ndc annual review 2010 & 2011 plan

I’m behind our local dairy farmers

Are you?Always choose milk & cream

with the NDC mark

www.ndc.ie

Annual Review 2010 & 2011 Plan

Dairy: Food for Life

3

Dairy: Food for Life Annual Review 2010 & 2011 Plan

Annual Review 2010 & 2011 Plan

Dairy: Food for Life

The National Dairy CouncilInnovation House, 3 Arkle Road, Sandyford, Dublin 18,Ireland Tel: +353 (0)1 290 2451 Fax: +353 (0)1 290 2452 E: [email protected]: www.ndc.ie

© National Dairy Council (NDC) 2011. All rights reserved. No part of this publication may be reproduced without prior permission from the NDC. The NDC has made all reasonable efforts to ensure the accuracy of information presented in this document, but can accept no responsibility for omissions or errors.

Published by IFP Media, 31 Deansgrange Road, Blackrock, Co Dublin www.ifpmedia com

Contents

Chairman’s Statement 4

Chief Executive’s Statement 5

International Dairy Market Review 2010 and Outlook 2011 8

Irish Market Review 2010 and Outlook 2011 11

Advocacy & Communications Programme 14

Marketing & Promotion Programme 16

School Milk & Dairy Programme 19

Milk It For All It’s Worth Programme 22

Issues Management and Nutrition Programmes 24

Accountability & Corporate Governance Programme 26

2011 Programme Plan 27

NDC Board, Sub-Committees and Staff Members 28

4


To describe 2010 as a year of two halves might seem an exaggeration to some, but it was certainly one that began and ended on different notes for the Irish dairy industry. While conditions remain challenging for farm families and milk processors, improved prices internationally brought a welcome rebound in confidence and pointed the way towards recovery and growth. The volatility in international prices that caused such difficulties in 2008-2009 may not have disappeared, but it is hoped that the dairy industry is at last beginning to benefit from long-term, sustainable opportunities in the world marketplace.

Domestically, the pressures of a recessionary environment continued as consumers remained acutely price conscious throughout the year. Initiatives such as the Farmed in the Republic of Ireland trade mark played a significant role in meeting consumer demand for clarity in the area of provenance and the National Dairy Council (NDC) is proud of the role it has played in strengthening the relationship between consumers and the dairy industry.

In the context of ongoing economic challenge, the NDC believes all our outputs must deliver definable value to the industry we serve. Across many fronts, 2010 was a year of fruition for the NDC. Our five-year strategy, Dairy: Food for Life, introduced in 2008, has provided a platform for a range of ambitious and innovative programmes. In 2010, the strategy reached its midpoint confidently and assuredly. Building on the success of the Farmed in the Republic of Ireland trade mark, 2010 saw the NDC extend its promotional strategies to cheese and butter for the first time. Notwithstanding the budgetary constraints of a small organisation, we will continue to deliver excellence over the coming year and insist that our actions be measurable and evaluated in terms of value for money and impact.

The NDC’s determination to deliver change could not happen without the support of the dairy farmers and member co-ops who fund our work. For their commitment to sustaining this culture of achievement, I offer sincere thanks. The NDC is also fortunate to have, within its Board and Sub-Committees, individuals who make exceptional expertise and knowledge of the dairy industry available to it. Elections this year brought new members on board.

As we warmly welcome them, we thank all those who have served on behalf of the NDC for their unstinting commitment to our industry. On behalf of all the Board, I would also like to express my sincere gratitude to departing CEO, Helen Brophy and wish her every success in the future. I also wish to thank all the staff of the NDC. The culture of achievement sustained throughout 2010 is largely attributable to this hardworking and dedicated team of professionals.

All of us share the hope that the recovery of confidence witnessed in 2010 will point the way to a sustainable future for the Irish dairy industry, both nationally and internationally. I am proud to be part of an organisation that can be said to deliver a world-class service, a fact now widely acknowledged across the industry and beyond. The NDC will continue to advance the message to consumers in the Republic of Ireland that the consumption of our milk and dairy products is central to a balanced diet and healthy living.

Dominic CroninChairmanThe National Dairy Council

Chairman’s Statement

5


A year that saw stability return to international commodity prices, 2010 brought welcome relief to Irish dairy farmers as milk prices edged towards a point where they could provide the basis for sustainable production in the future. While the vagaries of the international marketplace cannot be discounted, prospects over the short-to-medium term continue to look promising. The improvement in milk prices, albeit from a low base, did not happen in isolation and was reflected in a more robust commodity market generally. This, in turn, led to improved export performances across Irish agrifood in 2010.

Amid ongoing difficulties in the broader economy, Irish agriculture is now accepted as having a pivotal role in our export-led recovery and it is to be hoped that this recognition will be matched by renewed commitment to the sector in Government strategies for recovery, growth and employment.

On the domestic front, it remained a year of challenge for the industry as retailers and foodservice providers continued to put pressure on supplier margins and discounting remained a prominent promotional tool. Against this backdrop, 2010 was a significant year for the National Dairy Council (NDC) and I concur with the Chairman’s view that it represented a year of fruition on many fronts. The NDC confidently extended the scope of its marketing and promotional remit, while sustaining the significant momentum of initiatives already underway. At a time of unprecedented economic challenge, the organisation has sought to support stakeholders through activities that deliver measurably positive outcomes on behalf of the dairy industry.

The Annual Review 2010 & 2011 Plan provides an opportunity to reflect on progress and to give a sense of the strategic purpose and commitment that underwrites our work. As outlined here, the NDC operates six programmes as part of Dairy: Food for Life. In a year of

intense activity, each programme played its part in helping us meet our objectives.

• Advocacy&CommunicationsProgramme• Marketing&PromotionProgramme• SchoolMilk&DairyProgramme• IssuesManagementandNutritionProgrammes• Accountability&CorporateGovernanceProgramme The NDC-led Milk It For All It’s Worth marketing initiative, developed in association with our partners in Britain and Northern Ireland, and for which funding was secured from the EU and the Department of Agriculture, Fisheries and Food can be regarded as an additional programme which complements our marketing and promotion work.

Marketing & Promotion Programme

Marketing&Promotionpresents,inmanyways,the‘publicface’ofthe NDC, involving national media campaigns to meet its ambitious goals.

At the start of the year, the Farmed in the Republic of Ireland trade mark was still in the first weeks of its launch but, thanks to a high-impact advertising campaign, had already secured national recognition.WithPaulO’Connellasitsleadambassador,thecampaign enjoyed a further 32-week run during 2010, and evaluations in January and, later, in October confirmed positive results across a range of key metrics. These are outlined in more detail on pages 16-17.

For industry, arguably the most positive finding was the role the trade mark has played in foodservice and retail contracts won by NDC members. In June 2010, a foodservice marketing programme

Chief Executive’s Statement

Dairy: Food for Life: Year Three in Review

6


was specifically developed with a certificate of origin for use in customer premises. This will be developed further in 2011.

Following the establishment of an industry working group on butter and cheese, the NDC initiated successful promotional campaigns for both categories in 2010. For butter, the focus was on convenience and versatility, with a print advertising campaign, running initially from June to October, highlighting traditional uses on toast and bakedpotatoes.‘CheesyMoments–What’sYours?’focusedontheversatility and convenience of cheddar and on extending its usage occasions. This intensive three-week campaign brought the seven brands of Irish cheddar (Avonmore, Charleville, Dubliner, Killowen, Kilmeaden, LowLow and Wexford) together for the first time in a campaign that was largely outdoor focused but also included press, national and local radio, and online advertising. Initial evaluations of the two campaigns confirmed positive outcomes for each.

TheNDC’spresenceattheNationalPloughingChampionships,the Tullamore Show and the National Dairy Show proved extremely successfulin2010,asdidsponsorshipoftheWomen&AgricultureConference.

Advocacy & Communications Programme

Within this programme, the NDC engages directly with a variety ofstakeholders.TheestablishmentoftheScientific,Nutrition&Technical Committee (SNT) provided an important resource in guiding communications throughout 2010.

Establishedin2009,theNDCQualityMilkAwardsattractedanexceptional field of entrants in 2010. A total of 11 finalists were shortlisted, representing eight co-ops. Congratulations to overall winners, Kevin and John Walsh, Dungarvan, who are manufacturing suppliers to Glanbia and to runners up, Robert and Shirley Shannon, who supply Lisavaird Co-op. The calibre of our judging panel, which includesJackKennedy,DrDavidGleesonandProf.PaddyWall,hasundoubtedly contributed to the status the awards enjoy.

The NDC’s collaboration with the Irish Osteoporosis Society (IOS) continuedin2010asthenowannualPancakeTuesdaypromotion,with the support of RTÉ’s Ryan Tubridy, gained widespread media coverage. The Milk It For All It’s Worth programme has also provided opportunities for collaboration with the IOS. The NDC and IOS have planned 40 osteoporosis-focused seminars over the three-year duration of Milk It For All It’s Worth. These seminars commenced in winter 2010, with positive feedback, to date, from attendees.

The development of the NDC’s Dairy Den has been a particular success, focusing on the needs of children from infancy to the teenage years. In 2010, new booklets on weaning and pre-school nutrition were launched.

ThesuccessoftheHealth&WellbeingEveningscontinuedtosurpass expectations in 2010, with events held in Donegal, Cork, Kilkenny and Sligo, in conjunction with four dairies. The NDC looks forward to more of these events in 2011 in conjunction with member co-ops.

Communicating both to health professionals and those in their care isanongoingpriorityfortheHealth&Wellbeingprogramme.Bytheendof2010,80%ofGPsurgeriesnationwidestockedNDCmaterial with up-to-date science-based information on nutrition and balanced diets. Three editions of the health professional newsletter DN Forum were also produced in 2010 and distributed to 3,500 GPsandover1,200dietitiansandpublichealthnursesnationwide.Recognising the need for easy access to science-based information, NDC’s online electronic nutrition library was launched and will be developed into a major resource for all Irish health professionals.

The NDC continued to build international links and alliances throughinvolvementintheGlobalDairyPlatform,theEuropeanDairyMarketingForumandtheUtrechtGroup.ParticipationintheEuropeanDairyMarketingForumprovedparticularlysignificantin 2010 and a pan-European campaign to promote the nutrient richness of milk and dairy products is now in the pipeline. Seven countries are involved in the initiative, with a submission for EU funding made in November 2010. A similar approach linking the NDCwiththeDairyCouncilsofNorthernIrelandandEngland&Wales has already borne fruit in Milk It For All It’s Worth.

School Milk & Dairy Programme

There is, arguably, no more important consumer demographic to the Irish dairy industry than primary and secondary school pupils and the NDC’s investment of resources has this long-term relationship in mind. The planning, development and launch of the Fresh Milk Club brand in primary schools was one of the NDC’s key undertakings over the last year and led directly to 4,840 new pupils and 90 new schoolsjoiningtheProgrammeinthe2009/2010schoolyear.Afurther39primaryschoolsjoinedinthe2010/2011year,signallingtheProgramme’scontinuedappeal.

In 2010, secondary schools were targeted through promotional initiatives that drew on the learnings of the pilot programme undertaken in 2009. In all, some 34 new secondary schools joined theSchoolMilk&DairyProgramme.Althoughlowerthanhopedfor, it reflects longer lead-in times in the secondary school system and more complex decision-making processes.

