Research company reports slowdown in dairy drinks market

Recent research by Canadean has reported that overall growth in the global dairy drinks market slowed to just 0.5% in 2008 (from 2.4% in 2007).

Deteriorating economic conditions coupled with the impact and after effects of the melamine scandal in Asia (which now accounts for 45.2% of entire global demand) have been the primary reasons for the slowdown in growth.

The Asian market witnessed the most marked deterioration – with total volumes expanding at 0.5% in 2008 compared with 5.1% in 2007.

The overall situation was also compounded however by the first absolute declines in demand in both North America and West Europe since 2004.

Africa, East Europe, Central and South America and the Middle East maintained positive growth in 2008 but even these regions are thought unlikely to escape the impact of the global downturn entirely in 2009.

White milk remains by far the most important category overall accounting for 79.4% of total global dairy drinks demand in 2008 or under 200 billion litres.

Growth in this category halved from 0.6% to 0.3% in 2008.

The fastest expanding sectors since 2002 have been ‘value-added’ products such as drinking yogurts, flavoured milk and fermented milk.

However these products also experienced the sharpest slowdown in 2008, with flavoured milk being particularly hard hit by the Asian melamine issue and falling back 2.9% over the year.

Local analysts expect it will take at least five years for this category to fully recover in the region.