The chief executive of packaging group Tetra Pak said today (3 December) that he believes the recession has permanently changed consumer behaviour and that value for money will remain critical for shoppers.
Tetra Pak, which generates two-thirds of its business from packaging sales to dairy processors, said the downturn had led consumers to change how they shopped in the last 12 months.
In its twice-yearly “dairy index”, Tetra Pak said that dairy consumption continued to grow in certain developing markets in 2009. However, it forecast that the consumption of liquid dairy products in developed markets is expected to dip by 1.2% this year.
Speaking to just-food, president and CEO Dennis Jönsson said that, where shoppers in developed markets continued to buy milk, they had traded down to cheaper products, boosting private-label lines, while they had also visited discounters to search for value.
Jönsson (pictured) claimed that consumers will not simply switch back to old habits when the recovery emerges.
“I don’t think there’s a way back. This is here to stay,” he said. “That’s something we have to accept and live with. The least we can do is to understand how we can leverage that situation in the best possible way.”
Jönsson declined to comment on the split between Tetra Pak’s sales its private-label and its branded customers.
While total liquid dairy consumption in developed markets is set to fall in 2009, the consumption of ambient milk has risen this year.
Moreover, according to Tetra Pak data, ambient milk consumption in the dairy sector’s more mature markets is forecast to continue to rise in the three years to 2012.
The Tetra Pak figures forecast a 0.7% compound annual growth rate for ambient milk consumption in developed markets between 2009 and 2012.
By contrast, chilled milk consumption is expected to fall by 0.6% on a CAGR basis – helping set a forecast of a fall in total liquid dairy product consumption of 0.2% in CAGR terms.
However, demand for ambient milk is dwarfed by chilled milk consumption in a number of Western markets, including the UK and the US.
Jönsson acknowledged it would be difficult to change how consumers in those markets viewed ambient milk, although he praised work done by Nestle in the US.
“It’s a tough one. It’s to do with the perception of ambient milk,” he said. “Some products have done well. If you look at what Nestle has done in the US with flavoured milk, they have taken a really innovative approach. They started on shelf with chilled products and have gone all the way with ambient products that are distributed in chilled cabinets. In some ways, that is the simplest way to go about it – you utilise the capability of chilled distribution.”
In the US, chilled milk is forecast to take up over 82% of dairy consumption in 2009; in the UK, the forecast is higher, at 89.5%, according to the Tetra Park data.