Tetra Pak Dairy Index predicts consumption growth

The Tetra Pak Dairy Index shows that consumption of ambient milk and other ambient liquid dairy products (LDP) across developed markets is projected to grow by 0.6 per cent from 2008 to 2009.

This growth comes during a period of worldwide economic recession, with total LDP consumption (ambient and chilled) in developed markets expected to dip by 1.2 per cent from 2008 to 2009.

According to the Index, total global consumption of milk and other LDP is expected to grow by 1.3 per cent from 2008 to 2009.

By the end of 2009, worldwide consumption of LDP is expected to reach 263 billion litres - up from 259 billion litres in 2008.

This figure increases to 284 billion litres when soy milk and other dairy alternatives such as rice-, nut- and seed-based milks are included.

Tetra Pak is forecasting that total global LDP consumption will grow at a compound annual growth rate (CAGR) of 2.2 per cent from 2009 to 2012 - in line with its projection earlier this year.

Much of this growth will be led by developing markets - which have driven 95.8 per cent of global LDP consumption growth from 2005 to 2008 - due to factors such as population growth, rising incomes and the relative novelty of liquid dairy products.

Developed markets, which represent around one third (32 per cent) of global LDP consumption, face a tougher situation because many have already high per-capita milk consumption rates.

For example, Ireland leads the world in per capita consumption of chilled and ambient milk products at 160l per person per year compared to per-capita consumption of 19l per year in China.

The Tetra Pak Dairy Index highlights that producers in developed markets are not standing still and are finding new ways to maintain growth.

Michael Zacka, vice president, Marketing and Product Management, Tetra Pak, said: 'In developed markets such as North America, Western Europe and Australia, where milk consumption is already high, dairy producers are driving growth by developing products and consumption occasions, promoting milk in appealing ways, catering to consumer trends and promoting the benefits of long-life products.

'For example, in Canada dairy producers are positioning long-life milk as an attractive product for use at vacation cottages and on camping trips where refrigeration is difficult.

He added: 'In Spain dairy producers have driven growth by establishing a segment in fortified and functional milk.

This includes milk with added calcium for healthy bones and milk with Omega 3 for healthy hearts.

One of the key areas of growth worldwide - in both developed and developing markets - is ambient (long-life) LDP.

In developed markets, the focus of the current issue of the Tetra Pak Dairy Index, ambient LDP consumption is expected to reach a CAGR of 0.7 per cent from 2009 to 2012.

Driving this growth in developed markets are four main factors.

The first is a general trend toward health and wellness, which is driving demand for enriched products often sold in ambient packages.

In Spain, due to health promotion efforts on behalf of dairies, the government and regional health officials, sales of fortified milk account for 20 per cent of the country's total milk consumption.

This includes milk with added calcium, milk with Omega 3, milk designed for infants and lactose-free milk.

Second, busy, stretched lifestyles are driving convenient, time-saving solutions.

In the US, parents are starting to buy large quantities of ambient milk designed specifically for babies and toddlers.

They can store this milk at home, avoiding frequent trips to the supermarket.

Third, there is a desire to enjoy life within the current economic downturn with small treats and new consumption occasions that favour ambient products.

This is driving consumption of flavoured milk among adults and children in developed markets.

In Germany children drink flavoured milk at school, while in the US flavoured milk is a popular accompaniment to adult breakfasts and childrens' lunches.

Finally, there is a growing trend toward economisation, with consumers deploying money-saving strategies.

In some countries ambient products are sold at more economical price points than chilled products and in others they are offered as part of retailer promotions where consumers can buy large quantities at a favourable price.

While white milk represents the largest segment of the LDP category across developed markets - with 76 per cent market share - producers are also looking to flavoured milk and soy milk as potential opportunities for growth.

Over the past 12 months the UK, Spain, Canada and Australia have all seen growth in consumption of flavoured milk, the second-largest LDP category after white milk in developed markets - although these started from low consumption volumes.

Soy milk, which is often positioned as a healthy natural alternative to cow's milk, is expected to grow in developed markets by a CAGR of 1.0 per cent from 2006 to 2009.

From 2009 to 2012, flavoured milk and soy milk are expected to continue to grow globally at CAGRs of 3.3 and 3.1 per cent respectively.

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