By Guy Montague-Jones

In its latest forecasting report, Tetra Pak has predicted that ambient milk will outperform the chilled sector in developed markets, and offer more opportunities for growth.

Dennis Jonsson, president and CEO of Tetra Pak, has described 2009 as “a tough year for all of us in the industry”, but said that milk, being a food stable, has not been affected as badly as other food industry segments.

Ambient Growth

In its biannual trend report, Tetra Pak estimates that consumption of liquid dairy products will fall 1.2 per- cent in developed markets this year, but that ambient milk will offer an enclave of growth in a challenging dairy market. For 2009, ambient consumption is projected to rise 0.6 percent, while chilled volumes are expected to fall 2 percent.

Ambient milk fits in with the current mix of seemingly contradictory trends. It suits the erratic and infrequent shopping habits of busy consumers, offers value for money, and is also well adapted to fortification.

Tetra Pak therefore expects ambient liquid dairy consumption in developed markets to reach a compound annual growth rate (CAGR) of 0.7 percent between 2009 and 2012.

Over the same period Tetra Pak expects total liquid dairy consumption to improve slightly, but continue to decline at a CAGR of 02 percent.

Despite the anticipated dip in the developed market, worldwide liquid dairy consumption is forecast to grow 1.3 percent from 259bn liters in 2008 to 263bn liters in 2009. This growth is coming from emerging markets, with China leading the way.

Although the volume of milk sold across the world has held up in the past year, Jonsson said the recession has prompted consumers to trade down to value products. Private label has been a major beneficiary of this downward shift, increasing its share of milk sales in developed markets. Ambient products have also improved their position on the back of the search for better value.

Flavored Milk

But other “on-trend” products like flavored milk have suffered. Volumes consumed between 2008 and 2009 fell 2.3 percent but Tetra Pak said there is still life in the category. Indeed, ambient flavored milks fared well over the last year with volumes up 1.7 percent.

Tetra Pak said the appeal of these products is there ability to turn what consumers see as a basic commodity into “a fun, dynamic and appealing beverage”. With opportunities to still attract new customers, Tetra Pak expects the overall flavored milk market to grow at a CAGR of 0.2 percent between 2009 and 2012, despite this year’s decrease.

Source: Dairy Reporter

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