GLOBAL – The dairy industry across the World is set to undergo a major transformation by 2030 as dairy alternative products are forecasted to become mainstream in many markets, reducing the consumption of milk derived from cows.
A new research by the World’s leading food processing and packaging solutions company Tetra Pak and Lund University, have revealed that the demand for dairy alternatives could increase by 25% to 65% by 2030.
“The food & beverage sector will undergo an enormous transformation over the next decade, with the dairy industry feeling this most acutely.“Frederik Wellendorph – Vice President Business Unit Liquid Food, Tetra Pak
During the forecasted period the dairy alternative segment has a potential of occupying up to 50% of the dairy market with the demand for cow-based dairy foreseen to reduce by between 35-75%, reveals the report.
“The food & beverage sector will undergo an enormous transformation over the next decade, with the dairy industry feeling this most acutely,” Frederik Wellendorph, Vice President Business Unit Liquid Food, Tetra Pak said.
“Clearly, many challenges lie ahead – but there are plenty of opportunities for manufacturers too. The key to success in the new landscape will be in embracing flexibility and proactively responding to the wave of disruptive changes.”
Anticipating the degree of transformation, Tetra Pak has already started collaborating with start-ups and academia to accelerate understanding of the performance of different proteins under different processing conditions.
Through this, the company will create solutions that enable customers to take advantage of the changes that lie ahead.
The recent study, Global trends affecting dairy strategies, follows an 18-month research project by Lund University School of Economics and Management (LUSEM) supported by Tetra Pak, to examine a shifting dairy landscape and forecast what the dairy industry will look like in 2030.
The research forms part of Lund University and Tetra Pak’s ongoing strategic collaboration where by in July 2020, the two parties signed a five-year strategic partnership agreement, expanding on their rich history of collaboration on packaging logistics, food technology and packaging materials.
“The global dairy industry, is at the very heart of the global food transformation, and the contours of this transition are already starting to take shape,” said Dr. Christian Koch of Lund University School of Economics and Management.
“This Lund University project, in collaboration with Tetra Pak, used established methodologies to develop scenarios for the dairy industry in 2030 and related food processing and distribution sectors. The scenarios are as different from each other as possible, within the limits of plausibility and credibility. Thus all should be considered as future plausible outcomes.”
Factors impacting the dairy alternative segment
Analysing six key global markets, including the UK, US, China, India, Nigeria and Brazil, the study outlines four scenarios i.e. ‘Green Dairy’, ‘New Fusion’, ‘Brave New Food’ and ‘Dairy Evolution’.
Each scenario demonstrates the varying interplay of socioeconomic forces and technological transformation, and with very different outcomes.
“The scenarios are as different from each other as possible, within the limits of plausibility and credibility. Thus all should be considered as future plausible outcomes.”Dr. Christian Koch – Lund University School of Economics and Management
The first scenario, ‘Green Dairy’ is marked by strong socio-environmental forces, such as consumer demands and policy restrictions but little technological transition, that drive the dairy industry to invest heavily to reduce carbon footprint.
‘New Fusion’ dominated by innovative technologies and processes, but weak socio-environmental forces, would significantly impact the industry.
While ‘Brave New Food’ is the scenario combining both, where strong socio-environmental forces and high innovative technologies would lead to a complete transformation.
‘Dairy Evolution’ is the scenario characterised by no big surprises where the dairy industry would continue to follow current trends with smaller disruptions.
The project team from the LUSEM SITE research centre consisted of professors Thomas Kalling, Matts Kärreman, Magnus Johansson and Christian Koch.
Tetra Pak reveals that dairy products currently hold 16.3% share of all beverage consumption and together with juices, nectars and still drinks (JNSD) constitutes 25% share globally. However, the company notes that by 2022 the dairy growth is forecast to outpace that of JNSD.
Plant-based dairy market to account for US$32 billion by 2030
The report by Tetra Pak comes after a recent report published by Fact.MR, showed that the global plant-based dairy market will expand at a value CAGR of 11.5%, and account for US$32 billion by 2030.
In terms of region, North America is expected to lead the market share followed by Europe; East Asia; South Asia, Asean & Oceania, Latin Ameriac and MEA region, with the recent Covid-19 pandemic hastening the adoption and growth in demand of dairy alternative products across the World.
“In the long run, the outbreak of COVID-19 is expected to trigger market growth, as it has increased awareness about the various health benefits of plant-based dairy products,” says a Fact.MR analyst.
In addition, initiatives taken by governments and other organizations to promote the consumption of plant-based protein products have also contributed significantly to market growth, notes the report.
For instance, the Government of Canada has launched the Protein Industries Canada (PIC) Supercluster in order to grow the plant-based food & beverage business in the country. Under this project, the Canadian government invests in various plant-based businesses.
Apart from this, global animal rights organizations such as People for the Ethical Treatment of Animals (PETA) promote the consumption of plant-based food & beverages by conducting various awareness events and campaigns.
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