Drinking milk and milk-based beverages offer great potential for growth in the dairy industry

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Drinking milk and milk-based beverages offer great potential for growth in the dairy industry

July 30
09:10 2013

The world´s thirst for milk is growing in the true sense of the word:
because in the growth markets milk is indeed mainly consumed as a drink.
Not surprisingly, therefore, the dairy industry is keenly interested in the
processing, filling and packaging technology for beverages and liquid food
on show at drinktec between September 16 and 20, 2013. And also in the
broad spectrum of ideas and raw materials for innovative beverages
concepts. For professionals in the international dairy industry, drinktec
has long been a firm date in the diary.

Almost half of the exhibitors at the show are presenting technological solutions
for milk processing. When compared with the last drinktec, this sector has thus
expanded by around 10 percent. The major associations, too, have long since
recognized that drinktec is becoming ever more important for the milk industry.
The Central Association of German Dairy Business Owners (Zentralverband
Deutscher Milchwirtschaftler – ZDM) and the Association of European Dairy
Industry Learning (Association Européenne des Diplômés de l`Industrie Laitière –
AEDIL) are making use of drinktec 2013 as a platform for networking and
exchange of ideas. The members will also hold their association conferences
within the framework of drinktec 2013.

One not-to-be-missed attraction at drinktec for product developers and
marketing experts in dairies and liquid food manufacturers is the “Special Area
New Beverage Concepts” in Hall B1. At this interactive market place new
sweetening, coloring and aroma strategies will be presented and explained by
the various manufacturers. And on the Friday of the show, too – September 20, 2013 –                             drinktec 2013 will be shining the spotlight on milk. In the forum program
in Hall A2 dairy technicians, beverages manufacturers, engineering offices and
also marketing experts will be able to update themselves on current themes
affecting the milk segment. This will include, for example, sustainability concepts
and energy management in dairy operations.

The German milk market: Exports are becoming ever more important
The German milk market grew further in 2012. Including the deliveries from
producers in neighboring EU countries, the dairies have for the first time
collected and processed more than 30 million tonnes of milk. The strongest
growth has been in exports of packaged drinking milk to third countries. By
contrast, according to GfK Consumer Tracking, in the first ten months of 2012
German households bought 2.2 percent less drinking milk than in the same
period in 2011. Away-from-home consumption, which not least reflects the
increasing popularity of coffee specialties, was able to compensate for this slight
downturn, but the final figure for the German domestic market again remained
more or less constant. Exports are playing an ever more important role in the
German milk industry.

Drinking milk is ever more popular in Asia
Market surveys by Euromonitor underline the globally very positive picture for
the dairy industry. Worldwide milk production is expected to increase from the
current level of 126 billion liters to around 137 billion by 2015. The forerunners in
this trend, with the biggest rates of increase, will be Asia and the Pacific Region.
Here Euromonitor sees volumes growing from 31 billion liters today to 37 billion,
while consumption in Europe and North America is set to stagnate at a high level.
In many of these strong-growth countries milk is consumed mainly as a
beverage. In China, for example, the drinking milk proportion of the overall
volume of milk processed, is over 90 percent. In Germany, by comparison, it is
at around 20 percent. That means that the majority of the volume growth needs
processing, filling and packaging technology, such as is on show at drinktec, the
world´s uncontested No. 1 exhibition for the sector. Torsten Sach, Managing
Director of ZDM, comments: “All the technologies that are used in the beverage and                                            liquid food sector and are on show at drinktec 2013, are not only interesting
for our members, they are an essential part of their knowledge.”

The positive outlook for the international dairy industry is confirmed by Swedish
packaging specialist Tetra Pak. Their research shows that, driven by high
demand in the emerging countries of Asia, Africa and Latin America, worldwide
consumption of liquid milk products will rise between 2011 and 2014 by an
average of 2.9 percent per year.

The “middle classes of tomorrow” are switching to packaged milk
A key part in this growth, according to the latest Tetra Pak Milk Index, will come
from the population group that can be described as the “middle classes of
tomorrow”. This group comprises around 50 percent of the population of the
developing countries and consumes 38 percent of the liquid milk products. And
their thirst for milk is rising rapidly as their prosperity increases: The figure of 70
billion liters in 2011 is set to reach almost 80 billion by 2014. Also many of these
consumers are seen as switching in the coming years from unpackaged to
packaged milk products.

However, there are certain technical hurdles to be cleared in opening up this
very attractive market. For example the kind of products offered have to be
affordable, available and attractive for low earners. What´s proposed in this
context is the use of alternatives to full-fat milk, such as whey or lactic acid, in
order to be able to produce nutritious and healthy milk products cost-effectively.
Another strategy is to go for smaller pack sizes or simpler packaging.

Rising innovations pressure in new products and new markets
Globally, in the period from 2011 to 2014, Tetra Pak sees the fastest growth
rates in beverages based on lactic acid, in milk for infants and small children,
and in aromatized milk. Beverages based on lactic acid are set to rise fastest,
with an annual average increase of 11.9 percent, followed by milk for infants and                                            small children at 9.0 percent p.a. on average. Aromatized milk is in third place,
with expansion rates predicted at an annual average of 4.8 percent.

Torsten Sach sums up the challenges facing the dairy industry in the light of this
ever more international and segmented background: “The range of products we
offer is subject to constant change. The pressure to innovate in new products
and new markets is rising. Against this background a glance at other sectors is
not only interesting, it is a must. That´s why, by holding its annual conference at
drinktec 2013, ZDM is offering its members the chance to look beyond their own
immediate area and benefit from the experience of other sectors.”

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