Churning Onward

Gunnar Birgisson’s journey as an entrepreneur has seen many unexpected detours. As the CEO of Reykjavik Creamery – an American dairy processing plant located in Newville, Pennsylvania – Gunnar’s story spans both continents and conmen, bringing him from Akureyri to Denmark to California in search of a way into the US dairy industry, where he would eventually carve himself a niche specialising in skyr production using ultra-filtration technology – the natural way to optimise the nutritional value of fermented dairy products.

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Skyr Exhibition Opens in Selfoss

The history of skyr production and consumption is the subject of a new exhibition that was just opened in Selfoss, South Iceland. Called Skyrland, the exhibition tells visitors the story behind Iceland’s characteristic dairy product, from the first settlers to the 21st century. The exhibition is located in Selfoss’ newly built city centre in the same building as a food hall.

At Skyrland “You’ll discover how 40 generations of women passed their skyr-making knowledge down, from mother to daughter, and how the story moved from isolated turf-roofed farms, to the world,” the exhibition’s website states. The exhibition features stops for all senses, including a “story wall,” an immersive scent exhibit, and even a tasting session for those who want to try the delicacy.

Skyr is a high-protein, low-fat, cultured dairy product. It is technically a cheese but it is consumed like a yogurt. Skyr has a sour flavour and is produced and sold commercially with added flavouring like blueberry or vanilla. It has been a staple of the Icelandic diet for centuries and is even mentioned in a number of Medieval sagas. Cultural historian Hallgerður Gísladóttir has suggested that skyr was produced across Scandinavia at the time Iceland was settled, but the tradition was lost elsewhere after that period.

Icelandic Skyr Cheaper Abroad Than in Iceland

Ísey brand skyr is cheaper in grocery stores in Finland and Britain than it is in Iceland, Vísir reports. But although some Icelandic consumers are crying foul, the Icelandic dairy cooperative MS Dairies says that there are several perfectly good reasons for this price discrepancy, not least that skyr sold abroad is not actually made in Iceland, but rather produced at a lower cost in Jutland, Denmark and then exported to other countries.

“I can buy Ísey skyr in Finland for 40% cheaper”

Ísey skyr is exported widely and is available throughout Europe, as well as in the United States and Japan. A number of frustrated Icelanders have shared photos on social media of cheaper Ísey shelf prices in other countries.

“Is there any reason that it’s cheaper to buy Icelandic skyr in England than in Iceland?” asked lawyer María Rún Bjarnadóttir in a Facebook post this spring showing 170 grams [5.9 ounces] of skyr for sale at 99 pence—the equivalent of ISK 150 [$1.20; €1.09]. “I bought Rioja red wine for £5 at the same time. But of course we have to have restrictions on competition among dairy products and ban the sale of alcohol in grocery stores in Iceland. Of course.”

Author Þórdís Gísladóttir made a similar observation in Finland earlier this month. “I can buy Ísey skyr in Finland for 40% cheaper than in Iceland,” she tweeted. At €0.99, skyr sold in Finnish grocery stores would come out to roughly ISK 137 [$1.09].

By comparison, the same size tub of skyr sold in Icelandic grocery stores goes for ISK 175 [$1.40; €1.27] at Bónus, ISK 178 [$1.43; €1.29] at Krónan, and ISK 189 [$1.51; €1.37] at Nettó.

Skyr sold abroad “not connected to Icelandic agriculture”

When price comparing, however, Sunna Gunnars Marteinsdóttir, Communications Director for MS Dairies, urges Icelanders to keep in mind that MS sells its products wholesale and that food prices are determined by the free market in Iceland and elsewhere.

Moreover, she said, the skyr sold in the UK and Finland is produced in Denmark and as such is “not connected to Icelandic agriculture” as she said is made out in the aforementioned social media posts.

Sunna also said that although there are price discrepancies, Ísey skyr sold in Iceland and abroad is still all in the same general price range. As an example, she noted that skyr sold in Finland is priced anywhere from ISK 136 [$1.09; €0.98] to ISK 275 [$2.20; €1.99], depending on what kind is purchased. Similarly, she said, skyr sold in Iceland ranges from ISK 125 [$1.00; €0.91] to ISK 309 [$2.48; €2.24] in price.

She also noted that the Icelandic dairy industry is a small one, and necessarily less efficient than larger operations abroad. MS Dairies has an annual turnover of ISK 28 billion [$224 million; €203 million], as compared to other (unspecified) producers that have a turnover equivalent to ISK 500 – 2,000 billion [$4.10 billion – $16.43 billion; €3.62 billion – €16.04 billion].

Other factors to consider

The SA Confederation of Icelandic Enterprise also weighed in, saying that other factors need to be taken into account when making price comparisons. Purchasing power makes a big difference, SA argued, as well as how long Icelanders have to work to pay for monthly groceries.

“According to information from OECD [Organisation for Economic Co-operation and Development], average hourly pay after income tax was 55% higher in Iceland than in Finland and the prices of food and beverages were 30% higher according to information from the EU Statistics Office,” read an SA assessment from the beginning of the year. The assessment concludes that purchasing power in Iceland is 20% higher than it is in Finland.

Based on these figures, it took Icelanders an average of eight hours to earn enough to cover their monthly food costs, versus the 9.5 hours it took Finnish people to buy the same amount of food.

Icelandic Milk and Skyr Corporation Sold for (At Least) ISK 40 Billion

The Icelandic Milk and Skyr Corporation, founded by Sigurður Kjartan Hilmarsson in 2006, is estimated to have been sold for a minimum of ISK 40 billion [$370 million; €323 million], Kjarninn reports. The company was sold at the beginning of last year to French dairy corporation Lactalis, but the sale price was kept confidential.

Sigurður shared the majority stake in his company, or 78%, with a handful of friends and relatives. The remaining 22% stake was held by the Swiss dairy company Emmi. Emmi sold its minority stake in the company to “profit significantly from this transaction in the financial year 2018.” In fact, according to its recently published financial reports for the first part of 2018, Emmi made a profit of $80.9 million [ISK 9.68 billion; €70.35 million] on the sale of its minority share in The Icelandic Milk and Skyr Corporation, or $58.9 million [ISK 7.05 billion; €51.2 million] after taxes. Thus were journalists at Fréttablaðið able to make an educated estimate as to the final total sales price of The Icelandic Milk and Skyr Corporation.

In the run-up to the sale, it was estimated that in 2018, the sales revenue from Siggi’s Skyr, The Icelandic Milk and Skyr Corporation’s marquee product, would come close to $200 million [ISK 22 billion; €173.9 million].