PMMI 2013 Dairy Industry market assessment

Tumbling US milk sales spur processing turn to non-dairy drinks: PMMI

By Ben BOUCKLEY contact

- Last updated on GMT

Lemonades are one product category that some US dairy processors are exploring to counteract falling liquid milk sales, according to the PMMI (Picture Credit: Lara 604/Flickr)
Lemonades are one product category that some US dairy processors are exploring to counteract falling liquid milk sales, according to the PMMI (Picture Credit: Lara 604/Flickr)

Related tags: Dairy processors, Milk

US dairy processors are countering declines in fluid milk consumption by processing non-dairy beverages including iced teas and coffees, almond or soy-based ‘milk’ drinks and even lemonades.

That’s according to the PMMI (The Association of Packaging and Processing Technologies) in its new Dairy Industry market assessment for 2013, which summarizes conversations with 50 dairy professionals.

Continuing trends since the last PMMI survey in 2009 include continuing industry consolidation, more ‘mega’ dairy farms with a shift to west coast regions, increased consumption of dairy products and use of more sustainable packaging materials.

The Top 20 North American dairy processors account for 76% of sales revenue in the region, and key challenges for them in 2013 include ensuring compliance for sanitation, product and worker safety.

Containing costs and increasing production without adding staff is another concern, as is compensating for the US decline in consumption of fluid milk, frozen and some cultured products.

Stiffer competition from energy drinks

With global dairy sales forecast to reach $494bn in 2015 – and the US accounting for around 25% - these processors are keen to counteract these declines by developing added-value products.

 “While the popularity of Greek yogurt has helped contribute to the rise in overall consumption of dairy products in recent years, one prominent product category, fluid milk, has faltered,”​ the PMMI said.

The association noted that consumer concerns center on perceptions of high fat and lactose content, while there is stiffer competition from protein and energy drinks.

“The decline in fluid milk consumption is prompting dairy manufacturers to develop alternative, non-dairy beverages to replace lost sales,”​ the PMMI added, noting iced teas and coffees, fruit juices, lemonades, almond milk and soy milk as products processors are now developing.

Within the dairy world itself, consumers are keen on innovative products, new flavors and improved packaging to satisfy their demand for healthier, on-the-go lifestyles, according the PMMI, while retailers want innovative, sustainable packaging that “pops off the shelf”

Packaging that ‘pops off the shelf’

48% of dairy processors questions by the PMMI are responding to consumer demand for healthier food choices with low fat, fat free, reduced sugar and sodium, lactose free or organic products; they are also using probiotic cultures or fortifying products with nutrients, calcium and protein.

GMO-free dairy demand is also rising, while fluid milk is increasingly being processed into cheese (43% of US milk takes this route) yogurt and milk powders.

While dairy processors say Greek yogurt is enjoying “explosive growth”​, they also cite growth (albeit slower) for cheese, new ice cream and milk flavors, milk by-products (whey, protein concentrates), powdered milk (given Asian demand) and almond ‘milk’.

30% of dairy processors interviewed by the PMMI are re-designing packaging, using sustainable materials to extend shelf life (exploring ESL/aspetic packaging) introducing stronger barrier protection, easy to open and close fitments, attention-grabbing shapes, single serve packaging and use of stand-up pouches.

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