Arla - Australia’s discovering the taste of Lurpak
Published:September 4, 2006
Source :Arla Foods
Sales of Lurpak are expected to treble in Australia this year. To meet demand, ten containers containing Lurpak butter was recently dispatched ”down under”.
”As Lurpak is three times as expensive as local butter, our customers doubted that our products stood a chance in Australia,” says Sales Manager Lars Møller Henriksen, who is based in Kuala Lumpur, Malaysia. ”Nevertheless, the excellent taste has won them - and Australian consumers - over.”
Lurpak arrived in Woolworths last year and is now listed with the Coles chain. By far the biggest in Australia, the two multiples between them account for around 80% of the retail sector. The breakthrough means that last year’s Lurpak sales in Australia of approx. 100 tons are expected to rise to 300 tons this year.
”Even if these are not huge volumes, they represent a highly profitable business,” says Lars Møller Henriksen. ”It’s, therefore, important to build up stocks and establish an efficient distribution system. We’re also focusing on new store promotions and adverts in lifestyle magazines such as Vogue to communicate Lurpak’s qualities to even more consumers."
Arla has positioned Lurpak as a luxury lifestyle choice in Australia, targetting those with money to burn. The group said it was placing adverts in lifestyle magazines such as Vogue. It has employed similar tactics since launching a marketing campaign for Lurpak in China towards the end of last year.
The moves are one example of how European dairy firms may be able to target added value dairy markets outside of the European Union.
Added value products will be essential in securing the future of Europe's dairy industry, according to the European Commission, which has begun reducing price support on dairy commodities as part of its Common Agricultural Policy reform.
Arla has managed to get Lurpak into two of Australia's biggest food retail chains, Woolworths and Coles, yet the brand's high-end position has also lifted it above the competitive domestic dairy scene.
Australian milk production is forecast to rise nearly four per cent to 10.4bn litres in 2006-07, according to abareecononmics. It reported in June that many Australian producers were also looking to target added value product sectors, although a significant number of these are likely to be made for export.
The value of Australian dairy exports in 2006-07 is expected to marginally lower than last year's $2.45bn, due to falling commodity prices.
