The packaging supplier says that the liquid dairy segment, which includes drinking milk as well as evaporated, flavoured and even baby powder varieties, will defy concerns over the economic downturn to grow over the next three years at a compound annual growth rate (CAGR) of 2.2 per cent.
The findings, which form part of a recently launched biannual report called the Tetra Pak Dairy Index, suggest that milk products, through innovations like packaged formats, are well placed to meet consumers demands in both emerging and established markets.
The report has been launched to help dairy groups track upcoming industry trends, according to the packager.
Global product
Tetra Pak president Dennis Jönsson suggests that as a basic food staple around the world, milk can meet seemingly westernised needs for value and even private label nutrition alongside emerging market concerns about food safety and convenience.
“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,” he states. “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.”
Among the key trends identified in the index, 258 billion litres of liquid dairy products, excluding soy and dairy alternatives, were consumed during 2008, a figure up by 1.6 per cent since 2007 amounting to four billion litres.
The findings suggest that milk is particularly adept at surviving difficult economic circumstances with CAGR up during the previous four years by 2.4 per cent, despite record prices recorded back in 2007. Prices for this product at the peak of this value surge saw milk costing up to 75 per cent more, claims the index.
In looking to the future, Tetra Pak says that emerging markets, increasingly focused on by a number of multinationals, will be central to milk consumption growth. Company estimates suggest markets in India, Pakistan, China and the Middle East could amount for 96 per cent of consumption growth.
“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,” the index states.
Fundamental shift
According to the findings, the changing global market for dairy products reflects a ‘fundamental shift’ not just in how milk is consumed, but packaged as well. Between 2005 and 2008, the index suggests that the market share of unpackaged milk fell by 1.8 per cent as Ultra High Temperature (UHT) varieties posted stronger growth.
Over the same period, Tetra Pak says that UHT milk, which can be shipped and stored free from preservatives and without refrigeration, has increased its own share of the market by 3.2 per cent.
UHT products are expected to maintain growth in the coming years, with the company estimating CAGR of 5.2 per cent up to 2012, amounting to 70 billion litres.
“In fact, consumption of packaged milk and other liquid dairy products is growing faster than the entire liquid dairy category, and is expected to reach more than 72 per cent of total global consumption by 2012,” states the index.
Besides a growing reliance on packaged convenience for milk, Tetra Pak adds that budget is also another key factor influencing growth. In Western Europe alone, private label sales were found to account for 36 per cent of white milk demand.
The findings, citing analysis by GfK Roper Consulting, claim about 31 per cent of consumers are concerned about budgeting for their lifestyles and living well, prompting growing interest in more budget focused brands.
Dennis Jönsson says Tetra Pak is therefore expecting customers going back to basics when it comes to products like milk.
“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,” he states. “Even so, we expect the global dairy market to experience steady growth for the foreseeable future.”