Ich liebe Kerrygold

Cantillon: Butter-maker Ornua to spread farther into US after beating Germany

Kerrygold butter: a legal case in California claiming “false and misleading advertising”  was thrown out.

Kerrygold butter: a legal case in California claiming “false and misleading advertising” was thrown out.

 

A standard 250g block of Kerrygold butter was the fastest-selling food or drink item on German supermarket shelves last year: “fastest” meaning the most often sold. According to Ornua, formerly the Irish Dairy Board (IDB), it sold out more quickly than a standard one litre bottle of Coca Cola, which typically tops the rankings.

Kerrygold pitches itself as a premium product, no mean feat in the price-conscious German market. Advertisements call it “the green isle’s gold”, playing on the German people’s traditional view of Ireland as an unspoilt pasture.

Since its launch in 1973 by then chief executive Tony O’Reilly, it has grown into Ireland’s biggest-selling food brand, generating close to a €1 billion in annual sales.

Having conquered the German market, Ornua now has eyes on an even bigger prize, the United States, where Kerrygold is already the number-two butter brand.

Legal case

However, last year it found itself embroiled in a legal case connected to its global marketing campaign, which plays up the grass-fed nature of the cows that supply its milk. This is what makes the butter more yellow and makes it taste better than generic equivalents, according to Ornua.

However, the legal case taken in California, traditionally a bellwether of consumer trends, claimed this constituted “false and misleading advertising” as Irish cows eat other materials, such as grain or soya, when weather is bad and some of these feeds can be genetically modified.

While the case was thrown out, the publicity around it would not have been helpful to the Irish brand.

An even bigger fly in the ointment, however, might come from one of its own shareholders, Glanbia, which announced plans to launch its own butter brand in the US. When asked if this had created tensions, a spokeswoman said: “There is no tension. Ornua has been operating in global markets for over 55 years. We will always face competition in the marketplace, it comes with being very successful in a market.” This sentiment might change if Glanbia’s butter proves a hit with US consumers.

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