GERMANY – Swiss multinational dairy company, Emmi has decided to put an end to the distribution of the Onken brand in Germany, effective this summer (end of June).
Emmi is taking this move citing a lack of growth prospects in the highly competitive German market for yogurt and quark, as well as due to the inadequate earnings situation aggravated by persistently rising input costs.
Emmi has said it is increasing its focus on profitable growth segments such as ready-to-drink coffee with Emmi Caffè Latte and specialty cheese with Emmi Kaltbach.
Another contributing factor to the decision is the high energy intensity of the existing plants and the replacement investments pending as part of contract production.
Although it is discontinuing the distribution of brand in Germany, Emmi Group will continue to hold Onken’s brand rights in Germany and in the UK where the brand is well-positioned and will not be affected by the move.
Onken brand’s exit from Germany comes at a time the yogurt category is projected to rise by a compound annual growth rate of 1.9% to reach US$3.47 billion by 2025, according to research published by GlobalData.
The yogurt value inched up from US$3.01billion in 2015 to US$3.15billion in 2020, registering a CAGR of 0.5%.
The growth is attributed to the growing preference for yogurt-based drinks over sugar-loaded variants available in the market due to awareness of lifestyle disorders such as obesity and diabetes.
Moreover, widespread consumption of yogurt or yogurt-based products among the older generation coupled with the rising popularity of low-fat Greek yogurt among consumers due to its low calorific value and the health benefits associated with the consumption of yogurt is anticipated to drive the growth of the market during the forecast period.
The data and analytics group estimated Onken had a market share of 0.7% in Germany’s yogurt category in 2020, ranking 17th on a list headed by FrieslandCampina’s Landliebe.
In 2021, Emmi Group generated US$661.9million in sales in Europe, up 5% from 2020, with net sales of US$3.92billion, 5.6% higher than in 2020.
In Germany, the company’s assets include the organic dairy business Gläserne Molkerei, in which it first invested in 2014 and again two years later.
It acquired the Onken brand in 2010 from German food group Dr Oetker when it was ranked number one in the UK market and number three in the German market.
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