Blog: Emerging markets offer potential for dairy, soy makers

Katy Askew | 11 July 2016

Growing demand in emerging markets are set to drive 4.6% growth in the global dairy and soy food market by 2020, according to new research.

The global dairy and soy food market will rise from US$617.9bn in 2015 to $773.4bn by 2020, representing a compound annual growth rate of 4.6%, according to consumer insight firm Canadean.

The company’s latest report states that this cautious growth will be driven primarily by emerging and developing markets in Asia-Pacific, Middle East and Africa and East European regions, in contrast to West Europe and North America, whose “economic fragility” has resulted in risks of weaker market growth.

According to Kiran Akkineni, analyst for Canadean: “Changing consumer preferences and purchase patterns due to socio-economic and demographic changes have created new market dynamics. While the key markets of Western Europe and North America have witnessed stagnancy in liquid milk consumption paired with fast growth in processed and soy products, developing countries have recorded steep growth in demand for dairy products owing to their fairly low per capita consumption.”

Interestingly, the potential of emerging markets for dairy alternatives is also a long-term opportunity that is increasingly on the industry radar.

Detailing Danone's proposed acquisition of WhiteWave Foods last week, Danone CEO Emmanuel Faber said in the near term brands like Alpro are likely to receive a boost in the "big European markets" where Danone has a strong share of the dairy counter. However, he continued, the "much bigger opportunity for the long term is about emerging countries".

Faber said that there is strong demand growth for plant-based dairy alternatives in regions like Africa, where Danone is already working to capitalise on growing dairy sales.