‘2.7 bn consumers in developing countries dairy industry’s next big opportunity’

May 7th, 2012 - 7:38 pm ICT by IANS  

New Delhi, May 7 (IANS) With 50 percent of them living in India and China, 2.7 billion low-income consumers in developing countries are the dairy industry’s next big growth opportunity due to an expected rise in prosperity, purchasing power and desire for packaged liquid dairy products (LDP), a new study says.

Consumption by low-income consumers in developing markets is forecast to increase from about 70 billion litres in 2011 to almost 80 billion litres in 2014, according to the Tetra Pak Dairy Index, which tracks worldwide facts, figures and trends in the global dairy industry.

Many of these consumers are expected to switch in coming years from drinking loose milk to packaged milk, it says.

“Low-income consumers represent one of the biggest growth opportunities for the dairy industry. The key to tomorrow’s success is reaching these consumers today,” said Tetra Pak President and CEO Dennis Jonsson.

“They make up almost 40 percent of the world’s population and live in economies driving our industry’s growth and they are growing more affluent,” he added

These low-income consumers live on $2-$8 a day and are virtually untapped by today’s dairy processors. Called Deeper in the Pyramid (DiP) consumers by Tetra Pak, they make up about 50 percent of developing countries’ population and consume 38 percent of LDP in developing countries.

Half of these DiP consumers live in India and China. The Tetra Pak research focused on six countries which account for more than 76 percent of LDP consumption by DiP consumers in developing countries: India, China, Indonesia, Brazil, Pakistan and Kenya.

“India offers a tremendous growth opportunity with over 220 million DiP consumer households,” said Tetra Pak South Asia Markets Managing Director Kandarp Singh.

“Contrary to what we have known for some time, this consumer segment is not only looking for affordability but has also become increasingly demanding on quality. We have been developing packaging solutions to address this segment and are very pleased to note that during the past years, our customers have launched several products across geographies in the dairy category at single coin-price points.

“The market response has been very positive and we continue to see double-digit growth rates in this segment,” Kandarp Singh added.

“Many DiP consumers are expected to grow in affluence, shifting from low to middle incomes by the end of the decade, boosting their purchasing power and the range of products they buy. The increase in spending power along with greater awareness of food safety and a need for convenient, ready-to-drink solutions is expected to increase the demand for packaged products,” a Tetra Pak statement said.

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