The NDC Milk It Advertising Awards, introduced in 2010, proved a highly successful initiative in reaching out to teenage audiences. Students were challenged to research, create and plan an advertising campaign aimed at encouraging their peers to reach their targeted daily allowance of five dairy portions a day. To date, over a third of all secondary schools nationally have registered to participate, well above the initial target of 10%, and all 26 counties are represented. At a gala event in April 2011, 12 short-listed finalists will pitch their campaigns to an expert panel of judges with the national winner chosen on the day.

Building the link between dairy and sport, the NDC continued to work closely with the FAI on the school liaison programme. Over fifty visits took place in 2010, with the focus on primary schools interestedinjoiningtheSchoolMilk&DairyProgramme.

Issues Management and Nutrition Programmes

TheIssuesManagementandNutritionProgrammesunderpinallNDC advocacy and communication work and operate with three key audiences in mind: health professionals, consumers and industry. ThedevelopmentofanIssuesManagementManualhasbeenapriorityfortheNDCsinceitestablishedtheIssuesManagementCommittee in 2008. In 2010, work on the manual continued and was made available through the members-only online portal of the NDC website. Recognising that issues management must always be abreast of the latest developments, the NDC will continue to compile, format and update areas of priority as they emerge and will communicate findings to industry with a view to assisting members prepare for, or pre-empt, issues effectively. The establishment of the SNT committee has also strengthened the knowledge base of the NDC with regard to issues management.

During 2010, the NDC has continued to strengthen relationships witharangeoforganisations,includingTeagascMooreparkandthe Food Safety Authority of Ireland. Since 2008, the NDC has provided support to members on the complex subject of nutrition and health claims for dairy products. The NDC will continue to

7


workinthisareaand,inMay2010,participatedintheFSAIHealthClaims Seminar in Dublin. It is also necessary to monitor and review the new broadcasting legislation, which may have implications for the advertising of foods containing saturated fat, with potentially unfair consequences for cheese producers. The forthcoming dietary guidelines from the Government will also need to be monitored and interpreted in the context of dairy.

In 2010, the NDC’s e-library was further developed into what, it is hoped, will ultimately become the first port of call for the sector when seeking reliable information online. DN Forum has also proven to be a significant resource in this regard, offering health professionals easy access to the latest international research on dairy-related nutrition.

Accountability & Corporate Governance Programme

Accountability&CorporateGovernancehasbeenapriorityprogramme for the NDC since the implementation of Dairy: Food for Life and remains particularly significant given that stakeholder expectations of value for money are higher than ever. TheestablishmentoftheAccountability&CorporateGovernanceBoard Sub-Committee in 2008 was an important step forward in underwriting the NDC’s priorities of transparency and integrity over the longer term. The NDC engaged in a cost-efficiency review in late 2009 that delivered benefits in the overall running of the organisation throughout 2010. Considerable time is given to budgetary pre-planning across all programmes to ensure objectives are realistic and attainable from a cost perspective. The decision to relocate to offices in Sandyford Industrial Estate in August was important in this regard and the NDC is confident that the new premises reflect the ambitions of a confident, forward-thinking organisation.

With regard to membership, the NDC was delighted with the decision of Connacht Gold to rejoin the organisation fully in 2010. In addition, Lisavaird Co-op has agreed to become a new co-operative member of the NDC from 2011 onwards.

The Board election process commenced in the first quarter of the year and the NDC welcomes new Board members and notes the high level of interest expressed in the election process.

Milk It For All It’s Worth

Milk It For All It’s Worth is a three-year programme targeting the 11-20-year-old age group and designed to build the association between milk, dairy and sport. The first phase of the programme was officially launched in October 2010 and, in a six-month period, saw over €230,000 in direct media spend through radio and national print, as wellasdigitalonlineadvertisingonMSN,YouTubeandFacebook.The youth oriented www.milkitforallitsworth.ie website is also an important component in this strategy.

PreparationsforthelaunchofMilk It For All It’s Worth began in earnest in January 2010 with several meetings of the project partners: the NDC, the Dairy Council for Northern Ireland and The Dairy Council(GB).Inmid-April,‘Milk It For All It’s Worth’ was agreed as the campaign headline and international soccer player Kevin Doyle was brought on board as the first ambassador. Supporting the launch, the NDC organised its first seminar for fitness professionals at The HelixatDCU,chairedbyProf.MoiraO’Brien,PresidentoftheIOS.

The event attracted fitness professionals, sports coaches, trainers, dietitians and other heath professionals. As part of the Milk It For All It’s Worth programme, the NDC and IOS plan to host 40 osteoporosis-focused seminars over the course of the three-year

programme, with the first two of these held in late 2010. The launch period was further supported by a special media event at Wimbledon in which Irish and UK health and fitness writers were given access tothisexclusivevenue,whichisnotopentothepublic.Prof.RonMaughan,ChairofSportsNutritionatLoughboroughUniversity,wasakeyspeakerattheevent,alongsideWendyMartinson,SportPerformanceNutritionistfortheBritishOlympicAssociation.In 2011, Milk It For All It’s Worth will see the publication of two information guides, the first for the 11-20-year-old age group and the second specifically for women in the 20-35-year-old age group. In addition, the first edition of a newsletter for sports professionals will be published in early 2011.

Conclusion

Looking to 2011, the overall objective for the NDC is to continue to drive and stimulate the domestic consumption of Irish milk and dairy products in accordance with the six objectives of the NDC strategy. Credibility is a value every organisation aspires to, but is perhaps only truly measurable in times of challenge. In what have been some of the toughest years on record for the Irish dairy industry, one of the goals of the Annual Review 2010 & 2011 Plan is to confirm the NDC as an organisation that has gained the trust andconfidenceofitstwokeystakeholders–thefarmingcommunity,who fund its work, and the general public, on whom the strength and ongoing success of the Irish dairy industry is dependent. For this achievement, the exceptional commitment of our staff, the Board and Sub-Committees of the NDC must be acknowledged.

In mid-April 2011, my own involvement with the NDC will come to a close as I depart the position of CEO to take up a new role in the agri-food industry. The last three years have been an extraordinary journey, both professionally and personally. I am grateful for the confidence shown in me by the Chairman and the Board of the NDC from the beginning, as well as the unstinting dedication of my team, who, in implementing the ambitious Dairy: Food for Life programme, have repaid every confidence invested in them. Collectively, I believe we have reshaped the organisation into one that is fit for purpose for these challenging times and forged a new and enduring relationship with consumers. I am proud of the NDC’s many achievements since 2007 and I have no doubt it will continue to sustain this level of progress in the years ahead. I wish the new CEO every success in their role in the years ahead.

Helen BrophyChief ExecutiveNational Dairy Council

8


Key Features of International Supply and Demand

The first half of 2010 was characterised by a supply-driven price recovery in world markets. This was brought about by a combination ofweatherfactors,abadwinter/latespringinEurope,abadfinishto the season in Oceania and a fall in milk production in response to the low prices experienced in 2009. The EU Commission and other holders of public stocks were very mindful that too-ambitious a stock release might kill off a recovery and so stock releases were minimal. However, the second half of 2010 saw milk production increase again in response to the stronger prices on offer and the EU began to release intervention stocks (for internal EU use only), with the combined effect bringing some downward pressure on price over the period July to August. In the final quarter of 2010, prices strengthened again as the effects of drought in Russia triggered extensive buying from that country. This vigorous buying by Russia, plus a vigorous resumption of Chinese purchases, maintained world market prices in the latter part of 2010.

$1,400

$1,900

$2,400

$2,900

$3,400

$3,900

$4,400

$4,900

$5,400

$5,900

Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11

ButterCheddarSMPWMP

500 $3,500

400

300

200

100

0

$3,000

$2,500

$2,000

$1,500

$1,000

65

2005

74

2006

59

2007

46

2008

177

2009

320

2010

400

2011

WMP imports GDP/Capita

1,00

tons

$GD

P/ca

pita

-9

-6

-3

0

3

6

9

12

15

New Zealand*

Australia

**

Argentin

aBrazil EU

USA

20072008200920102011

Figure 1: Commodity price trend over the period 2006 to 2010 ($/ton)Source: USDA

The last five years have clearly demonstrated the volatility in the global dairy market. This volatility reflects the behaviour of a deregulated market where market demand and weather-event-related peaks in supply and demand are combined with the run down of market-support measures historically deployed in the US and EU. While prices in 2010 did not quite reach the peaks of 2008-2010, returns were improved by lower feed costs.

By the end of 2010, however, feed costs, driven primarily by poor harvests in Russia and China, were on the rise. Looking at the past five years, there have clearly been mixed returns with the cyclical

difficulties in 2009 compounded by the impact of the global recession on market demand. In addition to price volatility of input and output costs, there are some notable trends emerging:

• BothFAO/OECDandFAPRIi/USDAareforecastingthatglobaldairy prices have shifted to a higher average trading range.

• Higherdairycommoditypriceshaveimpactedthesupplychainin higher prices at retail and farm-gate.

• Thereisastrongcorrelationbetweeneconomicgrowthinemerging economies in China and India, and growth in global demand for dairy products.

• ProductioninChina,inparticular,willnotincreasetomeetincreased demand.

• Volatilityofinputandoutputpricesremainsakeychallengefordairy stakeholders and policy makers.

Features that Helped Sustain the Price Recovery in 2010

Both Russia and China had a significant role in creating a demand for dairy products on the global market during 2010.

Table 1: Data on the dairy industry in China, units are 1,000 tons

2006 2007 2008 2009 2010 2011 (f)

Milk Production 31,934 35,252 34,300 28,445 29,100 30,500

WMP Production 1,030 1,150 1,120 977 1,000 1,050

WMP Imports 74 59 46 177 320 400

WMP Consumption 1,070 1,137 984 1,154 1,347 1,492

Source: USDA

China has yet to restore internal milk production to the levels of 2007 and, hence, is struggling to recover from the melamine disaster. The gap between production in 2007, and that reported for 2010, is equivalent to the entire Irish milk output. This comparison highlights the challenge facing China.

Given that only 38m tons of milk is traded globally, China is currently taking about 14% of this trade. Increasingly, China is emerging as a major importer of dairy products, easily eclipsing all other major importing markets. This growth in demand is being fuelled by several factors: an expanding population, a steady rise in disposable income, insufficient domestic supplies and food safety concerns over local milk production. China’s need for dairy imports is expected to continue for the foreseeable future. Dairy consumption is still relatively low, for example, per capita consumption is just 20kg

International Dairy Market Review 2010 and Outlook 2011

9


per person per annum, compared with the FAO recommendation of 180kg per person per annum. A focus on raising consumption levels to the FAO targets will stimulate increased demand. The Chinese government is promoting dairy consumption with campaigns such as‘aglassofmilkeverydaycanmakepeoplestronger’.Itisestimatedthat only 300m of the 1.3bn people in China, regularly drink milk. The baby boom in China, with an annual birth rate of 18m babies, will further drive demand growth.

