Tetra Pak Forecasts 30 per cent Surge in Milk Demand by 2020

Rising tide of prosperity and urbanisation in Asia, Africa and Latin America to fuel growth of LDP demand, according to fourth Tetra Pak Dairy Index.

7/12/2011 --- New research from Tetra Pak forecasts a rise of around 30 per cent in global consumption of milk and other liquid dairy products (OLDP) from 2010 to 2020.

This consumption boom will be driven by economic growth, urbanisation and the rising purchasing power of Asia’s middle class, according to the fourth issue of the Tetra Pak Dairy Index, which tracks worldwide facts, figures and trends in the global dairy industry.

Demand for liquid dairy products (LDP) will rise in every region of the world between 2010 and 2020, with the exception of Western Europe, which has the world’s highest per capita consumption of milk.

The liquid dairy boom reflects a growing shift in economic power from West to East. An emerging middle class is set to fuel demand for healthy, packaged products in supermarkets and convenience stores from Shanghai to Mumbai.

Global demand for white milk and OLDP including flavoured milk, drinking yoghurt, sweetened condensed milk, lactic acid drinks and infant milk is expected to grow to around 350 billion litres by 2020, compared with some 270 billion litres in 2010.

“The emergence of a significant middle-class, urbanisation and the expansion of modern shopping habits by busy, health-conscious and well-informed consumers is raising the consumption of packaged milk in developing countries. The consumers of this decade are looking for greater convenience and uncompromising quality and safety,” said Tetra Pak President and CEO Dennis Jönsson.

Economic growth and demographic changes are driving demand for all types of LDP in both developed and developing countries. Among the trends the report details are:
•    China and India driving the dairy boom

Continuing population growth in India, the world's increasing popularity of milk and other liquid dairy products in China means that by the end of the decade, India and China are expected to account for more than a third of the world
•    Shift from “loose” to packaged milk

The rising economic power of India and other Asian nations is expected to spur a shift from loose to packaged white milk consumption in these areas. Last year, around 51 per cent of white milk consumed in developing countries was bought loose. Sales are forecast to reach a tipping point in 2014, with around 55 per cent of white milk sold in packages, and this is expected to climb towards 70 per cent by 2020.

•    Seeking value in mature markets
Value-added products promoting convenience, health and well-being may offer the best growth opportunities this decade for the mature markets of Western Europe and North America. Whilst LDP consumption per capita in these regions is expected to fall, they are set to remain the top two LDP consumers per capita in 2020.

•    Focus on efficiency and sustainability
Major brands and retailers around the world are making ever-stronger commitments to reduce waste and lower carbon impact, a trend that will continue. For example, the U.S. milk industry recently pledged to cut its carbon footprint by 25% by 2020.

Tetra Pak recently announced it will cap carbon emissions at 2010 levels by the end of 2020, which translates into a 40 per cent relative reduction in CO2 equivalent emissions.

Tetra Pak President and CEO Dennis Jönsson said: “Economic growth in emerging markets has lifted many millions out of poverty. They have more money, are better educated and have new aspirations. It’s clear that meeting the world’s growing thirst for milk will be both a challenge and an opportunity for dairy producers. I’m convinced the industry can realise these growth opportunities in a sustainable and innovative way, providing the healthy, nutritious and convenient products that people want.”