Sekretariat

Birgit Prietzsch
Institut für Marktanalyse

 

Bundesallee 63
38116 Braunschweig
Telefon: +49 531 596 5302
Fax: +49 531 596 5399
ma@thuenen.de


No-name products in the dairy sector: A blessing or a curse?

Project

 (c) Thünen-Institut / Marktanalyse

Impacts of no-name products (dairy) on market shares and price development

The dairy market develops turbulently. Prices of dairy products for milk producers, processors and consumers ride on a roller coaster. Today a large share of the raw milk is sold as no-name products.  Is this a blessing or a curse for the actors?

Background and Objective

In the past ten years prices of agricultural products have become more volatile. In particular, price peaks and drops have reached so far unknown dimensions.

 

Milk producers, processors as well as retailers and consumers have to cope with that new market framework. It appears that especially milk producers are subjected to a high competitive pressure when market prices are low. This often jeopardizes their economic existence.

 

Identifying possible causes for the poor economic situation of milk producers in phases of low market prices is essential to better understand competition processes of the dairy market. This is particular relevant for the marketing of dairy products. No-name products play an important role, because large parts of dairy products take part as no-name products. As sales opportunities of branded products with higher added value are limited, no-products represent a possibility to mitigate market pressure. Thus, we have to review if competition is effective or is impeded by the rise of no-name products.

Target Group

Economy and policy.

Approach

Analysing competition processes at the level of retailing with simultaneous consideration of consumer behaviour is only possible if data of a consumer panel is utilized. We therefore analyse a data set of the ‘Gesellschaft für Konsumforschung’ (GfK) which comprises the following categories of products:

  • Butter
  • Dutch type cheese to specialised cheese
  • Drinking milk
  • Yoghurt

The analysis covers the period from January 2012 to December 2015. We are applying the following research methods:

With methods of descriptive statistics we outline the development of the market share of no-name products in the above mentioned categories of products over time.

By applying a hedonic price analysis we can capture the relationship between the price and the characteristics of a product. With this knowledge we can draw conclusions about consumer behaviour.

The question of market power and of a possible abuse of that power by retailers cannot be answered directly with this type of data. However, with specialized econometric techniques we can collect indicators.

Our Research Questions

We consider the development of the market share of no-name products (dairy) in retailing since 2009:

  1. How are no-name products utilized in this market segment and which consequences arise for branded products?
  2. Which conclusions can be drawn with regard to consumer behaviour? What will be the future development?
  3. How influences this development competition? Are there possible impacts on price development at the level of retailers and producers? How affect this this market setting price changes and price transmission to consumers?

Thünen-Contact


Duration

2.2018 - 12.2020

Publications

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