Guest article

Milking the Latin American dairy market

By Sean Riley, Senior Director, Media and Industry Communications at PMMI

- Last updated on GMT

The Latin American dairy market is growing fast. PIc:©Getty Images/Tomasz Wyszolmirksi/PeterHermesFurian
The Latin American dairy market is growing fast. PIc:©Getty Images/Tomasz Wyszolmirksi/PeterHermesFurian
At $60bn, the Latin American market accounts for less than 15% of global dairy sales.[1] However, that is likely to change soon.

Latin America’s dairy market is one of the fastest growing in the world, driven mainly by cheese and yogurt. The economic downturn in several markets has taken a toll on dairy sales, but the continued popularity of reusable packaging, the continued urbanization of Latin American cities, and a growing market for dairy alternatives are pushing dairy forward.

While wider prosperity has helped shift demand from glass to rigid plastic and metal, demand for value-added packaging like reusable glass is still high. Refillable glass bottles have long made beverages, like milk, more affordable for consumers in Mexico and Latin America.

Riley_Sean
Sean Riley, senior director, media and industry communications, PMMI

Mexico remains the strongest market for beverages in refillable containers but has experienced a decline in refilling.

The decline in refillable containers reflects expansion in other areas of liquid dairy product packaging. Despite the recession in Brazil, economic breakdown in Venezuela and introduction of a carbon beverage tax in Mexico, the Latin American beverages packaging market returned to growth in 2015 and has been increasing since.

Increased urbanization

This continued market expansion is driven mainly by urbanization. As 80% of Latin Americans now live in urban areas, demand for smaller packs and to-go multipacks is on the rise.[2]

Rising incomes and the expansion of retail outlets with chilled aisles are pushing a switch from unpackaged milk and yogurt to packaged versions.

In Peru, for example, modernized convenience stores are the leading channel for dairy and soy food products.[3] This convenience drives demand for products like single-serve bottles of drinkable yogurt, one of the top dairy products in Latin America today.

Amcor (PACK EXPO Las Vegas booth #S-6256), for example, is investing in this market by making its extensive line of PET stock bottles available to Latin American dairy manufacturers.

rise of dairy alternatives

Another byproduct of the rise of modern grocery stores in Latin America is the expansion of the dairy alternatives market. Worth $1.33bn in 2016, this sector is estimated to be growing at a CAGR of 12.90%, to reach $2.44bn by 2021. Other factors contributing to this growth include innovative product launches, health concerns, changing lifestyles, ecommerce and the rising number of consumers allergic to dairy.[4]

Food and beverages based on dairy alternatives, prepared from dairy-free milk, soy or plant-based sources, are being consumed by lactose intolerant and health-conscious vegan consumers.

Brazil and Mexico exhibit particularly high demand for dairy alternative-based products, including milk, butter, ice-cream, cheese, soft drinks and energy drinks.[5]

Sustained consumption of value-added products – like convenience packs, low-calorie products, and dairy alternatives – for middle and upper-income consumers is expected to boost to the dairy packaging market in Latin America.

As the consumption of dairy products grows across the globe, so will the demand for efficient packaging systems and high-end production technologies.

Dairy manufacturers looking for sustainable and cost effective and which can provide convenient products with a longer shelf life can visit this fall’s PACK EXPO Las Vegas (Las Vegas Convention Center; Sept. 25-27, 2017), ​produced by PMMI, The Association for Packaging and Processing Technologies.

Sustainability, efficiency and product innovations are all hot-button issues that will be addressed with the latest packaging innovations. Industry-specific areas offer insights for the unique challenges facing dairy manufacturers, including the Beverage Cooler Lounge (Booth #7632) and the Reusable Packaging Pavilion, where dairy professionals can learn to reduce waste, cut costs and gain chain efficiency.

For more information and to register, visit https://www.packexpolasvegas.com/​.

[1] https://www.wiseguyreports.com/reports/1201251-dairy-in-latin-america

[2] http://www.euromonitor.com/steady-as-she-goes-beverage-packaging-defies-economic-headwinds-in-latin-america/report

[3] https://www.whatech.com/market-research/food-beverage/359556-dairy-soy-food-peru-s-market-forecast-to-2021-examined-in-new-market-research-report

[4] http://www.marketdataforecast.com/market-reports/latin-america-dairy-alternatives-market-2530/

[5] http://www.prnewswire.com/news-releases/dairy-alternatives-market---global-industry-insights-by-2024-tmr-620226943.html

Related topics: Markets, Emerging Markets

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