$1,400

$1,900

$2,400

$2,900

$3,400

$3,900

$4,400

$4,900

$5,400

$5,900


ButterCheddarSMPWMP

500 $3,500

400

300

200

100

0

$3,000

$2,500

$2,000

$1,500

$1,000

65

2005

74

2006

59

2007

46

2008

177

2009

320

2010

400

2011


1,00

tons

$GD

P/ca

pita

-9

-6

-3

0

3

6

9

12

15

New Zealand*

Australia

**

Argentin

aBrazil EU

USA

20072008200920102011

Figure 2: Trend for Whole Milk Powder (WMP) imports in ChinaSource: USDA

The melamine scandal of 2008 has eroded confidence in local food safety standards, and damaged the reputation of local producers, with positive implications for imports. The fallout from the melamine crisis has shifted consumer preference to imported dairy products, despite official assurances that domestic supplies are safe. Given the supply disruption due to the melamine incident and demand growth for dairy products at a rate of 6% per annum, China is facing a protracted market deficit. The factors underpinning the major shift in Chinese dairy imports may last longer than previously anticipated.

Russiacontinuestobeamajorimporterofdairyproducts.Milkoutput in Russia fell by close to 1m tons in 2010. A drop of this scale is significant given that the spike in milk prices experienced in 2007 was attributed to a supply shortfall of 3m tons. Swings in local supply such as this have a significant impact on the global market.

Table 2: Data on the dairy industry in Russia (Units are 1,000 tons)

2006 2007 2008 2009 2010 2011(f)

Production 31,100 32,200 32,500 32,600 31,740 31,400

Cheese imports 230 250 340 310 365 370

Butter imports 115 130 150 107 90 90

SMP imports 45 50 75 105 180 180

Source: USDA

Russia is a significant net importer of butter, cheese and skimmed milkpowder(SMP).ThedatainTable2showsasignificantrampupindemandforbothcheeseandSMPduring2010.ThissurgeinimportdemandforcheeseandSMPequatedtoanequivalentmilkvolume of 1.3m tons.

The Impact on Price

The extent to which prices are passed along the supply chain is very significant. The global trade of milk determines the price point. The resulting price is dependent on the balance between the available milk supply and the global demand. Hence, when demand is greater, it becomes a seller’s market with the price rising and, when supply is in excess, then the reverse will happen, with the price collapsing.

On the global market, dairy is typically traded as an ingredient bought by food manufacturers for the production of foods which, in turn, are sold into the retail channel or the foodservice channel. Therefore, food manufacturers in times of inflationary ingredient costs will endeavour to recover any cost increases and, thus, raise prices to their customers. However, customers and consumers are sensitive to price increases and, in time, will reduce their purchases and switch to cheaper substitutes, for example substituting butter withcheapervegetableoils/margarinesorswitchingmilkproteinforvegetable proteins.

This very dynamic is what makes the market so cyclical, with prices eventually reducing to induce customers back into the market. Increasingly, it is becoming noticeable that none of the participants along the supply chain from farm to consumer are insulated from these price fluctuations.

Given the definitive decision by the EU commission to abolish milk quotas, milk supply levels in the EU will better match movements in global supply and demand factors.

The supply of milk will be determined by a number of factors such as:• Anydisruptionstomilksupply,forexampleextremeweather

events such as severe drought or flooding can restrict supply (i.e., Australia and Argentina);

• Adisruptiontomilksupplyduetofoodsafetyissues,forexampleas evidenced with the melamine contamination in China;

• Aplannedcullingofcowsinresponsetoayearoflowmilkprices,a typical mechanism in US to try and restore a balance to the market; and

• Aplannedreductioninyieldpercowthroughreducedfeedingrate, as a reaction to rising bought-in feed costs.

The demand for milk will be affected by factors such as:• Price,ofcriticalimportanceas,whentheproductisexpensive,

demand will drop off;• Disposableincomeandavailablepurchasingpoweramong

consumers; and• Afoodsafetycrisiswilldampenconsumerdemandforthe

product.

Given that 85% of Irish milk output is exported, the behaviour of global markets is of huge importance to Irish milk producers. While the Irish industry is primarily focused on the export ingredients business and is not consumer facing; if consumer prices get expensive on global markets, the purchasing decisions of those consumers will trickle back to local Irish milk prices.

Prospects for 2011

World production of milk has been increasing on a continuous basis and has grown at a rate of at least 10m tons per year in the period

10


1998 to 2007. The view is that global demand for dairy will continue to expand. Therefore, for supply to track the demand growth of 2% per annum, the challenge is to increase global milk output by an amount equivalent to the size of New Zealand every year.

The global dairy market in 2010 returned to an upward growth path, with dairy commodities demonstrating upward trends.The implications of this price recovery and the higher returns will be for milk producers to increase output in 2011. If this expansion in output overshoots the demand which the market can take, thenaperiodofdepressedpricesmayfollow.Pricevolatilitynotwithstanding, a long-term upward trend remains a key factor.

Therefore the questions are: what regions are likely to remain short of milk?;whatregionshavethecapacitytoexpandandhowsignificantwilltheexpansionsbe?;willcownumbersexpandorremainstatic?;andwillyieldpercowincrease?

Other questions affecting the outlook will be: how will grain prices move?;whatwillbetheimpactforbought-infeedcosts?;howlargeareinventories?;andhowwillconsumerincome/purchasingpowerchangeovertheshort-to-mediumterm?

Forecasts

In 2010, dairy farmers expanded production, with the significant dairy regions expanding by 4.8m tons. The forecast is that output could increase by 8m tons in 2011. The USDA is forecasting that farmers in New Zealand will ramp up production by 10%, having been negatively impacted by unfavourable weather in the early part of the 2010 season, so a strong supply recovery is expected in 2011.

In terms of cow numbers, New Zealand could increase the herd by 100,000. In the EU, cow numbers will remain static but an improvement in milk yield may provide a marginal expansion of 0.5%. Argentina is now on the upward curve again following successive years of poor weather and, with export tax restrictions removed, the industry is projected to grow by 4.5%. Expansion in Argentina will be constrained by land use competition, with crop production considered a more attractive enterprise. Australia has finally broken the long running drought and may start rebuilding the

herd again. The USDA has forecast a herd expansion of 20,000 cows in Australia.

The US may deliver a growth level of 1.7% in 2011 with cow numbers increasing marginally by 15,000. The futures market in the US is anticipating a milk price for 2011 similar to 2010. However, the big risk for US producers, as is the case in the EU also, is the costofbought-infeed.Milkpricetofeedpriceratioisakeydriverof milk output in the US, and higher grain and feed costs will lower returns. This is likely to increase cow slaughter and dampen the increase in milk per cow. The indications are that corn and soyabean stocks will end the season at very low levels. It is predicted that corn stocks before the 2011 harvest will only cover 22 days, the lowest level since the 1995-96 crop year. Increases in feed prices may dampen expansion in the US.

There is a possibility that there will be reduced exports from the US due to trade barriers, which may favour EU exports.The value of thedollaragainsttheeuroandNZdollarisakeyfactor.Mexicohasraised tariffs on cheese imports from the US. Russia and Algeria both implemented bans on dairy imports from the US due to unresolved certification issues, while US exports to China may be threatened due to new hygiene certificates from the Chinese authorities.

Signals

Overall, price signals for 2011 remain bright. Demand is expected to remain strong, based on positive projections for income growth levels in Asia and emerging markets. Butter stocks are currently low, hence there is limited stock in the US or Europe to temper any production shortfalls. Butter stocks in the EU are at historically low levels, while US butter stocks are running at 20% below the average levels of the last decade. Butter inventories in the US are currently at their lowest level in five years.

China will underpin prospects for a buoyant market in 2011. The outlook for prices will depend on the extent or frequency with which China and India have to rely on the world market to fulfil local market deficits. The greater the import requirements by China and India, then the more likely the event of a sustained period of high prices to encourage milk production from higher cost regions.

A double-dip US recession still appears unlikely but presents a disconcerting downside risk. While economic prospects appear far more robust in developing countries, consumers in many of them are seeing retail dairy prices on the rise again, which will test local appetites to increase consumption. Rising butterfat prices may stimulate substitution among ingredient users, as they may switch to cheaper vegetable oils. However, import demand is likely to outperform, given economic growth in key milk deficit regions, supply disruptions in Russia and slow progress re-building the milk-supply base in China. If milk production in China comes back in line with needs, then there are some concerns that China could back away from the international market. Given the Chinese consumers’ preference for international dairy brands, post the melamine scare, this seems unlikely.

$1,400

$1,900

$2,400

$2,900

$3,400

$3,900

$4,400

$4,900

$5,400

$5,900


ButterCheddarSMPWMP

500 $3,500

400

300

200

100

0

$3,000

$2,500

$2,000

$1,500

$1,000

65

2005

74

2006

59

2007

46

2008

177

2009

320

2010

400

2011


1,00

tons

$GD

P/ca

pita

-9

-6

-3

0

3

6

9

12

15

New Zealand*

Australia

**

Argentin

aBrazil EU

USA

20072008200920102011

Figure 4: Milk expansion in the main export regionsSource: USDA

11


Irish Market Review 2010and Outlook 2011During 2010, Irish consumers remained under pressure and preoccupied with concerns about the Irish economy, personal debt and job security. Consequently, consumer confidence remained low into 2010 and fell back significantly in the last quarter, with consumers focused on cost savings and continuing to switch to cheaper brands in order to cope with falling disposable incomes and the need to save money where possible.

However,thereissomepositivenews.Pricesshowsignsofhavingstabilised in the last quarter of 2010 with some value growth finally returning to the total grocery market, driven by both volume growth and price increases. Within this, the dairy sector has performed relatively well, with encouraging signs in the last quarter of price stabilisation and a reduction in the amount of promotional activity which was dragging down prices. Discounter retailers and private label continued to grow their share within dairy and particularly attheexpenseofsymbolgroups/forecourtswhohaveseentheirtraditional strength in this sector further eroded.

General Overview

The tentative recovery signs seen in consumer confidence towards the end of 2009, which continued steadily into 2010, disappeared in the last quarter of 2010 because of consumer anxiety about the DecemberbudgetandtheIMFbailout.Attheoutsetof2011,as fiscal austerity measures are implemented and an increasing number of consumers feel that the state of their personal finances will be negatively impacted, and their disposable incomes will fall again significantly, they remain focused on reducing household expenditure. Savings are top of their agenda and more than two in every three say they will continue to switch to cheaper grocery brands and increase their in-home dining and entertainment, in order to try and live within their much restricted budgets. These latter trends support home cooking and meal preparation, which should ultimately benefit the dairy sector.

The Irish grocery market performance during 2010 shows a more encouraging picture compared to 2009. Total grocery market volume grew and, in the last quarter, prices rose for the first time since early 2009; and there was a 5.5% increase in the worth of the grocery sector. The battle for market share among retailers continued with the strongest performance coming from discounters, who grew their share again to 19.5% of grocery market value on average over 2010;upfrom18%onaveragein2009.Multiplesheldtheirown(with a particularly good December), reaching 56.8%, up just slightlyon2009,whilesymbolgroups/forecourtsweretheloserstothe discounters, dropping to just under 24% for 2010, down from 25.4% in 2009.

Figure 1: Total grocery sales divided by channel 2009 vs 2010Source Nielsen Jan 2010

A continuing major trend in the total grocery market during 2010 wasthegrowthofprivatelabel–invaluetermsthisroseto22.7%,which may partly explain the strong performance of multiples. However,thesamecouldnotbesaidofthesymbolgroup/forecourtsector, where increases in private label share from 9.3% to 12.4% did not result in actual market share gain for them. However unlike 2009,thetrendforcrossbordershoppingdramaticallydecreased–the two main Northern Ireland grocery retailers saw their share of the market plummet by 25.5% to 2.1% of the Irish market from 2.9% the previous year.

