About 2.7 billion low-income consumers in developing countries are the dairy industry’s next big growth opportunity, according to a Tetra Pak research.
The world’s leading food processing and packaging company said the opportunity arises from an expected rise in prosperity, purchasing power and desire for packaged liquid dairy products (LDP).
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 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 said.
“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 Jönsson. “They make up almost 40 per cent of the world’s population and live in economies driving our industry’s growth and they are growing more affluent.”
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 per cent of developing countries’ population and consume 38 per cent 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 per cent of LDP consumption by DiP consumers in developing countries: India, China, Indonesia, Brazil, Pakistan and Kenya.
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. As they gain an increase in spending power along with greater awareness of food safety and a need for convenient, ready-to- drink solutions are expected to increase the demand for packaged products, it said.