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Demand for liquid dairy products (LDP) will surge by around 30% from 2010 to 2020, driven by economic growth, urbanization, and the rising purchasing power of Asia's middle class. A new study by food and beverage packaging company Tetra Pak forecasts that by 2014 packaged milk will outsell "loose" milk in the developing world for the first time, with global demand for all forms of LDP to grow from 270 billion liters in 2010 to around 350 billion liters by 2020.

PlasticsToday Staff

July 11, 2011

5 Min Read
Milk demand on the rise, can plastics play a bigger role?

Demand for liquid dairy products (LDP) will surge by around 30% from 2010 to 2020, driven by economic growth, urbanization, and the rising purchasing power of Asia's middle class. A new study by food and beverage packaging company Tetra Pak forecasts that by 2014 packaged milk will outsell "loose" milk in the developing world for the first time, with global demand for all forms of LDP to grow from 270 billion liters in 2010 to around 350 billion liters by 2020. Will Tetra Pak's Tetra Evero Aseptic paperboard "carton bottle" dominate the growing market, or can plastic continue to grab share?

Tetra Pak, which supplies aseptic paperboard cartons, defines LDP as including white milk and other liquid dairy products (OLDP), like flavored milk, drinking yoghurt, sweetened condensed milk, lactic acid drinks, and baby and toddler milk. The highest growth rate will be in OLDPs, with global consumption of those set to rise by close to 60%, topping 100 billion liters by 2020.

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Tetra Pak's Tetra Avero Aseptic carton bottle

On May 16, Tetra Pak launched the Tetra Evero Aseptic, calling the package the world's first aseptic carton bottle for milk, saying it combines the "easy handling and pouring of a bottle with the environmental and cost advantages of a carton." The carton is recyclable and made from FSC-certified renewable paperboard.

LDP demand will climb in every region of the world between 2010 and 2020, except for Western Europe, where demand is likely to remain flat. The study posits that the dairy boom will be most pronounced in Asia, in particular India and China, where increased wealth and the rapidly expanding middle class will spur a significant rise in consumption among millions of consumers.

By 2020, India and China will account for more than a third of the world's total LDP consumption, with the Asia-Pacific region alone continuing to consume more than the rest of the world combined. Asia-Pacific, Latin America, and Africa are all forecast to record double-digit growth in demand for LDP in 2010-2020.

Tetra Pak says demographics, economic growth, and sustainability will drive six milk "mega trends" that will shape the future of the dairy value chain. Demographic change will be characterized by a growing population increasingly living in cities. Economic growth, particularly in emerging markets, will spur development, enlarge the middle class, and speed up globalization. Sustainability will become a key issue as demand for resources puts pressure on the environment and increases the need for technological innovation.

Tetra Pak's mega trends include: increased demand for packaged food; greater diversification of consumer needs; changing dynamics in food manufacturing and retailing; more food safety awareness; rising competitive pressure; and acceleration in green solutions as a "must have" for businesses.

The global middle class, which is broadly defined by The World Bank as those earning from $10-$20 a day, is expected to nearly triple from 430 million in 2000 to 1.15 billion by 2030, helping drive dairy demand.

This is particularly true in Asia-Pacific, where Tetra Pak forecasts that LDP consumption will climb by almost 45% from slightly below 140 billion liters in 2010 to almost 200 billion liters by 2020, pushing the region's total global market share up by at least 5 percentage points to above 55%.

Africa will also see significant LDP consumption growth, rising by more than 50%, from around 15 billion liters in 2010 to almost 25 billion liters in 2020. Latin American consumption will increase by more than 25% rising above 30 billion liters, while North American consumption will reach approximately 40 billion liters by 2020, up from about 35 billion liters in 2010. Despite the fact that Western European consumption is predicted to slip slightly, it will remain the biggest LDP consumer per capita in 2020, followed by North America.

India's rising economic clout is expected to spur a huge change in how and what people consume, according to Tetra Pak, since the developing nation is already the world's biggest LDP consumer. Tetra Pak forecasts that consumers will switch "in droves" to packaged white milk from "loose".

In 2010, around 51% of white milk consumed in developing countries was bought "loose" and 49% in packages. By 2014 a majority, 55%, of white milk forecast to be sold in packages for the first time, with that figure to hit 70% by 2020. Tetra Pak notes that "loose" milk is typically sold in India, Pakistan, Sri Lanka, and Bangladesh, where milkmen transport unpasteurized milk in large metal cans from farms to the city, where it is poured from the can into a jug or bottle.

Despite a shift in India's largest cities - Bangalore, Calcutta, Delhi, Mumbai, Chennai and Hyderabad - to packaged milk, "loose" milk still accounts for more than 70% of white milk sales because it dominates in the countryside.

In China, LDP demand is expected to surge by more than 40% from 2009-2013, climbing from 25 billion to 35 billion liters. There will be a more than 60% rise in consumption of lactic acid drinks and more than a 50% increase in consumption of baby and toddler milk, according to Tetra Pak.

Can plastic beat out paperboard

Paper packaging will continue to lose market share to plastic packaging virtually across-the-board due to the better performance attributes of plastics, particularly in milk, according to a Freedonia Group study on paper vs. plastics packaging. That report said the best growth potential for paper and paperboard packaging was expected in carry-out and prepared foods, shipping sacks, and juice and fruit drinks, with the most rapid losses expected to come in egg cartons, milk cartons, and retail bags/sacks.

SABIC Europe, which calls itself a leading supplier of high density polyethylene (HDPE) supplier for milk packaging in the European dairy market, points out that HDPE is the only packaging material that can be used for all three milk types: pasteurized, ultra-high temperature (UHT), and sterilized. In spite of this, SABIC noted that European milk packaging is still dominated by cartons, with the market share of HDPE bottles at around 18% and growing. In the U.K. market, which is the largest for pasteurized milk, HDPE bottles command a 70% share, however.

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