Tetra Pak ups forecast for global dairy market

By Guy Montague-Jones

- Last updated on GMT

Related tags Tetra pak Milk

Tetra Pak has upped its growth forecast for the global dairy market and underlined the importance of demographics in the latest installment of its biannual market report.

Last December, Tetra Pak predicted that milk and other liquid dairy products (LDP) would grow at a Compound Annual Growth Rate (CAGR) of 2.2 per cent from 2009 to 2012.

New forecast

The packaging and processing specialist has now improved that forecast to 2.4 per cent CAGR in the latest edition of its Tetra Pak Dairy Index.

Explained the improved outlook, it said consumption of ambient white milk was higher than expected last year – up 1.3 per cent on the previous year.

This basic dairy product is one to watch over the coming years as big demographic and social changes are poised to drive up demand across the globe. Tetra Pak expects consumption of ambient LDP to grow at a CAGR of 5.4 per cent from 2009 to 2012.

Social trends

Urbanisation and the growth of the middle classes are two broad trends expected to boost dairy consumption over this period. In countries like India, Brazil and China, the swelling urban and middle class populations are driving up demand for dairy products.

And basic dairy products like ambient milk are not the only beneficiaries. Premium LDP is becoming more affordable so flavoured milk products are showing strong growth rates in countries like Brazil and Indonesia.

At the other end of the income scale, there is now big potential for growth that companies are exploiting with new types of products. In a press conference, Tetra Pak CEO Dennis Jonsson cited dairy formula products in Mexico and small packs of less than 125ml in Indonesia as examples of how dairy firms are reaching lower income groups in emerging markets.

Meanwhile, in developed markets, the challenge is not to reach out to entirely new consumers but to follow social changes to ensure that products are in line with the latest consumer trends. In particular, dairy processors have to adapt to an ageing population, and offer products such as milk fortified with calcium, vitamins and minerals that help older consumers reduce cholesterol and protect themselves from osteoporosis.

And it is not just processors that have to adapt to major social changes. Jonsson said Tetra Pak has to respond by providing processing and packaging products that fit in with major social and economic trends. As examples, he mentioned easier to open closures for elderly people and smaller packs for poorer consumers in developing markets.

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