OPINIO
Trade4go
Dec 23rd, 2024
Original content
Host: Bojan Mijatovic - Global Market Analyst (Serbia)
Presenter: Victor Langat - Global Market Analyst (Kenya)
Speakers: Avelyn (Sun Jae) Lee - Associate - HQ
Joachim Gartner - Account Executive Team Lead EMEA (United Kingdom)
Agenda:
In its December webinar, Tridge experts covered the latest trends in the dairy and margarine sector. The global milk market is projected to reach a gross production value of USD 0.48 trillion in 2024, with an expected compound annual growth rate (CAGR) of 2.76%, bringing the market to USD 0.55 trillion by 2029. Milk global imports are estimated at USD 6.8 billion in 2024 and are anticipated to grow at an annual rate of 2.90%, reaching USD 7.8 billion by 2029. Similarly, global milk exports, valued at USD 6.1 billion in 2024, are expected to grow faster annually at 3.66%, reaching USD 7.3 billion by 2029. Meanwhile, the margarine market is estimated to be worth USD 31.5 billion in 2024, with a robust annual growth rate of 6.7% projected through 2029. Key production regions for margarine include Europe, North America, and Asia, highlighting its global significance.
Figure 1. Global Milk Market Overview
Source: Tridge
The dairy industry is undergoing a significant transformation, driven by health-conscious consumers, sustainability demands, and evolving market dynamics. Manufacturers are innovating to meet dietary trends, such as high-protein and reduced-fat products like Megmilk’s Daily Bone-Strong Yogurt and Seoul Milk’s High Calcium Cheese. They are also addressing environmental concerns through sustainable practices, exemplified by palm oil-free margarine in France. The rise of dairy alternatives, like Violife’s vegan cheese, reflects the growing interest in plant-based options due to health, environmental, and dietary preferences.
However, changing weather patterns, disease outbreaks, strict regulations, and rising raw milk prices increase production costs and operational complexities. In response, producers focus on premium, organic, and hybrid products, expand exports to high-demand regions like China and Southeast Asia, and leverage e-commerce. Sustainability initiatives, including renewable energy adoption and green financing, are also gaining traction to ensure long-term viability.
Figure 2. Popular Healthy, Sustainable, and Plant-Based Dairy Products in Asia
(L-R top: Daily Bone-Strong High Protein Yogurt MBP® and Seoul Milk Sliced Cheese Reduced Fat High Calcium Cheese 270g. (L-R bottom)Tartine & Soft Cooking Without Palm Oil and Violife Original Dairy Free Creamy Spreadable Cheese Alternative 200g
Source: Tridge
With key players like Lactalis (USD 27.9 billion annual revenue), Fonterra (USD 14 billion), and Arla (USD 13.7 billion), the global dairy industry is witnessing robust innovation and market expansion. Lactalis Canada introduced OLYMPIC Organic Kids’ drinkable yogurt in Aug-24, featuring 50% less sugar and grass-fed organic milk. Fonterra expanded its award-winning Kāpiti cheese varieties, including Pakari Aged Cheddar and Kikorangi Blue, to Aldi stores in Australia. Arla launched Lurpak plant-based spreadable butter in the United Kingdom (UK), offering dairy-like quality for cooking and baking. Emerging producers like Armored Fresh are disrupting the market with zero-dairy cheeses, debuting its restaurant division in Brooklyn with Armored Grilled Cheese in Oct-24. Japan’s Happy Hill Farm also launched mozzarella and Sakeru cheese made from 100% raw milk. These developments highlight opportunities for value addition, sustainability, and product diversification, urging stakeholders to adapt to evolving consumer demands.
