Integrated Dairy Middle East | Market research and operational analysis

The problem

The client

The client on this project was a major integrated dairy company based in the Middle East, known for its diverse portfolio of dairy products, including fresh milk, yogurt, laban, flavoured milk, UHT milk, cheese, butter, labneh, and desserts. They process more than 1 million litres of milk a day, employ over 400 staff, operate a state-of-the-art dairy processing facility, and rear more than 25,000 cows.

Background

The dairy industry in the Middle East is poised for significant growth, driven by an increasing demand for dairy products and backed by government-led initiatives. Numerous Middle Eastern governments have actively promoted self-sufficiency in dairy production as part of their economic diversification and national food security efforts. State owned enterprises have invested heavily in large-scale dairy farms and processing to boost local production capacity. As a result, the region has seen a substantial increase in domestic milk production, reducing reliance on imports and positioning some countries as emerging exporters of dairy products to neighbouring markets.

At the same time, consumer trends are shifting towards a preference for healthier, locally produced dairy products. Demand is increasing for organic options and diverse product offerings like flavoured milk and yogurts as younger, more health-conscious consumers push for products that not only taste good but also offer added nutritional benefits.

Seeking to capitalise on these growth opportunities, the client sought to develop a greater understanding of market dynamics, competitive positioning, and consumer preferences. They engaged Farrelly Mitchell to conduct a detailed market research study that would provide a comprehensive analysis of the dairy market in the region and guide their strategic initiatives. Key areas of focus included market size and segmentation, competitive landscape, consumer preferences, and pricing strategies.

The solution

Farrelly Mitchell’s dairy consultants designed a structured, multi-phase market study, aimed at gathering and analysing critical market information and converting our findings into actionable recommendations.

The initial phase involved drafting and issuing a request for information (RFI) to the client, reviewing project objectives, and conducting a project kick-off workshop with the client’s senior management to align expectations and scope. Subsequent steps included:

Phase 1: Market landscape overview

Our team conducted a comprehensive analysis of the dairy market, examining its size, segmentation, and five-year growth projections. This analysis focused on key areas including milk production, import/export dynamics, and domestic consumption patterns. We mapped significant industry developments over the past five years, paying particular attention to government policies that have shaped the market.

We also assessed current trends, market drivers, and potential restraints. This enabled us to develop informed projections for future demand growth across various product categories. To provide a holistic view of the market, we combined quantitative data with qualitative insights. This multi-faceted approach allowed us to create a detailed picture of the dairy industry’s current state and future prospects.

Phase 2: Competitive Assessment

Our consultants reviewed the region’s dairy market and identified several key competitors. This included identifying regional powerhouses who had garnered significant market share across multiple dairy categories as well as other notable competitors. Our experts assessed the supply volumes, market shares, and competitive advantages and sales and distribution practices of these competitors.

This review extended to understanding their strategic focuses, be that on price competitiveness, product differentiation, or brand loyalty. These evaluations provided clear insights into the competitors market positioning and informed our strategic recommendations for enhancing our client’s competitive edge. We also considered the potential for new entrants, which could disrupt the Middle East’s dairy market dynamics.

We identified several ways that the client could expand its range of value-added products and fortify its presence in underexploited segments.

Phase 3: Pricing review

Our analysis focused on evaluating the pricing strategies of our client in comparison to the key competitors identified in the “Commercial Assessment”. The pricing review sought to align the client’s pricing policies across its entire product portfolio with market conditions while considering the competitive landscape and consumer price sensitivity.

We analysed consumer price sensitivity and its impact on purchasing decisions, particularly in segments where healthier, organic options are becoming increasingly popular. This analysis helped in understanding how price adjustments could affect demand elasticity in these growing segments.

We identified several different product lines and consumer segments that could benefit from dynamic, segment-specific, promotional and introductory pricing strategies. We also established a systematic process that enabled the client to regularly review and adjust prices to ensure they remain competitive and reflective of current market conditions, consumer expectations, and cost structures.

Phase 4: Opportunity assessment

In the final phase of our market research study, we conducted a thorough opportunity assessment to identify and prioritise growth areas for our client within the Middle East dairy market. This assessment was based on the insights gleaned from the previous phases of the study. We focused on strategic opportunities that could leverage the client’s strengths and address potential market gaps.

Our analysis identified several key opportunities for market expansion, including both Geographic Expansion and Product Line Extensions. We explored how the client could develop value-added products and adopt innovative packaging solutions that would enhance their brand and market presence. We also outlined how forming strategic alliances with community development programs, health sectors and local farming communities could strengthen their brands and open new channels of distribution.

Lastly, we recommended investing in specific technologies that would enhance data analytics capabilities and improve operational efficiency while reducing costs, and boosting product quality.

The results

Our market research and operational analysis enabled the client to fine-tune their pricing, differentiate their products, and address gaps in the market, resulting in an increased market share across multiple dairy categories within the Middle Eastern market.

By implementing the insights and strategic guidance we provided, the client has successfully opened up new distribution channels, and is well-positioned to further their business growth and strengthen their competitive positioning. Furthermore, as the client continues to adopt the technological and operational improvements we recommended, they will experience significant cost reductions, enhanced product quality, and improved operational efficiency.

Farrelly Mitchell, dairy Middle East consultants

At Farrelly Mitchell, our expert agribusiness consultants can bring clarity to complex markets and facilitate informed commercial decision-making. We excel at identifying emerging opportunities for growth in dynamic markets and providing strategies to seize them. Our insights are based on decades of practical industry experience and informed by global best practices in the food and agribusiness industry.

We provide a suite of commercial and technical services in support of our client’s interests, including market intelligence, due diligence, feasibility studies, risk management, and more. To learn more about our services, transform your operations, and reposition your agribusiness for growth, contact our team today.