challenges,

The European Dairy Association says that there are opportunities for growth noting that research and innovation are key priorities that dairy companies should focus on in order to drive growth in the sector.