GLOBAL ECONOMIC SLOWDOWN BEARS NO IMPACT ON MILK CONSUMPTION

Noor Soraya Mohd Jamal


KUALA LUMPUR, Jan 15 (Bernama) -- The global economic slowdown has not
affected the milk consumption for 2009, according to the packaging firm Tetra
Pak's internal research team.

The Tetra Pak Dairy Index, a biannual report by the company, estimated that
milk consumption would enjoy continued growth with the compound annual growth
rate (CAGR) of 2.2 percent from 2009 and the trend is expected to continue for
the next three years.

Company president and chief executive officer Dennis Jonsson said much of
this growth would be led by emerging markets such as India, China and West Asia.

Even in today’s economic climate, dairy producers in most of the world’s
emerging markets can count on population growth, rising incomes and the novelty
of liquid dairy products as a new addition to the people’s diet.

"Although the recession has affected many sectors, it has not affected milk
and liquid dairy consumption in the same way. Milk is a healthy, nutritious and
affordable food staple, which 44 percent of the world’s population drinks every
day.

"While we have seen some consumers ‘trade down’ to less expensive products
in the category, the market remains stable," he said during a recent telephone
interview here.

MILK CONSUMPTION IN MALAYSIA

Meanwhile, milk consumption in Malaysia is expected to grow at the CAGR of
three percent until 2012.

In Malaysia, the dairy industry represents almost 24 per cent of all
beverages sold and consumed by Malaysians. From 2005 to 2009, the CAGR of the
dairy market has been growing steadily at an estimated two percent.

"In line with global trends, here in Malaysia we have not really seen a dip
in milk consumption due to the economic recession. We believe it's because of
the fact that the drink is essential to our diet," said Tetra Pak (Malaysia) Sdn
Bhd's Marketing and Product Management Division marketing manager Noer
Wellington.

He said 2009 saw a 10 percent jump in deliveries of its family pack, the one
liter cartons, as more money-conscious consumers opted for the value pack.

Wellington said white and flavoured milk are still the key to Malaysian
market taking about 60 per cent of the total market and based on the dairy
outlook both categories are predicted to continue in their lead.

Other categories of dairy beverage are lactic acid products (such as yogurt
beverages), sweetened condensed milk, evaporated milk and growing up milk.

READY TO DRINK MILK

On the other hand, the ready-to-drink (RTD) ambient and RTD chilled milk
variants have been identified as products with significant growth opportunities.
Between 2005 and 2009 these variants have been experiencing a growth rate of
eight percent and is expected to increase to nine per cent between 2009 t0 2012.

This can be attributed to the fact that dairy producers have identified
opportunities to create new market segments and milk consumption occasions for
both the RTD ambient and chilled categories.

They are also seeking out avenues to convert the weekly periodic consumer to
that of daily.

Wellington said currently the majority of milk drinkers in Malaysia are the
young children and older generation. The core of consumers, aged between 25 and
40 years old are not avid milk consumers.

The global findings in the Tetra Pak Dairy Index reveal that the carton is
still the preferred form of package for RTD dairy by consumers.

Therefore, insight into its core consumer’s behavior reveals that RTD is
able to accommodate to the their lifestyles. In line with this, dairy producers
are vying to capture the ‘family milk’ market.

AMBIENT MILK

One of the key findings of the Dairy Index is that both developed and
developing markets worldwide will continue to see a rise in consumption of
ambient (long life) liquid dairy products.

In developed market, the focus of current issue of the Tetra Pak Dairy
Index, ambient milk consumption is expected to reach the CAGR of 0.7 percent
from 2009 to 2012.

Driving this growth in developed market are four main factors – a general
trend towards health and wellness; busy lifestyles, which is driving for
convenient, time-saving solutions; desire to enjoy life with small treats and
growing trend towards economisation.

While white milk represents the largest segment of milk category across
developed market with 76 per cent market share, producers are also looking to
flavoured milk and soymilk as potential opportunities for growth.

Dairy is a core business category for Tetra Pak Group, making up 66 per cent
of all products. In Malaysia, it is one of the top business category
contributors to the firm's carton packaging business in Malaysia.

As at October 2009, Tetra Pak Malaysia's dairy business category grew by
five per cent, its soya category by 11 per cent, the juice and nectar category
by 10 per cent and no growth seen in the still drinks (non-fizzy drinks)
category.

-- BERNAMA