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Changing Demographics Will Provide Growth Opportunities for Dairy Industry

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Changing Demographics Will Provide Growth Opportunities for Dairy Industry

Changing Demographics Will Provide Growth Opportunities for Dairy Industry
July 13
14:26 2010

Changing demographics will have an impact on the types of dairy products people consume and how they consume them, providing new growth opportunities for the dairy industry, according to the latest edition of the Tetra Pak Dairy Index.

Ageing populations, urbanisation and an emerging global middle class are driving demand for new types of liquid dairy products (LDP) in both developed and developing countries, reports the Tetra Pak newsletter, which tracks worldwide facts, figures and trends in the global dairy industry. Among the trends the report details are:

* Ageing population drives demand for healthy products: The 60+ population is the fastest growing segment in every region of the world due to lower birth rates and higher life expectancy. Dairy producers in countries from Mexico to Greece to Indonesia are offering these consumers products such as milk fortified with calcium, vitamins and minerals that can help reduce cholesterol and protect against osteoporosis — all helping to maintain active lifestyles.

* Urbanisation changes consumer preferences and impacts distribution of LDP: The number of people living in cities is expected to reach more than six billion by 2050 and they are better educated, more brand conscious and have higher disposable incomes than their rural counterparts, according to the United Nations. Dairy producers are starting to cater their products to this group with value-added products such as enriched milk and drinking yoghurt. Urbanisation is also changing distribution models. In Saudi Arabia, for example, dairy producers are now delivering LDP from the countryside to growing urban populations.

* Emerging middle class enjoys new purchasing power: The global middle class is projected to grow from 430 million people in 2000 to 1.15 billion by 2030. These consumers want and can afford other liquid dairy products, such as flavoured milk, to satisfy new food and drink preferences. In China, for example, marketers exclusively target the country’s middle class with premium white milk products such as Milk Deluxe from MengNiu.

“The population in many countries will have more time, money and education than ever before. They’ll also be more active and vibrant. As people live longer, they also plan their lives differently. Dairy producers who can meet the changing needs of this demographic segment will realise significant growth opportunities,” says Tetra Pak president and chief executive Dennis Jönsson.

LDP Consumption Back on Track

Worldwide consumption of milk and other LDP is expected to grow at a compound annual growth rate (CAGR) of 2.4% from 2009 to 2012 — reaching 283 billion litres. This is up 0.2 percentage points compared to the previous forecast of 2.2% CAGR. Worldwide LDP consumption increased year-on-year by 1.8% to 264 billion litres and demand has continued to be strong through the first half of 2010.

Driven primarily by ready to drink (RTD) ambient (or long-life) LDP — with a forecasted CAGR of 5.4% from 2009 to 2012 — global LDP consumption is expected to reach 283 billion litres by 2012. The strongest growth in the RTD ambient LDP category is expected to come from Asia Pacific (8.7% CAGR), Latin America (7.1% CAGR) and Africa (6.9% CAGR).

Stronger-than-expected global consumption of ambient white milk — up 1.3% to 201 billion litres year-on-year — contributed to the improved outlook for LDP consumption overall. Eastern Europe and Africa led the increase in the white milk category, with year-on-year growth of 6.6% and 6.0% respectively.

“It’s a dynamic time in the dairy industry — with milk, as an affordable and nutritious staple, becoming part of the daily diet of more and more people around the world,” point out Dennis Jönsson.

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