Milking growth in the dairy industry

Monday, 26 August, 2013



In spite of Fonterra’s recent woes, a very positive picture is emerging for the dairy industry, especially in Asia and the Pacific region.

Worldwide milk production is expected to increase from the current level of 126 billion litres to around 137 billion by 2015. Market research company Euromonitor sees volumes in the Asia-Pacific region growing from 31 billion litres today to 37 billion, while consumption in Europe and North America is set to stagnate at a high level.

In many of the 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%. In Germany, by comparison, it is at around 20%.

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

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% of the population of the developing countries and consumes 38% of the liquid milk products. And their thirst for milk is rising rapidly as their prosperity increases: the figure of 70 billion litres 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 types 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.

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 aromatised milk. Beverages based on lactic acid are set to rise fastest, with an annual average increase of 11.9%, followed by milk for infants and small children at 9.0% pa on average. Aromatised milk is in third place, with expansion rates predicted at an annual average of 4.8%.

The latest milk and milk product processing equipment will be on display at drinktec 2013, which takes place at the Messe München exhibition centre in Munich, from 16 to 20 September 2013. The exhibition is expected to attract over 1400 exhibitors from over 70 countries and approximately 60,000 visitors from more than 170 countries.

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