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Rising Dairy Demand to Overtake Supply in Next Decade

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Tetra Pak, Denton, Texas, USA, this week released its 7th Dairy Index. The report highlights the opportunities and challenges posed by rising global dairy demand, which is set to overtake available supply during the next decade.
"The predicted surge in global demand offers a huge opportunity for dairy companies in developed markets like the U.S. to export powder and ambient liquid dairy products to growing economies," said Dennis Jönsson, president and CEO of Tetra Pak Group. "However, to ensure long-term success, these producers need to balance the 'quick wins' of export against the requirement to continue to grow their domestic markets."
 
Tetra Pak's Dairy Index reveals global demand for milk is set to surge by 36% in the next decade, largely due to population growth, rising prosperity, as well as urbanization in Africa, Asia, and Latin America. However, milk supply and demand is imbalanced across the world; rising demand in emerging dairy markets is unlikely to be fulfilled by locally produced raw milk, while developed dairy markets producing a milk surplus, such as the U.S., face the challenges of competing for the export and responding to falling domestic consumption.
 
Less than 50% of American adults now drink milk, driving 2013 U.S. milk sales to their lowest point since 1984. This decline in consumption presents additional export opportunities, with most growth expected to derive from growing markets such as Mexico and China. However, although there are significant opportunities to export, producers must not lose focus on the domestic market. Product diversification, innovation, and brand differentiation will be crucial in the face of changing consumer demographics, behaviors and lifestyles.
 
More information is available online.
 

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