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Economic Crisis and Melamine Scandal Lead to Slowdown in Dairy Drinks Market

Posted on: Monday, 6 April 2009, 09:38 CDT

BASINGSTOKE, England, April 6 /PRNewswire/ -- Overall growth in the global dairy drinks market slowed to just 0.5% in 2008 (from 2.4% in 2007) according to recent research by beverage industry specialists, Canadean Limited.

Deteriorating economic conditions coupled with the impact and after effects of the melamine scandal in Asia (which now accounts for 45.2% of entire global demand) have been the primary reasons for the slowdown in growth.

The Asian market witnessed the most marked deterioration - with total volumes expanding at just 0.5% in 2008 compared with 5.1% in 2007. The overall situation was also compounded however by the first absolute declines in demand in both North America and West Europe since 2004. Africa, East Europe, Central & South America and the Middle East all maintained positive growth in 2008 but even these regions are thought unlikely to escape the impact of the global downturn entirely in 2009.

White Milk remains by far the most important category overall accounting for 79.4% of total global dairy drinks demand in 2008 or just under 200 billion litres. Growth in this category halved from 0.6% to 0.3% in 2008.

The fastest expanding sectors since 2002 have been 'value-added' products such as drinking yogurts, flavoured milk and fermented milk. However these products also experienced the sharpest slowdown in 2008, with flavoured milk being particularly hard hit by the Asian melamine issue and falling back 2.9% over the year. Local analysts expect it will take at least 5 years for this category to fully recover in the region.

In spite of these negative trends, some categories and subcategories have remained resilient; growth in soy-based drinks has been good for example as some consumers have switched or switched back to these products and there has also been a strengthening in demand for evaporated and condensed milk and some specific market niches, such as low fat milk, probiotic drinks, ESL milk, organic and fortified milks.

With volume growth rates still in decline the short term outlook for 2009 is expected to be marked by a further intensification of competition and an extension of new products, brands and packaging types aimed particularly at meeting the demands of a more frugal and cost-conscious consumer.

But, whilst this short-term outlook for looks fairly bleak, some of the fundamental drivers for longer term growth remain in place. These include growing world population and per capita consumption, rising long-term disposable income levels, a steady shift to packaged from unpackaged consumption (the latter still represents nearly one third of the entire world market) and greater consumer interest in more sophisticated value added, functional and healthier products.

Source: Canadean Global Dairy Drinks Service

This analysis is based on Canadean's Global Dairy Drinks Service, produced from research collated by Canadean's global network of country beverage specialists. This service provides comprehensive analysis of the dairy drinks market in each country and category, including historic data from 2002 and forecasts to 2013. For further information on this service please email sales@canadean.com.

Editor's Note:

Canadean is the leading supplier of information, market research and consulting services to the global beverage and beverage packaging industries.

With headquarters in the UK but with offices around the world, Canadean has built a reputation as the benchmark for global beverage market intelligence. Local operations are now based in Madrid, Buenos Aires, Mexico City, Hong Kong, Beijing, Shanghai and Sydney.

Issued by the Corporate Marketing Department of Canadean Ltd, the leading global beverage research company.

Canadean Ltd

Email: sales@canadean.com

Website: http://www.canadean.com

SOURCE Canadean Limited

Source: PR Newswire

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