Dairy packaging demand forecast to rise 4 per cent
per cent annually, according to a forecast from Freedonia.
The forecast report indicates the kind of moves dairy packagers are making in a flat market, one in which consumer preference is shifting from one segment to another.
Growth in the segments will be fueled by favorable trends in consumption of a number of dairy products, resulting from increased nutritional awareness among consumers andheightened demand for fresh foods as part of a healthier diet, Freedonia stated. Overall demand for dairy packaging is projected to expand 4.1 percent annually to $4.3bn in2010, Freedonia stated.
" Although aggregate per capita consumption of dairy products will remain essentially flat, packaging demand willbenefit from trends such as expanded offerings of dairy items in smaller convenience-oriented container sizes and favorable growth in spending on food eaten or preparedaway from home," the research company stated.
Demand for cultured dairy products and cream is forecast to be the fastest growing segment. Above-average expansion for cultured dairy applications will be led bycontinued expansion in yogurt consumption and a host of new product introductions.
These include expanded varieties of drinkable yogurt, products targeted at children, and functional types offering health benefits beyond standardnutrients, Freedonia stated.
Packaging demand will be further aided by the popularity of smaller multipacks and even faster growth for drinkable yogurt, which is packaged in bottles rather than lesscostly cups, the company stated.
Cream applications will be driven by continued solid growth in coffee houses and rapidly expanding sales of coffee in other away-from-home venues, such asconvenience stores and quick service restaurants, the firm forecasts.
While per capita milk consumption is expected to continue to decline, the shift to single-serving plastic bottles in favor ofgabletop cartons in schools and quick service restaurants tends to boost milk sales in such venues.Freedonia expects such an increase will boost packaging demand as well.
Demand for pouches and bottles will also be big growth areas, with tubs and cups also expected to record above-averageincreases. Pouch demand will be fueled by an increased demand from cheese processors, along with faster gains in frozenand cultured dairy segments.
Demand for bottles will be helped by a robust preference for single-serving plastic containersfor milk and drinkable yogurt. Tub and cup demand will be driven by favorable expansion in cultured dairy applications.
"However, limited volume growth in frozen dairy and cream cheese production will moderategains," Freedonia stated. "Slower expansion for cartons and boxes, and bags and wrap will result from the presence of mature applications as wellas inroads by bottles and pouches."
Freedonia forecasts that milk packaging demand will grow by 3.8 per cent annually, cheese by 4.6 per cent, frozen products by 3.9 per cent, and cultured products 12.8 per cent.
The US produced about 20.9 bn gallons of milk in 2005, worth about $27.4bn. About 33 per cent of the total milk supply went intobeverage milk, milk products, and cream and cream products. Another 39.6 per cent was used to makecheese, 13 per cent butter and the rest frozen dairy products and evaporated and condensedmilk.