Figure 3. Top Global Dairy Companies by Annual Revenue in 2023
Source: Tridge, Statista
Avelyn (Sun Jae) Lee and Joachim Gartner examined the factors driving global dairy market growth. While global cow’s milk consumption has been steadily declining, demand for butter and cheese is soaring. In the United States (US), the per capita milk consumption dropped for the 14th consecutive year in 2023. However, Americans consume 6.5 pounds of butter and 42.3 pounds of cheese per person annually. Key drivers include shifting attitudes toward butter, with new dietary guidelines endorsing moderate saturated fat intake. Social media trends, like charcuterie and butter boards, have further boosted butter's popularity.
In South Korea, the pandemic sparked a surge in home baking and a rise in premium butter imports, further fueling demand. Inflation and rising milk prices have also contributed to the dairy market's growth, particularly in South Korea. Inflation and increasing prices of whole milk prices have also contributed to the increasing demand and growth of dairy markets, especially in South Korea.
Gartner added that growing populations, urbanization, and increasing incomes in emerging markets like Asia and Africa are key drivers as urban consumers adopt more dairy-rich diets. Health and wellness trends are also boosting demand for high-protein, fortified, and lactose-free products, with Greek yogurt and plant-based alternatives gaining traction in France and the UK. Western influence is expanding the popularity of products like cheese and ice cream globally, while technological advancements, improved supply chains, and e-commerce platforms like Carrefour and Milk & More are enhancing accessibility.
In the second panel discussion, Gartner addressed how inflation is reshaping dairy purchasing habits. He explained that consumers are becoming more price-sensitive, opting for cheaper store brands, buying in bulk, or cutting back on consumption of standard dairy products, while premium options are seeing slower growth.
In France, private-label milk and yogurt sales have risen in supermarkets like Leclerc and Intermarché, while in the UK, budget dairy lines at Tesco and Aldi are seeing increased demand. However, while demand for essential dairy remains strong in emerging markets, higher prices are slowing growth. Higher-income consumers purchase items like organic milk and artisanal cheese for premium products, but others are "downtrading" to mid-tier or standard options. However, health-conscious consumers remain willing to pay more for products with added benefits, such as protein-enriched or lactose-free options. In France, cheese products with Appellation d'Origine Protégée (AOP) or Protected Designation of Origin (PDO) labels have seen slight declines, but organic milk demand remains steady. In the UK, plant-based milk and protein-enriched yogurts continue to grow.
Lee noted that in South Korea, inflation weakened the competitiveness of domestic dairy due to a price-setting system that raised raw milk prices by KRW 88 per liter (L) in 2023. This led to an 18.9% YoY increase in sterilized milk imports, which are cheaper and have a longer shelf life. Meanwhile, the "small luxury" trend boosted demand for premium imported butter, making South Korea the second-largest market for French butter exports in 2022, valued at USD 59.4 million. Despite inflation, the demand for high-quality dairy, particularly butter, remains strong.
Lee tackled the final issue of short-term trend expectations and maintaining competitiveness. Lee highlighted several short-term trends in the dairy industry, including increased price sensitivity as inflation continues to impact consumer spending. This is expected to drive demand for private-label and standard dairy products, while premium options may face some downtrading. Health-conscious consumers will maintain interest in high-protein, lactose-free, and plant-based alternatives, as this trend remains strong even during economic uncertainty. Sustainability and transparency are also becoming more important, with consumers favoring brands that demonstrate ethical sourcing and production practices.
In South Korea, companies like Seoul Milk and Maeil Dairy have recently launched products such as milk tailored for seniors, no-sugar-added milk, and plant-based alternatives. While South Korea’s milk alternative market is still in its early stages compared to the West, this presents an opportunity for international plant-based brands like Oatly and Silk to explore and expand into this emerging market.
Additionally, the shift to e-commerce and demand for convenience will persist as online grocery shopping becomes a lasting habit. To remain competitive, companies should focus on offering value through affordable options, promotions, and smaller pack sizes while innovating in health-focused and sustainable products. Strengthening e-commerce and logistics and tailoring strategies to local market preferences will also be key. Gartner added that rising raw milk prices push dairy companies to diversify their product lines to create new markets and provide value.
Click here to view the webinar recording, or click here to see the presentation slides.
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