Dairy Market Overview

The dairy market at retail level (excluding independents and doorstep sales) broadly mirrored total grocery market trends in that it held steady in value terms overall, even showing a small increase of 0.03% on 2009 bringing the total value to €1.04bn in 2010. Furthermore, the last quarter of 2010 saw the first value growth in two years due to the combination of strong volume growth and only a 0.7% decline in prices.

Overall, the dairy sector is showing similar trends to the rest of the grocery market, with volumes growing and prices stabilising, particularly in the last quarter of the year.

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010

Multiples (excluding Dunnes)

Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats

Taste based dairy spreads

Health functional spreads

Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%

Speciality/Skimmed/Flavoured - 10%

Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%

Symbols/Forecourts - 13%

Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 2: Breakdown of Retail Dairy Market in 2010(excluding independent/doorstep sales)

Source Nielsen Jan 2010

Figure 2 shows the value breakdown of the retail market, with milk accountingfor39%,yogurtat24%,thencheeseat20%.Pricesinthe cream and yellow fat sectors, when compared with the annual average rate of inflation of -4.6% for 2010 as published by the CSO, fared best, falling by only 1% and 3.2% respectively. Despite a growth in consumption of milk and other dairy products by 3.2%,

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

12


milk prices fell by 5.5% and cheese prices by nearly 6%, driven by the strong performance of promotional packs, as well as larger, more economical pack sizes. The continued focus by consumers on saving money meant that volume growth did not lead to any strong value growth in the sector in 2010, although the last quarter is more encouraging - especially for yellow fats, which showed significant growth in value of 10.1%.

Althoughthesymbol/forecourtretailers’shareoftheconveniencesector continues to be significantly higher than their share of the overall grocery market, this was further eroded in 2010. This was principally to the benefit of the discounters whose share of the dairy sectorgrewby7%whilesymbol/forecourtretailers’sharedroppedby8% in the same period.

The growing strength of private label in the dairy sector continues, with multiples showing an increase in private label volume of 4%. In thesymbols/forecourts,theextentoftheprivatelabelphenomenonisclear–therewasgrowthof21%invalueand32%involumeforprivate label dairy products. Throughout 2010, private label grew to accountfor18%ofthevalueofalldairysectorsalesthroughsymbol/forecourt outlets.

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 3: Retail Dairy Sales divided by channel in 2010(excluding independent/doorstep sales)


Milk and Cream

According to Nielsen, for the twelve month period to December 2010, total volume of milk sales (excluding Dunnes and doorstep sales) was up 2.4% with value showing a decline of 3.4%. This was an improvement on 2009 figures when volume only grew by 1% and value declined by just under 5%. When the independent and doorstep sales are factored in, the total volume of milk sold at retail level was therefore estimated at 578m litres in 2010.*

Privatelabelwasagainadominantfeatureoftheretailmilkmarketand now holds a 43% share having grown by 5% points from 39% in 2009. In the last two years, private label has gained 10 share points in total. Overall, half the milk retail market sales go through multipleswithdiscountersperformingparticularlystrongly–theirshare is up 9% year on year at the expense of convenience stores, i.e., symbol/forecourtretailers.

In terms of pack size and type, large formats are showing the strongest increases while whole milk is declining at twice the category average and losing share to low fat milk, whose value has risen by a significant 5%, with a strong last quarter lift of 10%, to 26%. Reflecting the harsh economic conditions, and consumers’ ongoing focus on necessities, value-added variants such as fortified and flavoured milk have also seen consumer expenditure drop, by 5% and 22% respectively.

*Source:CSOandNationalMilkAgency.

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 4: Breakdown of milk types within Retail Market 2010(excluding independents/doorstep)


The impact of the changed Irish consumer, their decreased out-of-home dining and corresponding increase in home entertainment, cooking and baking can be seen in the sales of cream which are (excluding doorstep and independents) up 3.5% in value terms according to Nielsen. This is the only dairy category where multiples are growing at a faster rate than discounters, although in 2010 discounters have maintained a strong 14% share. But it is the multiples who are driving the total market increase and now hold 66%ofvaluesales,comparedtosymbol/forecourtretailers’19%,who despite a 2% lift in value during the last quarter of 2010, continue to be the only channel in decline year on year. It is also interesting to note that, while private label performed strongly throughout all of 2010 and held a third or more of steadily growing share, their sales dropped sharply to 26% of market share in the last quarter of the year in favour of a leading Irish brand.

Yellow Fats

The yellow fats market, worth €137.6m in 2010 according to Nielsen, is static in value terms but has increased in volume by 3.3% compared to 2009. In addition, the latter six months of 2010 have shown a strong value increase of 4.3% (higher than the kg increase in the same period), which would suggest that there is less price promotional activity and that prices have been stabilising. Consumption trends within yellow fats demonstrate, to some extent, the unpredictable nature of the consumer, who does not appear to have forsaken taste and authenticity in the interest of cost savings.

Buttershowedgrowth–2%yearonyear,butinthemostrecentquarter of 2010, it was up 15% in value, while in taste-based spreads, theoriginalbrandremainsthemarketleader–althoughforhowlong is the question, given that private label in this sector has gained seven share points over the last two years and is now on par with the branded leader.

Meanwhilethehealth/functionalsectorcontinuedtodeclineanddropped by 7% year on year, again reflecting the harsh economic reality and the consumer’s increasing reluctance to spend even a small premium for added value. Cooking fats, in line with the increased trend towards home cooking, performed well, while overall, discounters made strong inroads, growing their share of this market sector by 15.5% at the expense of all other channels, not just the symbol/forecourtretailers,whohavenotsufferedasmuchhereasinother dairy product categories.

13


0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 6: Total Yellow Fat sales divided by channel 2009 vs 2010Source Nielsen Jan 2010

Cheese

Unlike 2009, when it declined by 5.2%, the value of the cheese market was static in 2010. It also enjoyed a sizeable growth in volume of 6% year on year. However, this did not benefit processed cheese, sales of which continued to decline, as did speciality cheeses, perhaps in line with shrinking incomes and more frugal shopping. Processedcheesehasjust24%ofthemarketnowwhilenaturalcheese continues to grow, up 5% year on year. Grated cheese, perhaps supported by promotional activity, recovered from its dip lastyear,showinga9%increase–possiblybecauseofitsrelevancetohome cooking and school lunch sandwich preparation, which have both increased.

The discounters have a particular strength in this market, now holding a 23% share, which is considerably stronger than their overall grocery market share of 19.5%. In the last year, they have beengainingsharefromsymbol/forecourtretailers.Privatelabelcontinues to grow, at a slower rate than recently, to 42% of the cheese market. A final observation, worth noting, is that cottage cheeseandpic‘n’mixaredoingwell,withstronggrowthovertheyear,albeit from a small base and, again, reflecting the increased emphasis on self-catering even when out of the home, during the working day, in order to save money during these recessionary times.

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 7: Breakdown of Cheese Types within Retail Market 2010Source Nielsen Jan 2010

Yogurt

The yogurt market has dropped in value by just under 5% in 2010 to €253m, according to Nielsen. This swing indicates an increase in promotional activity, particularly in the first half of 2010 as this was when the majority of the value decline took place and there were corresponding lifts in volume. At this stage, this market is dominated by the multiples who hold a strong share of 72%, well ahead of their overall grocery market performance. However, the discounters have a strong 15% share of the market and are the only channel in year-on -year growth. Furthermore, their share is increasing at the same rate that the share of multiples is decreasing, while symbol groups and forecourts are collectively experiencing significant declines of more than four times the total market decline.

It is clear that consumers have a high level of commitment to brands in this category (although this may also be driven by its particularly competitive environment and large number of brands with more or less equal shares). Nevertheless, private label’s share is comparatively low at only 18%, down a percentage point in the last quarter of the year, while the rest of the market has been more or less steadily shared in unchanging proportions by nine or so key brands, many of whom promote particularly aggressively in order to protect and maintain share.

0

10

20

30

40

50

60

70

80

90

100

25.4

18

56.5

2009

23.7

19.5

56.8

2010


Cream - 4%

Milk - 39%

Yogurt- 24%

Cheese- 20%

Yellow fats- 13%

Discounters

Symbols/Forecourts

0

25

50

75

100

30

34

5

2009

33

30

5

31 32

2010

Cooking fats



Butter

Whole Milk - 56%

Low Fat - 26%

Forti�ed - 8%


Natural - 60%

Processed - 24%

Speciality - 15%

Cottage - 1%

Discounters - 15%


Multiples - 72%

Discounters - 12%


Multiples - 60%

Figure 8: Retail Yogurt Sales divided by channel in 2010Source Nielsen Jan 2010

Outlook

As predicted, the dairy category has held its own in a very tough marketin2010.Pricesareexpectedtostabilisein2011astheyarenow trending well in this direction, especially during the last half of 2010.Milkdeclinedinvalueovertheyear,partlyduetoanincreasein demand for larger and proportionately cheaper pack sizes, as did yogurt, due mostly to promotional activity, but trends on pricing in these markets are more encouraging recently. Consumption remains strong, particularly in the cheese sector. If trends continue as forecast, 2011 should be a good year for the dairy industry, as prices stabilise and market values grow, fuelled by strong volume gains.

However, with disposable incomes falling significantly at the outset of 2011 as fiscal austerity measures are implemented, consumer spending is currently forecast to fall by about 2.2% this year. Thus,decliningand/orstaticincomesandunemploymentwillcontinue to hold down consumption during 2011. But good consumption trends and price stabilisation suggest a recovery, albeit a slow one, and, therefore, an increase of just 0.2% for the dairy market in 2011 is projected.

14


Advocacy and communications are frequently two sides of the same coin: there can be no advocacy without trust in communications and,similarly,nocommunicationofvaluewithoutaclear‘calltoaction’ for consumers.

The Dairy: Food for Life strategy set out to ensure the organisation is sufficiently resourced to communicate science-based information toitstargetaudiences.TheScientific,Nutrition&TechnicalCommittee (SNT), established in 2009, plays a significant guiding role for the organisation, making the knowledge and expertise of leading figures in Irish food science and nutrition available to the NDC and, ultimately, the Irish consumer.

NDC Quality Milk Awards

TheNDCQualityMilkAwardsentereditssecondyearin2010andthe NDC was delighted to retain the services of the three judges centraltoitssuccess–Prof.PaddyWall,Dr.DavidGleesonandJackKennedy. The endorsement of the 2009 winner, Brochan Cocoman, on the value of the award further underlined its appeal to the dairy farming community.

For the second year running, the response at both the farming community and the member co-op level was impressive and a total of 11 finalists were shortlisted, representing eight co-ops. The awards ceremony was held in Citywest, Dublin, in October and hadalmost100guestsinattendance.VeteranbroadcasterMicheálÓMuircheartaighwasguestofhonourandpresentedtheawards.The 2010 overall winners were John and Kevin Walsh, Kilnafrehan West, Dungarvan, Co. Waterford, who are manufacturing suppliers to Glanbia, while the runner-up prize was won by Robert and Shirley Shannon, Droumgarriffe, Ballinascarthy, Co. Cork, who supply Lisavaird Co-op.

