Any recent growth experienced within the US has been because of population growth. The report also notes more worrying concerns based on increased competition for “share-of-stomach” from alternative foods and beverages.
McKinsey & Company suggests dairy companies should remain encouraged by projections the global milk deficit will continue to grow to an equivalent of 119 million tonnes of milk, a 66m tonne increase from 2013 levels.
Not surprisingly, the report states manufacturers with top-notch consumer insights capabilities and best-in-class product development capabilities can win consumers over through innovative product portfolios.
Companies will also need to more deeply understand new consumption and supply trends as a means to create products for specific needs.
As an example, the report points to the profound demographic implications from the ageing population in Indonesia where those aged 50-plus will increase 84% between 2012 and 2030.
One encouraging insight is recognition that dairy industry innovation is still not at its optimum level.
“While many other packaged goods categories have started introducing less and less innovations year-over-year, dairy launches have grown by 8% per year since 2010.”
The report suggests there is, in the US at least, an over-reliance on cheese and yoghurt product developments, and rather than distinctly new products, the launches have been focused on line extensions and new packaging.
As a proportion of all launches, new products fell from 51% in 2010 to 23% in 2014, while “relaunches” increased from 18% to 32% over the same period.
“Limiting the number of new product launches may limit how much incremental growth dairy will have in the coming years,” the report warns.
