Total volume consumption of dairy products in 2008 was down by 0.5% in emerging markets, according to a recent study.
Over the last few weeks, groups such as New Zealand-based cooperative Fonterra and UK processor Milk Link have announced plans to boost their presence in certain Middle Eastern and Asian markets to court demand for cheese products.
However, in new findings by Proteus Insight, dairy consumption is down across 68 markets in the emerging regions of Asia, Latin America, Eastern Europe, Central Asia, Middle East and North Africa and the Caucasus.
“Eastern Europe was hit particularly hard, with consumption and spending dropping in Ukraine and Serbia following the economies needing assistance from the IMF,” stated the report.
At the end of 2008, the group said that reduced consumer spending and currency fluctuations led to declines in the value of the US dollar and the euro in these markets by 2.5% and 8.5% respectively.
However, despite the apparent difficulties felt in the market during 2008, the analyst suggested that the decisions of Fonterra and Milk Link to establish new deals with partners in emerging markets like China and Egypt could prove prudent. Of about 4.5 million tones of cheese consumed in the 68 sample markets, the report estimated that only 2% of the products were supplied as private label brands.
“These markets represent great potential for manufacture brand development as private label products have not penetrated to the extent found in Western Europe or North America,” stated the analyst. “[This occurred] even though key accounts such as Carrefour and Tesco have established themselves in many of these markets.”