Congratulations to the other prize winners who included:• Runnerup,year-roundsupplycategory: Noel O’Donovan, Ballymacwilliam, Clonakilty, Co. Cork

(Barryroe Co-op).• Runnerup,manufacturingsupplycategory: MichaelKeating,Kilcoleman,Rathkeale,Co.Limerick(Kerry

Agribusiness).• Judges’specialrecognitionawardsforcareoftheenvironment: Billy&DeirdreConnor,Crossmolina,Co.Mayo(Connacht

Gold Co-op); Sean&MaryHurley,Ballintemple,Arklow,Co.Wicklow

(Glanbia).• Judges’specialrecognitionawardforbestfacilities: Patrick&PhylisKennedy,Toomevara,Nenagh,Co.Tipperary

(ArrabawnCo-op),farmingwithsonMartin.

Speakingattheawardsceremony,Prof.WallpointedtoFood Harvest: 2020, published by the Department of Agriculture, Fisheries and Food–whichforecastsgrowthof50%indairyoutputinthenextdecade–notingthat‘withthiskindofpotentialrapidexpansion,itisabsolutely vital that dairy farmers keep a focus on the importance of high-quality standards’.

TheNDCisproudoftheroleoftheNDCQualityMilkAwardsin confirming that high-quality milk production standards are compatible with commercial viability and foresees a growth in stature fortheseawardsintheyearstocome.MediaopportunitiesaroundtheQualityMilkAwardsalsoprovedsignificant,notjustintheagri-media, but more broadly, and have allowed top-quality Irish milk production to be showcased to consumers.

Advocacy & Communications Programme

Kevin and John Walsh, winners of the National Dairy Council Quality Milk Awards 2010 are pictured on their farm with their mother Catherine and sister Teresa Photo: Leo Murphy, Waterford

15


Irish Osteoporosis Society

Close partnership with the Irish Osteoporosis Society (IOS) has been an important feature of the NDC’s advocacy strategy since 2008. ThenowannualjointpromotionforPancakeTuesdaygeneratesconsiderable publicity for the joint goals of the two organisations: stressing the importance of dairy in the diet in the battle against osteoporosis.

The promotion highlighting pancakes as a perfect way to include milk and dairy in a balanced diet and a photo call with Ryan Tubridy generated good coverage across the national media. Collaboration between the NDC and the IOS continued in 2010, specifically around the Milk It For All It’s Worth programme, with a series of joint seminars planned over the coming three years.

Health & Wellbeing

Health-care communication was identified as a priority in the Dairy: Food for Life strategy. The NDC objective is to engage directly with health professionals, both to address their needs and, in recognition of their privileged position, to engage them as channels of science-based information on dairy.

DN Forum is a scientific newsletter designed to fulfil the former role. First published in 2009, three editions were published in 2010, covering the areas of sports nutrition, the role of dairy in body-weight management and an update on the fats in dairy foods. DN Forumnowhasanationalaudienceofsome3,500GPsaswellasover 700 dietitians, public health nurses and practice nurses.

In 2010, the relationship with these stakeholders was further enhanced when the NDC hosted a seminar for fitness and health professionals on sports nutrition. The NDC has also developed a significant e-library resource for the sector, available in the password-protected health professional area within the NDC website.

Consumers

For the public accessing the services of health professionals, 2010 saw the NDC extend its areas of engagement, as the range of diet andhealthliteratureavailableinGPwaitingroomswasextended.Anew booklet, A Guide to Weaning, was published in 2010 and is now availablein80%ofGPsurgeriesnationwide,afiguretheNDCiscommitted to growing further in 2011.

TheNDC’sHealth&Wellbeingprogrammeisdesignedtomakescience-based information on diet and health directly and easily accessible to consumers. The development of the NDC’s Dairy Den

has been a particular success, offering insight into the changing priorities of children’s diet as they grow up, as well as practical tips on how to meet these needs at sometimes difficult junctures in a child’s development.

The Dairy Den has an active database of 30,000 mothers. A growing instalment of publications included, in 2010, the launch of new booklets on weaning and pre-school nutrition. The Dairy Den’s database of young mothers has also provided an important basis for the NDC’s communications strategy in the Milk It For All It’s Worth programme, for whom young women form an important target group.

Morebroadly,theHealth&Wellbeingprogrammefocusesonsecuring coverage in the media for the health and nutritional benefits ofdairy.MonthlycontributionstoIrish Country Living and Irish Farmers Monthly formed an important part of this strategy in 2010.

ThesuccessoftheHealth&WellbeingEvenings,meanwhile,continued to surpass expectations in 2010, with events held in Donegal, Cork, Kilkenny and Sligo, in conjunction with four dairies. High attendances and positive local media coverage underlines the continuing appeal of these events and the NDC looks forward to further co-operation with its member co-ops as the programme continues in 2011.

International Alliances

The NDC continued to build international links and alliances throughinvolvementintheGlobalDairyPlatform,theEuropeanDairyMarketingForumandtheUtrechtGroup.ParticipationintheEuropeanDairyMarketingForumprovedparticularlysignificantin 2010 and a pan-European campaign to promote the nutrient richness of milk and dairy products is now in the pipeline. Seven countries are involved in the initiative with a submission for EU funding made in November 2010. A similar co-operative approach linking the NDC with the Dairy Council for Northern Ireland and The Dairy Council (GB) has already borne fruit in the Milk It For All It’s WorthProgramme.

First National Tooth Day

In 2010, the NDC undertook its first collaborative initiative with the Dental Health Foundation. With 30 November designated as National Tooth Day, schoolchildren at junior levels across the country were introduced to a fun-based tooth-care programme, which highlighted the importance of brushing twice daily and a healthy balanced diet as central to good oral hygiene. Primary schools were contacted in advance by the Dental Health Foundation and included in the ‘goody bags’ made available were toothpaste and NDC fridge magnets. The NDC’s role centred on a DVD, which explained the importance of tooth care and highlighted the importance of ‘tooth friendly’ nutrients and diet.The NDC contributed information on the value of dairy nutrients to tooth health as part of a balanced diet and the DVD also provided an opportunity to introduce non-participating schools to the School Milk & Dairy Programme. The Dental Health Foundation reported an excellent response among schools to the first year of the programme. In all, 2,500 schools participated, with the message of dairy as a nutritious and tooth-friendly snack reaching 120,000 children in total.

Celebrating Perfect Pancakes 2010 with TV and radio presenter Ryan Tubridy and friends are (l-r) Helen Brophy, CEO, NDC; Dominic Cronin, Chairman, NDC and Niall McLoughlin, CEO, Irish Osteoporosis Society Photo: Marc O’Sullivan

16


TheMarketing&PromotionProgrammewitnessedanumberof important innovations over 2010, extending the scope of the NDC brand and ensuring successful advertising campaigns that promote the value of Irish dairy products are accessed by consumers through both traditional and new media. Arguably, the approach taken to the Farmed in the Republic of Ireland trade mark is most emblematic of the NDC’s approach, reflecting the evolving nature of its promotional activities. Although the campaign was launched in 2009, it carried over significantly into 2010 when the first evaluations were also conducted.

The culmination of learning from the first two years of the Dairy: Food for Life programme, the Farmed in the Republic of Ireland trade mark campaign has won wide praise for responding compellingly to the consumer desire for clarity in the area of provenance, and for addressing the issue in a manner that brought a fresh perspective to enduring community values.

NDC Trade Mark Achievements

The first consumer evaluations of the advertising campaign around the Farmed in the Republic of Ireland trade mark were undertaken in January 2010, less than two months into the launch, with a second inOctober2010,followinga32-weekrunoftheTVadvertisement,in addition to a radio and press campaign. One headline figure from the January evaluation confirmed the campaign’s significant inroads in a very short space of time: 68% of mothers stated they would now only choose milk with the NDC mark.

A new research methodology was employed to measure the success of the campaign against what are considered the four key drivers of consumer behaviour when purchasing milk: best for family; natural and healthy; local and fresh; and quality, heritage and value. While theadvertisingcampaignwaschieflyconcernedwithdriverfour–quality,heritageandvalue–‘bestforfamily’isconsideredthemost

Marketing & Promotion Programme

Irish Cheddar - Goodness in every bite

visit cheesymoments.ie

NDC Cheese Anabelle 48sht FA.indd 1 27/08/2010 11:54:30

17


important macro driver for the category and, so, an additional aim of the campaign was to raise consumer expectations in this area.

Theconsumerevaluation,conductedbyBMRBrandKeys,foundtheapproachtakenwas‘perfectlyonstrategyinhowitpromotesthetrademark’,noting,alongsideitssuccessindriverfour,that‘italsoresonates strongly in the all-important first driver, best for family.’Further good news followed in the October 2010 evaluation, which sawthecampaignsustainitsappealinallcategories,‘withoneverysignificant and positive difference: the ad has gained appreciation in the local and fresh driver, where it now exceeds consumer expectations by a substantial margin.’

For our co-op members, a natural question is how such positive findings translate into actual behaviour in the marketplace. The role of the trade mark, in foodservice and retail contracts actually won, has also been confirmed by the research. In the first evaluation, in January 2010, 80 per cent of dairies reported retail customers specifically asking for the mark or including it in their tender requirements. Despite the fact that the advertising campaign was focused at retail level, 40 per cent of dairies also reported that foodservice customers had specifically asked for the NDC mark or included it in their tender requirements.

Recognising the opportunity, the NDC launched a new marketing programme, aimed at the foodservice sector in June 2010, where a certificate of origin was made available for use in customer premises. In 2011, the NDC will introduce a foodservice award to showcase ‘champions’ofthenewcertificateandalsoplanstoworkwithmember dairies to increase the number of premises displaying the trade mark.

The overall success of the trade mark, and the promotional campaign that supported it, can be seen in the support it has gained from our member dairies. As of February 2011, the Farmed in the Republic of Ireland trade mark is carried by 15 brands of NDC member dairies and has been implemented on over 340 retail milk and creamproducts. The year ahead will see the campaign move into the next phase,withaTVadvertisingcampaignfeaturinganewanimatedcarton character. The new campaign aims to continue to raise awareness and recognition of the trade mark and to convey the message to consumers that milk displaying the mark is fresh, tasty, natural,healthyandalwayssourcedlocally.ThenewTVcampaignwill be supported by press and outdoor activity, in addition to a proactivePRprogrammethroughouttheyear.

Butter and Cheese

While NDC promotional activity focused primarily on liquid milk since initiating the Dairy: Food for Life strategy, in late 2009, the opportunity arose to broaden this base following the establishment of an industry working group on butter and cheese. Through the group, the NDC sought to canvass industry opinion on a number of important issues, among them the feasibility and opportunity for

NDC at the Ploughing Championships

The opportunity to make an impact at the largest annual event in the country for the rural community is hard to resist. As a consumer-facing organisation acting on behalf of the dairy industry, the NDC also has a particular remit to raise its profile when the opportunity arises. In 2010, the NDC was delighted to introduce a new design concept at the National Ploughing Championships, an inflatable dome-shaped stand that allowed for increased visibility and branding and, through extended floor space and a thoughtful programme of events, enhanced the sense of the NDC as a friendly and accessible organisation working in partnership with the farming community.

