French dairy segmentation

Transform to the power of digital
Market Segmentation for a French Dairy
Cooperative
CC India
Jan 2014

Transform the power of digital
Contents
Objective
Cluster Summary
Recommendations
2

The objective of the analysis is to undertake market segmentation to identify new
opportunities around the dairy world
3
DATA
 Data provided on 38 countries:
 Dairy consumption-Consumption of milk, butter, cheese,
cream and whey ( kg/capita/year weighted in milk
equivalent)
 Demographics
 Sources:
 To segment the countries into different groups based on
similarities on account of dairy consumption
 The segmentation should reflect regional behaviors and
specificities
CHALLENGES FACED
 The average for some variables could not be calculated
due to lack of population data
Copyright © 2014 Capgemini Consulting. All rights reserved.
TOOLS USED
 SPSS
 MS Excel
Objective Cluster Summary Recommendations
OBJECTIVE
 It was felt that there was a lot of untapped market potential
in the dairy segment globally
 There was a need to understand the global scenario
BACKGROUND

Contents
Objective
Cluster Summary
Recommendations
4

Based on consumption patterns of four major dairy products the countries were
divided into four categories
5
4.Countries with
moderate cheese
and butter
consumption
3.Countries with low
dairy consumption
2.Countries with high
milk consumption
1.Countries with high
cheese consumption

236
43
172
69
0
50
100
150
200
250
0 1 2 3 4
CLUSTER
0.1
0.38
0.72
0.15
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0 1 2 3 4
CLUSTER
0.89
0.75
0.67
0.89
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0 1 2 3 4
CLUSTER
Whey consumption is not a determinant for these clusters and human
development index(HDI) is taken as a proxy for some demographic variables
6
 Whey consumption was removed as it had an insignificant effect in differentiating clusters
 Clusters are, therefore, formed are on the basis of consumption level of other products(milk, butter, cheese and cream)
 HDI index is used as a proxy for the following variables due to high correlation(around 0.80):
• GDP per capita
• Engertic(Kcal/day/capita)
• Population from 0 to 5 in %
• Population above 70 in %
• Percent of rural population
AVG HUMAN DEVELOPMENT INDEX(HDI) AVG LACTOSE INTOLERANCE INDEX(LII) AVG DENSITY

CLUSTER 1 : European nations with the highest demand for cheese, high per capita
GDP and the highest average density
7
40%
47%
Cheese Cream
 Top 4 consumers of cheese, constituting 40 % of the global cheese consumption
 Belong to the top 7 cream consuming nations, representing 47% of the global consumption
 Amongst the richest 5 European nations, and have the least LII value of 0.10
 Average density, at 236, is the highest for this group
1.Countries with high cheese consumption
France
Italy
Germany
Netherlands
KEY CHARACTERISTICS

CLUSTER 2 : Top milk consuming nations, with a low density
8
36%
Milk
 Among the top 8 milk whole consuming nations, constituting 36% of the global consumption
 Romania is a major outlier, being the top most milk consuming nation with 264 kg/capita/yr, followed
by Sudan at 167 kg/capita/yr
 Has the least average density of 43
2.Countries with high milk consumption
Russian Federation
RomaniaIreland
Ukraine
USA Argentina
Sudan
KEY CHARACTERISTICS

CLUSTER 3 : Countries with relatively low consumption levels of the four dairy
products, low per capita GDP and high lactose intolerance
9
 Cream consumption is negligible for most of the countries
 Represents 43% of the global milk consumption, but none of these countries feature in the top 10 milk consumers,
indicating that the huge aggregate consumption is just the result of a large group
 Countries with low levels of GDP per capita
 Average LII value, at 0.72, is also the highest for countries within this group
…and 15 others
3.Countries with low dairy consumption
Belarus
Brazil
India
Bangladesh
Japan
Egypt
Kenya
Rwanda
KEY CHARACTERISTICS

CLUSTER 4 : Countries with moderate consumption of cheese and butter, but low
consumption of whey and cream, with the exception of Canada
10
 These countries have positive but not very high consumption levels of milk, cheese and butter.
 Canada is an outlier within this group, being the highest global consumer of whey(which is not a determinant in cluster
formation) and cream. Other nations in this group do not consume whey and have negligible cream consumption.
 The average HDI index is 0.89 for this group
 Other countries have the lowest LII of 0.10
4.Countries with moderate cheese and butter consumption
Australia
New Zealand
Canada
United Kingdom
KEY CHARACTERISTICS

Contents
Objective
Cluster Summary
Recommendations
11

The dominant demands for specific dairy products in different segments provide an
opportunity to the French cooperative to undertake properly targeted strategies
12
CLUSTER Milk Butter Cream Cheese Recommendations
HIGH
CHEESE
Belong to the top
11
Belong to the
top 7
Biggest 4
consumers
globally
•Focus on cream and cheese
•Higher prices could be charged
•Low distribution cost
HIGH MILK Belong to the
top 8
All have positive
consumption
•Target Romania’s milk market
LOW
DEMAND
22 belong to the
bottom 27
18 belong to the
bottom 21
17 belong to the
bottom 21(10
do not
consume)
Are the least 18 •Start at a small scale to assess the
market
•Offer cheaper products
MODERATE Belong to the top
13
Canada is the
biggest global
consumer
Belong to the
top 14
•Target Canada’s whey market

13

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