GLOBAL – China and Africa are emerging as the next growth frontiers for dairy as rise in population and changing demographics in these regions show potential to drive opportunities across the dairy sphere, a recent analysis by Rabobank has revealed.
According to Rabobank states that over 35 percent of global population growth will occur in Africa, making it one of the most attractive regions for dairy companies.
The investment bank further notes that the region remains a net – and growing – dairy importer, largely importing from international players in the Global Dairy Top 20.
Rabobank data however notes that there will be “pockets of flourishing regional domestic production growth,” such as in East Africa, based on the availability of natural resources and social, economic and political stability.
China is expected to continue dominate the market as the as the world’s largest dairy importer, highlights Rabobank.
Rather than being dominated by the infant nutrition market of the past two decades, a new demographic shift is expected to drive growth in the “Active Silvers” (i.e. people aged 50 and over) market.
Meanwhile, the US and EU-27 markets are expected to be aging and affluent, attracting innovation and competition.
“By 2030, we anticipate that consumers will have the option to buy competitively priced plant-based and cell-cultured dairy alternatives, with non-GMO-sensitive consumers opting for the plant-based alternatives,” comments Mary Ledman, global dairy strategist for Rabobank.
Although dairy’s nutrient density is expected to keep the product a dietary staple in many households, Ledman notes that its imperative that the sector be part of a global carbon-reduction solution that resonates with climate-sensitive consumers.
Aware of consumer concerns, Global Dairy Top 20 have made sustainability commitments for 2030 and carbon-neutrality commitments for 2050, highlights Scheper.
According to NYU Stern Center for Sustainable Business, sustainability-marketed US milk sales grew more than 20 percent from 2013 to 2018, compared to negative growth for the category as a whole.
Meanwhile, sustainability-marketed natural cheese and yogurt sales grew over 30 and 20 percent, respectively, compared to nearly 10 percent growth for those categories broadly over the five-year period.
In the period between now and 2030, Rabobank anticipates investment activity to stay robust in the on-trend channels and categories, including specialty cheese and innovative dairy ingredients like human milk oligosaccharides.
The bank also anticipates dairy alternatives ranging from plants and fermentation to cell-based, and lifestyle nutrition to attract considerable investments.
In addition, acquisitions in adjacent sectors, such as logistics and inventory management, are likely while at the farm level, the rising cost of production will keep margins tight, limiting milk production growth in the Big-7 exporting regions to less than 1.2 percent.