AppealVisitor numbers through the NDC stand were estimated at 20,000 over the three-day period. A number of attractions were designed to appeal to these diverse visitors, and had particular appeal to young people. Life-size cut-outs of Paul O’Connell and Kevin Doyle, who endorse the NDC’s Farmed in the Republic of Ireland trade mark and Milk It For All It’s Worth Programme respectively, were immediately eye catching and stressed the link between milk and dairy with sport. When these two sports personalities visited the stand in person, they drew large crowds as visitors queued patiently to meet them and have their photograph taken. A celebrity cheese tasting competition, which involved the two men and food critic Tom Doorley, also raised €3,000 in aid of Self Help Africa and again drew large crowds onto the stand. Similarly, the NDC was delighted to welcome Tipperary captain, Eoin Kelly and player, Lar Corbett, when they visited the National Ploughing Championships. Their presence drew an enthusiastic response from the public.

AttractionsThroughout the stand, the emphasis was on interaction. A central information desk, manned by NDC staff, proved a great success as information on the role and value of dairy in a good diet was shared and give-aways for visitors included bags, pens, keyrings and fun-packs for children. A ‘test your strength’ challenge was, unsurprisingly, particularly appealing to male visitors and prizes for the challenge included tickets to the forthcoming football matches at the Aviva Stadium, courtesy of the NDC’s partners, the FAI.

The ‘Cheesy Moments’ photo booth was a huge success with female visitors, as the queues of teenage girls testified. Daily prizes included a digital camera and digital photo frames and the NDC was particularly pleased with how the promotion reinforced the values of the campaign. The NDC’s ‘Butter Queen’ proved an immediate hit as she provided visitors with delicious shortbread, made by Seymour Biscuits of Cork (supplied by Bandon Co-Op). Recipe cards, especially designed by the NDC, also explained how to make shortbread, with the value of butter in home cooking highlighted.

FeedbackIn addition to the very positive feedback from visitors, excellent media coverage was achieved over the course of the event, as the NDC featured in national radio, press and agri-media as well as local radio and press. Such exposure was particularly gratifying given the number of trade stands present at the show.

18


the organisation to undertake marketing and promotional activity in butter and cheese. To this end, a research initiative was undertaken with the Irish Dairy Board, to learn more about consumer purchasing drivers for butter in the Irish market.

A similar programme was then undertaken for cheese, this time in conjunction with Wexford Creameries and Glanbia. The findings from both fed into the two promotional programmes initiated in the summer months. The butter campaign highlighted convenience and versatility, and stressed traditional uses as a topping on toast and baked potatoes. Executed through a print advertising campaign that ranfromJunetoOctober,itwassupportedbysignificantPRactivitysuchassponsorshipofRTE’sMooneyProgrammeintheweekleading up to 20 June.

Launchedinmid-Septemberforathree-weekperiod,the‘CheesyMoments–What’sYours?’campaignpromotedtheversatilityofIrish cheddar and the possibility of extended usage occasions in an amusing, family-oriented manner that reflected the findings of the consumer research. The logos of the seven brands of Irish cheddar (Avonmore, Charleville, Dubliner, Killowen, Kilmeaden, LowLow and Wexford) were brought together to underscore the Irish focus of the message and the campaign was run largely through posters with press, national and local radio, and online advertising also featuring.

The sense of fun intrinsic to the campaign carried through to the NDC website, www.cheesymoments.ie, which featured a competition that allowed members of the public to submit their favourite photographs.

Evaluations of both campaigns, in January 2011, provided clear evidence of their success. The NDC campaign was found to be exactly on strategy in three key drivers. In the final driver, Quality &Value,whereconsumerexpectationsareparticularlyhigh,therewas a marginal shortfall, which will be addressed in subsequent reformulations of the campaign. An exceptional performance was also noted for the cheese campaign, which, in a small time period, was seen to provide substantial uplift to all four of the category drivers associated with cheddar: best tasting family cheddar; natural varieties; nutritious and wholesome; and value and convenience.

Promoting in Place

TheNDC’spresenceateventssuchastheNationalPloughingChampionships, the Tullamore Show and the National Dairy Show are important parts of its annual calendar. To achieve maximum

impact, the NDC team puts considerable thought into innovative approaches that will work in each context, as the accompanying panelpieceontheNationalPloughingChampionshipsexplains(seepage 17).In 2010, for the second year running, the NDC was proud to sponsortheWomen&AgricultureConference.HostedintheLyrathHotel, Kilkenny, this event enjoyed huge support in the farming community. The NDC had the privilege of officially opening the conference with a presentation that focused on the importance of dairy in the diet. The conference enjoyed a capacity attendance with over 700 delegates, with extremely positive feedback on its participation.

Though relatively small in scale, two further promotional opportunities that emerged in 2010 reflected the growing stature of the NDC as a national organisation and its ability to engage with consumers at a range of cultural interfaces.

The NDC was delighted to play a role in the new farm which opened at Dublin Zoo in 2010. Created by Agri Aware, the farm is designed to educate children on the basics of food production in a fun way and to remind them that our domestic animals can be just as fascinating as more exotic ones. The NDC contribution was, naturally,focusedondairying–bothontheproductionaspectsand the nutritional benefits. The opportunity to share information with families in such a context is not only significant in its own right but, it is hoped, will further support parents’ decision making positively,inareassuchasparticipationintheSchoolMilk&DairyProgramme.

A second novel promotional activity was the NDC’s decision to sponsorfreeadmissiononFridaysattheCorkButterMuseumoverthesummermonths.‘FreeFridays’wasofficiallylaunchedbyDarinaAllen in August, where it received good coverage in the media and, more importantly, bolstered visitors to the museum, with numbers reaching over 500 per Friday.

19


The calendar year encompasses two school years and the review of the School Milk & Dairy Programme in 2010 reflects significant progress made during both of these. At the beginning of 2010, the NDC was actively building on the success of the nationwide launch of the Fresh Milk Club some months earlier in September 2009.

Over the duration of its first year, 500 schools were targeted to join the scheme and the number of participants increased by 4,840. This represented growth of 15% in participation among primary school pupils and provides strong evidence of the long-term value of the School Milk & Dairy Programme as well as confirming the strategic basis on which the NDC is developing the Programme is working.

Fresh Milk Club

School children are sophisticated consumers and the Fresh Milk Club branding was designed to recognise this reality, with a strong message that highlights the natural goodness of milk in a way that is fun and resonates with children. An information pack and website were designed for use in a learning context, offering fun facts and activities for children and additional educational support for students and teachers.

In the 2010/2011 school year, the Fresh Milk Club went from strength to strength as the programme targeted 125 additional primary schools for membership and, to ensure the Club remained fresh and relevant to existing members, updated the information pack, making it available for the first time in Irish as well as English. The FAI School Liaison Programme continued to be an important

calling card for the NDC over this period. Of the 60 schools that received FAI visits in the September-December 2010 period, 40 of these have since registered for the School Milk & Dairy Programme.

Logistical issues have limited some schools from involvement in the programme and, to date, in the 2010/2011 period, 67 primary schools have received fridges courtesy of the National Dairy Council or their local member dairy.

Looking ahead to 2011, it is envisaged that a new loyalty programme to encourage schools to register and remain involved will be rolled out in September.

Recognising the need to communicate the goals of the School Milk & Dairy Programme at a number of levels, the NDC reached out to school teachers through In Touch, the official publication of INTO. In January 2011, the NDC addressed the Irish Primary Principals’ National Conference for the first time.

World School Milk Day, celebrated on 29 September, provided a further promotional opportunity and free milk was provided to participating schools.

During the 2010/2011 school year, the NDC also developed a very successful Christmas card competition, encouraging primary school pupils to express their creativity by illustrating a Christmas card on a festive dairy theme. Congratulations to Cillian Monahan, Kilmoyley National School, Co Kerry, who was winner of the competition. The design featured on the official NDC Christmas card in December.

School Milk & Dairy Programme

Celebrating World Milk Day in June 2010 are pupils from St Edward’s National School, Sligo. Picture: Colin Gillen.

Amy Lee, St John’s National School, Sligo celebrating World School Milk Day in September 2010. Picture: Colin Gillen.

20


Secondary School Launch

ArguablythemostsignificantdevelopmentoftheSchoolMilk&DairyProgrammeover2010wasthedecisiontolaunchschoolmilkin secondary schools in September 2010. Building on the learnings of the pilot programme initiated the year before, 100 of the 730 secondary schools in Ireland were targeted for participation.

Schoolgoers expect sophistication in the communications aimed at them and it was recognised from the beginning that messaging for a teenage audience needed to be tailored around their needs. An information pack and the website, www.schoolmilk.ie, were developed to support the message of milk’s health and nutritional attributes to this critical audience.

Recognising the different dynamics of primary and secondary schools and, in particular, the fact that many secondary schools have canteen facilities, the programme offers secondary schools the choice between dispensers and cartons or bottles. This has been developed in conjunction with the member dairies and the options on offer will vary according to the dairy co-op, the number of students in the school, the facilities in the school and their preferences for delivery. Ten fridges have also been supplied to secondary schools since September and, in cases where catering facilities are provided in schools by a private catering company, a reimbursement mechanism

has been agreed which allows them to participate.Highlighting the link between milk and sports activity is a priority fortheSchoolMilk&DairyProgrammeatbothfirstandsecondleveleducation.TheNDCFAIFutsalSkillsProgrammeprovidedan exciting opportunity to engage with secondary schools. In all, 40 schools participated in the Futsal Skills programme and six out of the eight schools that reached the Futsal final on 11 November were participantsintheSchoolMilk&DairyProgramme.

ThenumberofnewsecondaryschoolsregisteredfortheSchoolMilkProgrammebytheendof2010was34,witheightto10schoolsactively considering registering. While lower than hoped for, it reflected the longer decision-making processes involved in bringing secondary schools on board.

Manyschoolscitedlackoftimeandresourcesasareasonfornot joining the programme and these are challenges that will be embracedastheSchoolMilk&DairyProgrammedevelopsin2011and the NDC builds stronger links with teachers’ unions, home economics teachers and school principals. The enormous success of the NDC Milk It Advertising Awards, outlined on page 21, is a reminder of the potency of the dairy health message and further competitions will be developed for both students and teachers in 2011.

NDC & FAI Futsal Champions Drimnagh Castle School (from left) Alan Swan (Snr Pupil Coach), Tara Regan (National Dairy Council) with the celebrating winning team, Mark Mitchell, Daniel Peppard, Kenneth Caulfield, Karl Malone and Adam O’Connor and (right) Derek O’Neill, National Futsal Co-ordinator, FAIPicture: Fennells Photography.

21


Students Milk It!

The National Dairy Council launched the NDC Milk It Advertising Awards in September 2010, gaining extensive national media coverage in the process.

The competition invited secondary school students to research, create and plan an advertising campaign aimed at teenagers, which encouraged them to incorporate the recommended daily allowance of five dairy portions a day into their diet.

Almost a third of all secondary schools nationally registered to participate. This far surpassed the initial goal of 10%. Schools registered their interest through teachers and, in all, home economics teachers made up 60% of registrations, while business studies teachers formed 12%, with the remaining 28% divided between TransitionYear,ArtandEnglishteachers.Afurtherpositivewasthatschools from all 26 counties registered.

The initial deadline for project submissions was 30 November 2010 but this was extended to 7 December to facilitate schools that had closed due to adverse weather conditions. In January 2011, the competition entered the second phase as 100 of the submissions were selected to activate their advertising campaign in their schools.

