PMMI: Dairy industry posts largest increase in shipments and equipment purchases

By Mary Ellen Shoup contact

- Last updated on GMT

The snacking market presents a large opportunity for dairy companies looking to combat decreasing fluid milk sales. ©iStock/endopack
The snacking market presents a large opportunity for dairy companies looking to combat decreasing fluid milk sales. ©iStock/endopack

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Dairy showed the largest six-year shipment value increase compared to any other food and beverage segment, according to PMMI’s 2017 Trends in Food Processing Operations report.

Shipment value increased 42.8% over six years to $116.3bn, representing 15.9% of the total $731bn food and beverage industry.

While volume sales of milk have been slowly declining, the growth of cheese and yogurt products have helped the industry gain back some of those losses, PMMI found.

Simultaneously, manufacturers have been able to pass the rising price of milk used in those products on to the consumer.

“The consumption of fluid milk has been slowly decreasing, however the industry has been able to innovate, to recreate, and to find different niches successfully,”​ Jorge Izquierdo, vice president of global marketing at PMMI, told DairyReporter.

Snacking consumers revive dairy

The growth of other dairy categories is being driven by convenience and nutrition with products such as yogurt, dairy drinks, and cheese snacks performing particularly well, PMMI said.

“Ten years ago the yogurt market was quite small here in the US, but in the past five years innovation in that space has exploded,” ​Izquierdo said.

Marketing dairy snack towards kids is one area that has gained a lot of attention, Izqueirdo pointed out, as the snack market continues to move beyond carbohydrate-heavy snacks like chips and granola bars to more dairy products.

“Marketing towards kids is expanding beyond snack foods and cereals to more sophisticated foods containing legumes and dairy products as a dessert or snack,”​ the report stated.

Following this particular trend, Sargento recently launched its Sweet Balanced Breaks Snacks, which combines savory cheese flavors with other ingredients such as dark chocolate, dried fruit, and nuts.  

“Success is coming up with the next big snack for time-impaired consumers looking for healthier and flavorful options,”​ one process engineer of snack foods told PMMI in its report.

Manufacturers invest more in equipment

According to PMMI, 63% of companies in the food and beverage industry are actively exploring new processing technologies and the dairy industry also registered the largest increase of capital expenditure on processing equipment and a decline of 7.8% in leased machinery.

One particular processing technology that has gained traction among dairy processors and manufacturers is HPP (high pressure processing), Izquerido said.

He explained that HPP is a way to satisfy the consumer who wants high nutritional value, a long shelf life, without any preservatives or additives in a dairy product.

“HPP, a technology that’s been around for 20 years, but wasn’t necessarily accessible because it requires a significant investment by the manufacturer,” Izquerido said.

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2 comments

Global milk Health

Posted by Peter Bourke,

It's great to read that active investment is occurring in the milk industry ....as it will improve health and sustainability outcomes for all of us.
Continuing to run old plant and use antiquated processes can only end badly.

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Innovation is a key driver for the Dairy Industry

Posted by Bent Oestergaard,

Very interesting to notice the increasing investment in new processing technology and innovation of convenience and nutritional products. Also, good to see the increasing interest in disrupting technologies like HPP (high pressure processing).
The Dairy industry has a unique position with its high nutritional value milk based raw materials, and innovation of new processing technology and products is clearly a key driver for the Dairy Industry forward, to benefit from this unique position.

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