4 global trends driving dairy demand

During her recent presentation at this year’s World Dairy Expo, which took place 4-7 October in Madison, Wisconsin, Megan Sheets highlighted four global trends that are currently driving dairy demand. The topic of Covid-19 popped up in the presentation.

“Everyone is starting to normalise after the pandemic,” said Sheets. Because of the pandemic there seems to be a trend of seeking comfort in food, she added, implying that many people found the extreme changes in day-to-day living difficult to adjust to, so finding that element of enjoyment has pushed demand. With 18% of US milk going to exports, the expectation is that this will grow to 20% in the coming years.

She described some trends that drive international dairy demand (Table 1).

 Taste and enjoyment

As a ripple effect following Covid-19, enjoyment, comfort and a strong pursuit of happiness have played an integral part in the trend of taste and enjoyment, which is driving dairy demand. Sheets stated that uncertainties and volatility play a major role in this, making taste and enjoyment a major driver of dairy demand.

“Consumers across the globe are finding moments of comfort in food,” she said and added that a growth trend can be seen in dairy fats like butter, cream, whole milk powder and anhydrous milk fat, which are all used in global markets for indulgent food and beverage applications.

OVERVIEW OF GLOBAL DAIRY MARKET PRICES

 Sustainability

The second trend driving demand is sustainability. “There is increased awareness and consciousness of environmental issues among consumers,” Sheets said.

She stated that sustainability is important not only to global consumers; it is one of the top purchase drivers for buyers in South-East Asia and Mexico. Purchase driver ­decisions are based on factors such as:

• Has strong track record and oversight for food quality/safety
• Delivers a consistent and reliable product
• Produces products that are good value for money
• Is a trusted partner
• Strives to deliver the highest standards of quality
• Is a leader in environmentally sustainable practices.

 Nutrition and wellness

In many sectors, nutrition and wellness are on a growth path, with healthy lifestyles becoming a global movement. Particularly with people leading increasingly busy lives and needing to lower stress, this trend has taken off. More and more people are moving towards looking at how to impact health from the inside (in addition to the physical side).

“Consumers are using nutrition to minimise stress, and there is a need for high-quality protein to serve consumer needs,” Sheets said.

Although dairy protein is high on the list, it isn’t the only protein in strong demand. Apart from plant and animal proteins, Sheets added that there is also a rising consumer interest in hybrid proteins – animal and plant formulations. With consumers understanding the microbiome more and more, “health is the number one purchase driver for yoghurt as consumers are looking more at gut health.”

This in turn also supports the demand for skim milk powder and milk protein concentrates. With this pursuit of healthy lifestyles taking the globe by storm, consumers are making a real investment in health and well-being. A big chunk of consumers globally intend to increase their spending on health in the coming 12 months.

Global consumer yoghurt purchase drivers:

• 55% – it’s healthy
• 48% – it’s tasty
• 24% – it’s convenient

OVERVIEW OF GLOBAL DAIRY MARKET PRICES

 Technology

As the fourth trend driver, technology hardly comes as a major surprise. “The use of technology has made dairy more accessible,” Sheets stated. She particularly highlighted the accelerated growth of digital and social commerce platforms, which have made dairy more accessible and convenient.

To mention a few examples, digital and commerce platform growth is seen in South Korea (e-commerce), South America (10-minute product delivery), Taiwan (kiosk ordering) and South Korea (live commerce). Livestream shopping is taking off, she said, with the Chinese market worth billions.

“We have been embracing technology to bring the dairy message direct to consumers across the globe,” she concluded.