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Ornua, which exports 60% of Ireland’s dairy, will formally open its new state-of-the-art Kerrygold butter factory in Mitchelstown, Co Cork, on Wednesday. The €36m investment will see production of all Kerrygold retail packs produced in Ireland move to the new facility.
The factory has been under construction for the past two years and started test production earlier this year.
Located on Dairygold’s Castlefarm milk processing complex outside Mitchelstown, the factory will be supplied with cream from Dairygold and Carbery along with bulk butter from other processors around the country.
According to Ornua, this factory will improve the quality and consistency of the iconic brand which exports to markets as far apart as the US, China, Africa, and the Middle East.
This facility will sit alongside Ornua’s Kerrygold packaging plant in Germany, which packages Irish butter for the German market.
Global demand
Butter production increased 20% in Ireland last year to reach almost 200,000t.
Global butter demand has never been higher, with US consumers driving the increase. And Kerrygold butter has benefited from this growth.
The Kerrygold brand has been hugely successful since its launch in 1962, with the aim to get beyond the commodity market in the UK and achieve a higher market price that could be returned to farmers.
Dr Tony O’Reilly, who was CEO of An Bord Bainne at the time, is credited with coming up with the name.
The grass-fed difference
When Ireland became a member of the European Economic Community (EEC) in 1973, it paved the way for Kerrygold to gain access to the highly lucrative German consumer. It is now on its way to become Ireland’s first billion dollar food brand, and is the number one butter brand in Germany.
In the US, it is the number one imported brand and is the third brand overall.
Increasing awareness of the nutritional benefits of choosing butter from grass-fed cows has allowed Kerrygold to benefit from resurgence in butter sales.
In June 2014, Time Magazine published a front cover exhorting their readers to "eat butter". There is a clear trend in the market that butter is back. In addition to the nutritional benefits associated with sustainably produced butter, consumers state clearly that there is a taste difference and that it is better to cook and bake with. This difference is what Ornua refers to as "the grass-fed difference" and it is key to the increasing popularity of Kerrygold Irish butter.
Post-quota era
Ornua’s drive to secure new high-value outlets for Irish dairy products has seen the business make significant investments in the US, Germany, the UK, Saudi Arabia, and Spain.
Over the last five years, Ornua has invested over €200m in growing its brands, in innovation and in opening new production facilities and offices around the world.
This factory, which has been described as a “centre of excellence” for Kerrygold butter production, includes a research and development facility that will lead to development of new and innovative butters to continue to increase value for Irish milk.
Kerrygold Park will support the global development of the Kerrygold brand, which will be a valuable outlet for the expanded milk output in a post-quota era.
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