The final stage involves 12 project teams selected to pitch their campaigns to the NDC Milk It Advertising Awards judging panel, with both the pitching and the final awards ceremony planned to take place in Dublin in April 2011.

The NDC is delighted to have a distinguished judging panelforfinaladjudication,includingMichaelO’Leary,NationalCo-ordinatoroftheTransitionYearProgramme;DrAndreaProthero,AssociateProfessorofMarketing,UCD,Dublin;RichardCurran,DeputyEditor of the Sunday Business Post and presenter of RTÉ’s Dragons’ Den; Shay Keany, CEO of ZenithOptimedia;BrianSwords,PresidentoftheInstituteofAdvertisingPractitionersofIreland;andindependentdietitian,PaulaMee.Theverybestofluck to all the finalists!

Pictured at the launch of the NDC Milk ItAdvertising Awards in Windmill Lane Studios, Dublin, were (from left): Doha Raguragui (2nd year); Ciaran Nolan (5th year); Jane Whelan (5th year) and Ciaran McGreevy (2nd year), Ballinteer Community School, Dublin

22

Securing just over €1m in co-financing from the EU and the Department of Agriculture, Fisheries and Food for the promotion of milk to younger consumers must be viewed as highly significant, particularly in the current context of strained resources for marketing programmes generally. The news received positive coverage in the agri-press and local media throughout the country and was followed up by a number of radio interviews conducted with the CEO.

Progress

Milk It For All It’s Worth is a three-year, international programme, also involving the Dairy Council of Northern Ireland and the Dairy Council of England & Wales, with the NDC designated as Programme Manager and the CEO as the Lead Co-ordinator.

Over the first months of 2010, the groundwork for the programme was laid out and, following a two-phase tendering process, Cawley Nea\TBWA was selected as the creative agency to implement the project. Over the summer months, the parties worked together

to create the visual identity for the campaign and to develop the relevant advertising material and corollary supports such as the website. Kevin Doyle was recruited as a sporting personality to support the launch, which took place on 6 October, 2010, with the Irish sports personality featured in a full-page advertisement in the Irish Independent.

The first phase of the campaign spanned from October 2010 to March 2011 and, in all, involved some €230,000 in direct media spend in Ireland over this period. In addition to radio and national print media, the campaign includes media selected to reach youth and sporting audiences, as well as digital online advertising on sites such as MSN and YouTube.

The youth oriented www.milkitforallitsworth.ie web site is also designed to engage younger audiences, demonstrating the relevance of the recommended dairy dietary guidelines through an approach that is accessible and relevant to younger audiences.

Milk It For All It’s Worth Programme

23

Linkages

The Milk It For All It’s Worth Programme has also created a fresh opportunity for collaboration between the NDC and the Irish Osteoporosis Society, with the first of 40 planned events over the three-year period taking place in October 2010.

The fitness professionals’ seminar, held at The Helix at DCU, was chaired by Prof. Moira O’Brien and keynote speakers included Prof. Ron Maughan of Loughborough University, Emma Cockburn of the University of Northumbria and Ruth Woodmartin, Sports Performance Nutritionist with the IRFU, who discussed emerging research on milk as a sports recovery drink. Attendance of some 125 fitness professionals, sports coaches, trainers, dietitians and other health professionals surpassed expectations and pointed to a high level of interest in such seminars in the future.

In addition, a health and fitness writers’ trip to the All England Lawn Tennis Club, Wimbledon, London, in December 2010, attracted key journalists from the UK and Ireland. Prof. Ron Maughan was key speaker on the day and was joined by Wendy Martinson, Sports Performance Nutritionist for the British Olympic Association. The globally acknowledged home of tennis, Wimbledon provided an

excellent location to build relationships with key influences in the UK and Irish media.

In late 2010, work continued on the development of two information guides, the first for the 11-20-year-old age group and the second specifically for women in the 20-35-year-old age group. In addition, the first edition of a newsletter aimed at sports professionals is due for completion in early 2011.

Success

Given the relatively short lead-in period, as well as the limited administrative resources available to the NDC, the implementation of the Milk It For All It’s Worth Programme can be considered highly successful and the NDC is proud to be the lead partner in a programme that will invest considerable resources in education and advocacy to this key youth demographic.

The support of our partner organisations in Northern Ireland and Great Britain, as well as the assistance and support of the Department of Agriculture, Fisheries and Food has been invaluable in the development of the programme and we look forward to reporting on further success over 2011.

24


Think it... Drink it...

Milk itYour complete guide

The National Dairy CouncilInnovation House, 3 Arkle Road, Sandyford Industrial Estate, Dublin 18 Tel: (01) 290 2451 Fax: (01) 290 2452 Email: [email protected] www.ndc.ie

The School Milk and Dairy Programme provides an affordable, year-round daily supply of fresh milk to pupils in Irish secondary schools. Contact The National Dairy Council for a free information pack. www.schoolmilk.ie

For more information on how you can ‘Milk It For All It’s Worth’, check outwww.milkitforallitsworth.ie

THIS INFORMATION BOOKLET IS FUNDED BY THE NATIONAL DAIRY COUNCIL AND SUPPORTED BY THE EUROPEAN UNION UNDER THE MILK IT FOR ALL IT’S WORTH PROGRAMME

to ‘milking it’

MW: Teen 01/11

TheIssuesManagementandNutritionProgrammesprovideabedrock for NDC activity in a number of areas and, indeed, the organisation’sAdvocacy&CommunicationsandMarketing&PromotionProgrammescanbeseentobuildnaturallyonthesolidfoundations established since 2008.

OutputsfromtheIssuesManagementandNutritionProgrammesallow for effective engagement with key stakeholders and decision-makers: from health professionals and Government to consumers and industry.

Issues Management Programme

TheestablishmentoftheIssuesManagementCommitteein2008underscores the sense of urgency attached to this programme from the first implementation of Dairy: Food for Life. The development of theIssuesManagementManualhasbeencentraltotheworkofthecommittee since then.

With the further development of the manual in 2010, issues management concerns are now communicated to members through the secure online portal. It goes without saying this is a constantly evolving topic and the NDC is conscious of the need to stay in touch with developments of concern not only in the dairy industry, nationally and internationally, but across the wider agri-food sectors.

Withthisinmind,theIMCremainsaprioritySub-Committeefor the NDC. Its ability to respond to issues as they emerge, and to provide both a consultative and advisory role for industry is invaluable, particulary in situations where members are required to act on emerging concerns and make decisions where sustaining the confidence of consumers is paramount. The SNT committee, in addition to strengthening the NDC’s knowledge base in nutrition, has provided a forum to discuss and debate these topics.

Building links with external organisations that have expertise and oversight in the field of issues management is also a priority and, in 2010, the NDC strengthened relationships with two key bodies: TeagascMooreparkandtheFoodSafetyAuthorityofIreland.Theissues of health claims for dairy products continues to be of concern, as is addressing misinformation and misconceptions that persist around dairy products, often at high levels.

Following a number of meetings with the FSAI, it was agreed to develop a seminar that provided a focus on health claims for the dairy industry in 2010. Open to general food industry, this event washeldinMay.Feedbackfromdairyparticipantssuggestsitwasboth informative and useful. The development of the relationship with the FSAI is particularly welcome given some of the difficulties encountered by the industry in the EU health claims process in 2008,whichtheFSAIbeganenforcinginMay2010.

Issues Management and Nutrition Programmes

25


At the sports nutrition seminar at the All England Lawn Tennis Club in Wimbledon are (from left) Dr. Catherine Logan, Nutrition Manager, NDC; tennis star Tom Farquharson; Prof. Ron Maughan, School of Sport, Exercise & Health Sciences, Loughborough University; and Dominic Cronin, Chairman, NDC.Picture: Vismedia.

Irish international soccer star Kevin Doyle joined the NDC at the 2010 National Ploughing Championships to support the Milk It For All It's Worth campaign. Kevin is pictred here with Evan Hales, aged nine, from Mullingar.Picture: Dylan Vaughan

One ongoing concern for the industry is the implications of planned advertising restrictions for foods based on their nutritional content, which is included in the recently approved broadcasting legislation. The proposed basis of these restrictions would impact unfairly on cheese producers and send out an entirely inaccurate signal to both children and their parents about the role of dairy in healthy diets. The NDC is also keen to ensure the forthcoming national dietary guidelines to be issued by Government will reflect the most up-to-date science-based information available around dairy consumption.

Nutrition Programme

TheNutritionProgrammeallowstheNDCtobearecognisedandauthoritative source of up-to-date science based information on the role of dairy in balanced diets. Health professionals are a key audience for such activities and the NDC is working to position itself as the top-of-mind resource for doctors, nurses, dietitians and others who are seeking to refresh their knowledge in this area or stay up-to-date with the latest developments.

The opportunities afforded by IT are central to this strategy and, in 2010, the NDC’s e-library was enhanced and upgraded and is now a significant online resource for health professionals. Equally, DN Forum, of which three issues were published in 2010, offers science-

based information in a compact and digestible form. The NDC’s involvement with Agri Aware in developing material for the new farm at Dublin Zoo has allowed it to communicate the nutritional benefits of milk in addition to cultural, historical and production information, to an audience that will number in the hundreds of thousands over the coming years.

Meanwhile,contactwiththeIrishDairyBoardinadvanceofthe NDC’s butter promotion in June 2010, looked at possible collaborations between the two bodies in strengthening the perception and position of butter among consumers. In 2011, the NDC anticipates further work between the two bodies towards establishing a common approach.

TheNDC’sinvolvementwiththeEuropeanDairyMarketingForumoffers it an important conduit of latest thinking across Europe and, at two events in 2010, the ongoing development of a pan-European approach on nutrient density in dairy was discussed. This has fed directly into the proposed intra-EU promotional campaign now under active consideration by the European Commission for funding. The NDC was aided in its nutritional activities in 2010 through the six-month nutrition placement programme with the NDC and UCC.

26


As an organisation funded directly by dairy farmers in the Republic of Ireland, the NDC believes the confidence demonstrated in it must be repaid by clarity and robustness in corporate governance structures and that transparency and accountability are prerequisites for any modern advocacy organisation. To this end, the NDC establishedtheAccountability&CorporateGovernanceBoardSub-Committee in 2008 and is pleased to note its contribution to the NDC’s strategic corporate development over the course of 2010.

Corporate governance is, of course, also concerned with charting the long-term direction of an organisation. The decision of Connacht Gold to fully rejoin the NDC in 2010 as well as that of Lisavaird Co-op to become a member in 2011 can be seen not only as positive steps in their own right, but as strengthening the financial base of the NDC going forward.

EU Funding

Building on the success of Milk It For All It’s Worth, the NDC has also been involved in an intra-EU application for EU funding throughtheEuropeanDairyMarketingForum.Theproposalisfora new pan-European campaign to raise consumer awareness and understanding of the nutrient richness of milk and dairy products and involves seven dairy councils, in Austria, Belgium, Denmark, France, Ireland, Netherlands and Northern Ireland.

Theproposalseeks€26minfundingforthesevenMemberStatescombined, of which €1.13m would be allocated to Ireland over a three-year period. However, the NDC would be required to match funding on a 50:50 basis. Discussions with the Department of Agriculture, Fisheries and Food and the European Commission have to date been positive and a decision is expected by June 2011.

New Board

Equally vital to the principles of good governance is a committed and representative Board and the NDC was pleased at the level of interest expressed in the election process to its main Board, which took place the first quarter of 2010.

