Spain’s dairy market shifts and Danone’s plant closure plan
Spain shows a modest use of milk and a lower intake of yogurt, while other dairy products such as smoothies and ice cream remain part of the daily diet. This gradual decline in dairy consumption has driven strategic moves by large food groups, including Danone, which recently announced restructuring steps that include closing the Parets del Vallès plant near Barcelona. The move is framed as a local process, yet it highlights a broader trend affecting brands like Oikos and Vitalinea yogurts, along with the Alpro line of plant based alternatives.
Official data from the Ministry of Agriculture and Food indicate that dairy consumption hit a new low last year, with monthly statistics showing a sharp downturn in Spain’s dairy purchases. By August 2023, year-on-year consumption was about 20 percent below the level seen in the same month a year earlier. The declines touched virtually all major dairy segments, including milk shakes down 10.4 percent, yogurt down 2.4 percent, smoked cheeses down 7.5 percent, sheep cheese down 11.5 percent, and puddings down 3.9 percent.
Among yogurt varieties, fruit flavored options experienced a substantial drop as well, with volumes shrinking by 44 percent in a single year. Yogurts with additives fell 17.5 percent, and lean yogurts fell 13.9 percent. In contrast, flavored yogurts managed a modest gain of about 10 percent.
The ongoing decline is not new to producers. The dairy industry has already begun a set of optimization moves in response to softer demand and rising competition from milk alternatives and plant based desserts released in the market. Price changes have also played a role: skim milk prices rose by roughly 15.1 percent and yogurt by about 8.6 percent between summer 2022 and 2023.
Danone Spain has stated that the Parets facility will be eliminated through a local process, a decision that underscores the broader business review under its Renew Danone strategic plan. Company leadership highlighted that the third-quarter 2023 results already show early signs of the plan paying off. European sales for the group rose by 5.1 percent year over year, boosted by higher prices which contributed to a 9.2 percent gain in revenue, while overall product volume saw a moderate decline of 4.1 percent. These numbers illustrate how the company is balancing price, volume, and portfolio adjustments in a market marked by evolving consumer tastes and heightened competition from dairy alternatives. Source assessments from the company’s quarterly disclosures and national statistics provide the backdrop for this transition.