Tetra Pak Forecasts Global Growth and New Markets

GLOBE - Global consumption of milk and other liquid dairy products is expected to increase by a compound annual growth rate (CAGR) of 2.2 per cent over the next three years, according to research released today from Tetra Pak, the world leader in food processing and packaging solutions.
calendar icon 1 June 2009
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The forecast is contained in the Tetra Pak Dairy Index, a new biannual report on consumption trends in the dairy industry that is designed to help dairy producers identify opportunities for growth.

According to the Tetra Pak Dairy Index, in 2008, global consumption of liquid dairy products, excluding soy and dairy alternatives, reached a record high of 258 billion litres. This marks a worldwide increase of 1.6 per cent over 2007 — an additional four billion litres. Over the past four years, global consumption of milk and other liquid dairy products has grown by a CAGR of 2.4 per cent, despite a sharp spike in prices over the past two years, which saw milk prices increase by up to 75 per cent in some markets before stabilising in late 2008.

Dennis Jönsson, President and CEO of the Tetra Pak Group, said: “Milk is a basic food staple, which is considered part of a healthy and nutritious diet for all ages all around the world. We expect two trends to continue to drive global milk consumption over the next three years: continued growth in emerging markets and a shift toward consuming more packaged milk. Packaged milk continues to grow, based primarily on health and safety concerns and also a desire for more convenience to suit busier, more mobile lifestyles.”

Emerging markets account for nearly 96 per cent of global consumption growth

Leading much of the growth in the global dairy industry — 95.8 per cent over the past four years — are emerging markets, such as India, Pakistan, China and the Middle East, reports Tetra Pak. These markets are experiencing fast growth in the consumption of milk and other liquid dairy products based on growing populations, rising household incomes, new dietary trends and increased awareness and availability of dairy products.

For example, from 2005 though 2008, consumption of liquid dairy products in China has grown by CAGR of 13.4 per cent, reaching a record high of 27 billion litres in 2008. This number increases to 39.4 billion litres when including soy and dairy alternatives such as rice, nut, grain and seed-based milks.

Packaged milk expected to reach 72 per cent of global consumption by 2012

Another factor driving growth, particularly in emerging markets, is a fundamental shift in the way liquid dairy products are packaged and consumed. From 2005 to 2008 the global market share of unpackaged milk declined by 1.8 per cent. During the same time period, the global market share of Ultra High Temperature (UHT) milk (milk which can be shipped and stored before opening without requiring either refrigeration or preservatives) increased by 3.2 per cent

Consumers economise and stick to basics in current economic climate

More than 31 per cent of consumers are concerned about having enough money to live well and pay their bills, according to recent research from GfK Roper Consulting. This is prompting consumers of dairy products to increasingly buy budget or private label brands when available, For example, in Western Europe, sales of private label products now represent nearly 36 per cent of total white milk sales.

“In today’s economic climate, we would anticipate that many consumers will go back to basics,” said Jönsson. “For example, they may substitute white milk for higher priced, more value-added products like yogurt drinks or they may buy budget brands rather than premium brands. Even so, we expect the global dairy market to experience steady growth for the foreseeable future.”

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