Inadditiontowelcomingsixnewappointees:JohnEgan,MaryFox,PadraigGibbons,TimMaher,TomPhelanandStephenShorten,the NDC would like to acknowledge the contribution of departing Board members: Tom Corcoran, Sean Griffin, John Hehir, Richard KennedyandMaryPurcell.ThenewBoardwillserveafour-yearterm and feedback from those involved in the election process suggests the new regional breakdown by which members were elected has been a success.

The launch of the Annual Review 2009 & 2010 Plan in February 2010 provided an opportunity to reflect on progress over the previous year and establish the framework for activity in 2010, all

within the context of the Dairy: Food for Life strategic plan. The Annual Review provides an excellent opportunity for the NDC to bring stakeholders right up to date with its work and the launch enjoyed an excellent media attendance with significant coverage received over the following days and weeks.

Following a review in 2009, the organisation has managed to streamline its operations in a number of areas and, while no serious inefficiencies were uncovered, the NDC is confident that it is better placed to respond to the challenges ahead and to ensuring that the greatest amount possible of resources available to it are focused on maximising its advocacy activities.

Budgetary strategy has, over the course of 2010, as it will in 2011, centred on delivering value without compromising on the quality of delivery. While funding will remain a challenge in 2011, given the scope of the plans for relationship-building with its key audiences, the NDC is confident that the value for money delivered in all its programmes is, by any objective criteria, exceptional.

Innovation House

The opportunity to move offices emerged in 2010 as the NDC’s lease in its previous headquarters came to an end. The old premises were unsatisfactory for a number of reasons and, recognising the opportunities in the current property market, a number of options were considered. In August 2010, the NDC relocated to Innovation House, situated opposite the Sandyford Luas stop and within easy access of the M50.

Accountability & Corporate Governance Programme

27


2011 Programme Plan

1. Marketing & Promotion Programme

In 2011, new visuals featuring vegetables will be used in the butter campaignandanadditionalmessageon‘value’willbeintegrated.The campaign, which will run continuously throughout the year, will have an emphasis on key national papers and magazines. Digital advertisinginJunewillbelinkedtoaFather’sDayPRpromotion.

The‘CheesyMoments–What’sYours?’campaignwillcontinuewiththe current visuals maintained and an increased emphasis on the ‘taste’messageinaccordancewiththeresearchrecommendations.This campaign will be largely outdoor based and will run in two bursts in 2011. The key campaign for milk promotion centres on the NDC trade mark, with the goal to further increase awareness and commitment to purchasing milk and cream with the NDC mark.

The 2011 media plan will seek to ensure a consistent level of activity over the 12-month period with 50% of the budget being allocated to TV.ThefoodserviceprogrammewillbefurtherdevelopedwiththeintroductionofaPRprogrammetohighlightkey‘champions’acrossthe foodservice sector. The administration of the trade mark will continueinto2011withthesupportoftheTradeMarkMonitoringCommittee.

2. Advocacy & Communications Programme

The NDC aims to expand the suite of information resources available for consumers and to ensure that positive coverage is achieved for milk and dairy throughout the year. It will undertake a minimum of threeHealth&WellbeingEveningsinconjunctionwiththedairies.

Three editions of DN Forum will be published, the library and online resources will be further developed and the NDC will continue to develop relations with the IOS and Dental Health Foundation. The NDCQualityMilkAwardswillgetunderwayearlierin2011toensure maximum publicity throughout the process.

Important events include the Tullamore Show (August 2011), the NationalPloughingChampionships(September2011)andtheNational Dairy Show (October 2011). The NDC will continue to sponsortheWomen&AgricultureConferencein2011andtoactasHealth&WellbeingPartnerforMacranaFeirme.

3. School Milk & Dairy Programme

While the NDC will continue to co-operate with the FAI, the NDC FAI School Liaison programme will be replaced with a new innovative loyalty programme from September 2011. Fresh Milk Club information packs and the website will continue to be updated and used as a source of information for parents, teachers and pupils. Morefridgesandcooler-bagswillbesuppliedandtheNDCwillcontinue to develop relevant partnerships and work in close liaison with all dairies supplying school milk.

The NDC will continue to communicate with secondary schools, with the NDC Milk It Advertising Awards playing an important roleincreatingawarenessoftheSchoolMilk&DairyProgramme.Fridges will also be supplied to secondary schools where requested.

4. Milk It For All It’s Worth Programme

Two consumer information booklets were printed and distributed, while three editions of Sports Nutrition Forum will be prepared during 2011. The media campaign for Milk It For All It’s Worth will continue into 2011 through print, radio and digital advertising and two new ambassadors will be introduced in 2011. The website will be updated with downloads from nutrition experts and sports personalities and it will include regular online competitions.

A programme of seminars in association with the IOS will continue to be rolled out in 2011 with up to 25 osteoporosis awareness seminars planned at various locations in 2011. The information booklet produced for 20-35-year-old females will be distributed to audiences during these seminars.

5. Issues Management and Nutrition Programmes

The NDC will publish DN Forum three times per year. Topics will be chosen based on feedback from the evaluation of the newsletter. TheHealthProfessionalAreaoftheNDCwebsitewillremainakeypriority in 2011 and, both at domestic and international levels, the NDC will participate at key fora, offer sponsorship support and exhibit at key events.

DistributionofNDCinformationbookletsthroughGPsurgeriesis also a priority for 2011. Understanding Osteoporosis and A Guide to Weaning will be distributed from January to June, with two new NDC booklets distributed over the second half of the year. The consumer section of the NDC website will be further developed and maintained, with consumer-focused articles placed in the national media.

In2011,theNDCwillcontinuetheIreland/GBAlliancewithThe Dairy Council (GB) as a means of sharing issues management resources.Inaddition,theIssuesManagementManualwillcontinueto be developed and uploaded to the online manual in the members’ section of the NDC website. It is also planned to expand and further developtheScientific/Nutrition/Technical(SNT)Committee. If 2011 sees the Broadcasting Authority of Ireland open a public consultation in relation to the proposed Broadcasting Act, the NDC will ensure acknowledgment of the dairy industry response to the proposals. The NDC will also continue to monitor developments as EU opinions are issued and claims are written into legislation.

6. Accountability & Corporate Governance Programme

In addition to the Annual Review 2010 and 2011 Plan, it is also planned to prepare and publish the 2010 Annual Report including the financial statements in June, to be issued at the NDC Annual Conference&AGM.Thisprovidesanidealopportunityforexpertspeakers to address the latest issues within the dairy sector and to allow members to obtain feedback on the previous year’s work.

The work of the four Board Sub-Committees will continue in 2011, aswilltheTradeMarkMonitoringCommittee. In addition, it is planned to hold two to three industry seminars to ensure that the representatives on each of the working groups (School Milk,TradeMark,Butter&Cheese)arekeptfullyinformedaboutthe developments and progress at the NDC.

28


Do

minic C

ronin

Chairm

an (ICM

SA)

Henry C

orb

ally V

ice-Chairm

an (Glanb

ia)

ND

C B

oard

D

ecemb

er 2010

Stephen Sho

rten (B

ando

n C

o-o

p)

Frank Tob

in (G

lanbia)

Co

nor R

yan (A

rrabaw

n C

o-o

p)

Tom

Phelan (IFA

)Sean M

cAuliffe

(No

rth Co

rk C

o-o

p)

Tim

Maher

(Centenary

Thurles Co

-op

)

Kevin K

iersey (IFA

)Patrick K

elly (D

oneg

al C

reameries)

Padraig

G

ibb

ons

(ICO

S)

Mary Fo

x (C

onnacht

Go

ld)

John E

gan

(Kerry

Gro

up)

Jackie Cahill

(ICM

SA)

Eam

onn B

ray (N

ational M

ilk A

gency)

29

ND

C B

oar

d S

ub-C

om

mitt

ee

Mar

ketin

g &

Co

mm

unic

atio

ns

Dec

emb

er 2

010

Eam

onn

Bra

yPa

tric

k K

elly

Jam

es B

urke

(M

D, J

ames

Bur

ke &

A

sso

ciat

es)

Pro

f. D

amie

n M

cLo

ughl

in

(Dire

cto

r -

Mkt

g

Dev

elo

pm

ent

Pro

g.,U

CD

Mic

hael

Sm

urfit

Gra

dua

te

Bus

ines

s Sc

hoo

l)

Cia

ran

Fitz

ger

ald

(M

D, C

iara

n

Fitg

eral

d

Co

nsul

ting

)

Step

hen

Sho

rten

Mar

y Fo

xFr

ank

Tob

in

Do

min

ic C

roni

n C

hairm

an

30


ND

C B

oard

Sub-C

om

mittee

Schoo

l Milk &

Dairy

Decem

ber 2010

Eam

onn B

ray

No

el Mo

oney

(Head

of Leag

ue Mar-

keting &

Prom

otio

n, Fo

otb

all Asso

ciation

of Ireland

)

Tom

Co

rkery (M

ilk Policy D

ivision,

Dep

t of A

griculture,

Fisheries & Fo

od

)

Co

nor R

yanM

ary Fox

Frank Tob

in

Geo

rge K

earns (Secretary,

Natio

nal Dairies

Asso

ciation)

Do

minic C

ronin

Chairm

an

31

ND

C B

oar

d S

ub-C

om

mitt

ee

Issu

es M

anag

emen

t &

Nut

ritio

n

Dec

emb

er 2

010

Jack

ie C

ahill

Kev

in K

iers

eyD

om

inic

Cro

nin

Fio

na L

alo

r (R

esea

rch

Ass

t.,

Scho

ol o

f Pu

blic

Hea

lth &

Po

pul

atio

n Sc

ienc

e,

UC

D)

Dr.

Pat

Dill

on

(Hea

d o

f Ani

mal

&

Gra

ssla

nd R

esea

rch

and

Inno

vatio

n Pr

og

ram

me,

Te

agas

c

Mo

orp

ark)

Cat

herin

e La

scur

ette

s (E

xecu

tive

Secr

etar

y,

IFA

)

Cia

ran

Fitz

ger

ald

(M

D, C

iara

n F

itzg

eral

d

Co

nsul

ting

)

Paul

a M

ee

(MD

, Pau

la M

ee

Nut

ritio

n

Co

nsul

ting

)

Hen

ry C

orb

ally

C

hairm

an

32


ND

C B

oard

Sub-C

om

mittee

Acco

untability &

Co

rpo

rate Go

vernance

Decem

ber 2010

Henry C

orbally

Chairm

an

Padraig

Gib

bons

Sean McA

uliffe

33


National Dairy Council

Staff Organisational Chart

December 2010

Helen Brophy Chief Executive

Lynda Thompson PA to Chief Executive

Dr. Catherine Logan Nutrition Manager

Caroline O’Donovan Nutritionist

Tara Regan School Programme &

Special Projects Manager

Joe Podesta Marketing & Promotions

34


NOTES

The National Dairy CouncilInnovation House, 3 Arkle Road Sandyford, Dublin 18, Ireland

Tel: + 353 (0)1 290 2451 Fax: + 353 (0)1 290 2452www.ndc.ie

ndc annual review 2010 & 2011 plan

Documents

national dairy council

irish dairy industry

school milk dairy programme

ndc board

local dairy farmers

life annual review

programme plan

worth programme