Cheese options grew for Iran in 2016

More sophisticated products were offered to Irani consumers in 2016, contributing significantly to growth in the cheese category, says Euromonitor in its Dairy in Iran report. One type of cheese had previously been available, a soft cheese called Iranian UF cheese; key manufacturers diversified and offered cream cheese, processed cheese and other options, which helped the whole category to grow at a healthy rate.

Pegah Dairy was the lead manufacturer in cheese in 2016 with a 29% share of retail value sales, Euromonitor said. The state-owned company has several factories across the country, including in Pegah Khorasan, Pegah Gilan and other areas, which supply their territories with fresh dairy products. Pegah Dairy maintains the popular Pegah Shabnam brand of cheese, a simple soft cheese packaged in saltwater. The company has a very strong distribution network which guarantees its presence even in remote areas and was able to strengthen its position in 2016 with strong marketing campaigns in 2015 and 2016.

According to Euromonitor, strong demand from Iranians for packaged cheese will likely continue to boost retail sales of cheese over the forecast period. As in the review period, sales are set to be driven by the fact that cheese is widely consumed in Iran and general demand for sophisticated processed cheese is still growing. Overall, sales are expected to record steady annual rises with CAGRs of 1% in retail volume and 2% in value terms at constant 2016 prices over the forecast period (2016 to 2021), both of which are improvements over the equivalent performances of the review period (2011 to 2016).

In contrast, drinking milk product players have been consolidating. Demand has continued to decline, especially in shelf-stable category, as many young shoppers consider this type of milk unhealthy option and believe that it contains preservatives.

Pegah Dairy is also the leader in drinking milk products, with a retail value share of 21% in 2016, slightly lower than in 2015. Pegah Dairy has the most productive production line amongst manufacturers in the popular fresh milk category. Its distribution network has also helped its lead position. It also has one of the most visible advertising campaigns in stores.

PROSPECTS

Sales of drinking milk products as a whole are expected to grow due to increased awareness and improvements in the Iranian economy. Overall, drinking milk products is expected to register a value CAGR of 9% at constant 2016 prices over the forecast period (2016 to 2021), some five percentage points higher than the equivalent figure from the review period (2011 to 2016).

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