The flavour of milk

Growth engines for the dairy industry will include milk for many different tastes, according to Dennis Jönsson, president and CEO of Tetra Pak Group

The world of milk will become more flavourful in the future, according Tetra Pak’s latest dairy index. The rise of flavoured milks means it is now the second most widely consumed liquid dairy product (LDP) after white milk. Further, it is expected to see compound annual growth rates of at least double those of white milk and more than tripled those of carbonated soft drinks between 2012 and 2015, according to the packaging giant’s report.

Flavoured milks will move beyond the traditional children’s base to teenagers and adults, he predicts. “It is an excellent vehicle to drive liquid dairy consumption across the generations and at different consumption occasions,” Dennis Jönsson, president and CEO of Tetra Pak Group says. Rates of 15% are expected, moving it from 17 million litres to around 19.2 billion litres. Growth will particularly be seen in markets such as China, India, Indonesia and Brazil.

For example, demand for flavoured milk in China grew by 9.9% to 4.2 billion litres between 2009 and 2012, while Brazilian demand rose by 14.5 to 503 million litres during the same period. By contrast, the US market for flavoured milk increased by 1% over 2009-2012 and Germany saw a rise of 1.7% for the products. Indeed, China, South Asia and Southeast Asia drink more than half of the world’s flavoured milk.

Meanwhile, total liquid dairy consumption will see an increase from 280.3 million litres in 2012 to 301.3 billion litres by 2015. White milk accounts for around 70% of total LDP today.

Trending

This trend is being driven by several reasons, according to the report. Urbanisation, rising prosperity and on-the-go consumers have made ready-to-drink flavoured milks in small portion packs popular. Consumers are also interested in trying new food and drinks, and flavoured milks can meet any number of flavour profiles. Another reason is the nutritious and healthy profile of milk, along with the consumer desire for “indulgent” food and drinks.

Consumers are balancing quality and convenience with price and brand, Jönsson points out. Time saving features are important, particularly in developing countries, he notes. The proportion of consumers who eat on-the-go at least once a week has climbed from 21% in 2008 to 31% in 2012, and those who consume while walking or driving is up to 28% from 22% in 2008.

Cartons are an important part of the total package for flavoured milk drinks, accounting for 46% of flavoured milk packaging in 2012, rising from 41% in 2009. Ambient ready-to-drink products are also expected to reach 49% of global flavoured milk consumption by 2015. China is virtually an ambient milk market, whereas the US prefers its flavoured milk chilled. There is also a difference in package sizes, with the US having larger sizes as most milk drinking happens at home, while China largely features smaller portion packs.

New flavours are also emerging and taste is the key criteria for people drinking flavoured milk. “Consumers clearly have the desire to explore new things. That’s creating demand for new flavours and taste experiences among consumers,” says Sumit Khatter, director of category management at Tetra Pak. New flavours include marshmallow-flavoured milk in Switzerland. Flavoured milk launches are targeting adults more often, according to Mintel.