Development within Global Dairy Consumption: the Growing Consumer Market Pushes Volume and Value Increases
The global dairy market is both large and extremely dynamic. World consumption of dairy products is currently estimated at 539 million tonnes and is forecast to grow at an annual rate of 1-2% to 2005. On a geographic level, however, consumption levels and pace of development are far from uniform.
Whilst volume consumption is heavily concentrated in the US and EU (which together account for 28% of total dairy consumption), market growth is absorbed primarily in Asia and Latin America.
Rising dairy consumption is attributable to three key factors:
- World population increasing by 1.5% per annum;
- Economic growth in developing nations, pushing up disposable income levels;
- Urbanisation, promoting a more advanced dairy processing industry.
As global economies pass through various stages of economic development, the emphasis moves from centralised and industrially-based to service-driven economies. This is paralleled by changing consumer behaviour, fuelled by rising affluence. At the earliest stages of economic development, food consumption is survival-orientated. Sustenance from basic, traditional style commodity products is a prime requirement, and meals will be structured and family based. A gradual increase in income levels will lead to the development of a mass market and an overall increase in the purchasing of branded goods. Snacking will begin at level two of economic development. By level three, traditional meal structure will be eroded in favour of grazing on the move and real opportunity for dairy snack products emerges. In highly developed markets, consumers seek a balance between health and indulgence. Tastes are sophisticated and increasingly international and products are expected to be customised and convenient.
Socio-economic evolution and food consumption trends
Across the world, dairy market dynamics vary significantly by country, both in terms of levels of consumption and product preferences. The type of dairy products consumed by country is determined not only by culture and tradition, but by the development of chilled distribution systems (which in less developed countries are typically confined to urban areas). Fresh products are generally available only in more developed markets - elsewhere the preference is for powdered, canned, UHT and fermented milk and dairy products.
Consumption of dairy products in key global markets
Per capita consumption of dairy products (kg)
|Chile, Brazil, Colombia, Venezuela||
* Russia is a special case. Recent economic turbulence has had a dramatic negative impact on dairy consumption. The imported dairy product sector was hardest hit, with a decline in volume imports from 5.3 million metric tonnes in 1997 to 4.5 million by the end of 1998. Consumption of imported yoghurt over this period fell by over 50%.
Focus on cheese
The world cheese market is expected to experience continued growth over the next five years, at between 2-3% per annum. Again, consumption levels are influenced by national tradition. In parts of the Asia Pacific region, where cheese is not a traditional food product, consumption is inevitably very low. In recent years, however, the cheese sector (primarily mozzarella and sliced processed cheese) has begun to emerge in the East, promoted by the penetration of Western food tastes and dairy companies. Japan, for example, has seen a rise of 13.1% in natural cheese consumption between 1993 and 1997.
Opportunities for future development
The dairy industry is set for continued and significant development during the next five years. Two parallel developments will be evident at a global level:
- Volume growth in the less developed markets of Asia, Eastern Europe and Latin America, alongside a shift to higher added value products (although the extent of this will clearly be linked to economic development);
- Value growth in mature markets (US and EU), characterised by diversification (satisfying changing consumer demands for greater choice, convenience, snacking, health and indulgence). Functional dairy products in particular are set for rapid growth.
The following graphic depicts the key global markets in 2005, positioned according to level of economic development
Global dairy market development to 2005
Summary of key developments by geographic market
Level of development
For information on a dairy report by Promar Click Here.
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