martin fejk for the dn

Global Trends &Future Opportunities in Dairy

Martin FejkGlobal Project Director Marketing Services

Public / March1, 2016

Where is the dairy category heading?

�Quality

�Safety�Safety

�Costs

Milk supply continues to exceed demand

41.250

61.250

51.250

‘000tons

Global Supply and Demand

SOURCE: Tetra Pak Research, IFCN

Predicted SupplyActual Supply

Predicted DemandActual Demand

1250

250

21.250

11.250

31.250

2012 2013 2014 2015 2016

CHINA18.3 ‘000 tons YTDEU-28

102.7 ‘000 tons YTD

+1.1% -20.3%

USA71.3 ‘000 tons YTD

+1.6% -21.7%

+5.3% -1.2%

Minimal increase in milk production with price decl ine

Source : CLAL data, YTD = Jan-Sept 2015, IFCN data

% change in milk production Jan-Sept 2015 vs LY % change in farm gate milk prices Jan-Sept 2015 vs LY

BRAZIL13.8 ‘000 tons YTD

-1.0% -14.4%

NEW ZELAND12.6 ‘000 tons YTD

+1.2% -35.9%

A relatively cheap energy continues

Initials/YYYY-MM-DDSecurity Level/ 5

People do like milk


�Available milk�Low milk prices�Low energy costs

Initials/YYYY-MM-DD

Security Level/ 7

�Low energy costs�People like milk

…But…

�Shortage of money

It is all about PEOPLE and MILK

�Taste good

Source: Healthy Marketing Team

�Feel good

�Think good

Food SafetyTrust, food safety, worry-less, transparency

Social ResponsibilityFair, human & honest, social responsibility, ethics, transparency, caring, self-respect

FunctionalMental health, growth, physical well-being, fortified, pro-biotics, vitamins, fibers, minerals

NaturalOrganic, natural sweeteners

Less is moreFat-free, gluten-free, lactose-free, less sugar

Health imageCosmetic health, self-improvement, show-off

Time is preciousLife-puzzles, 24/7 lifestyle, time efficiency

Availability anywhereOn-the-go, work, home, travel

RelaxSlow down pace of life, seeking balance

User-friendlySimplistic communication, hassle-free and user-friendly solutions

Business to consumerHuman to human, friendly, personality

Consumer to consumerRecommendation & reviews, reliable information, share food pics & stories online, social status

Consumer to businessDeal-seeking, easy access to information, status-seeking are drivers to interact with brands

Customised for mePersonilzed experiences, limited editions

NewCool-hunting, Flavours, experiment, cultural exchange,

ExperienceSensory, fun, joy, surprise

IndulgenceQuality, treat, pleasure

Green insideVegetarian alternatives, natural, no chemicals, clean eating

Green outsideDecrease pollution, nature as relaxation, environment, eco-friendly, green, local production, packaging materials

• Spain: Puleva• Value-Added White Milk• TBA 1000 S HeliCap 27

Key success factors:• The 1st mover in VAM• Consistent innovation: 8 sub-brands

designed to fulfill specific nutritional requirements � SKUs providing health

Pioneer in Value Added MilkAdapting to consumer needs

requirements � SKUs providing health and nutrition for all family

• Investment in brand communication • On pack targeted communication and

in-store activities

Results:� Leading brand in value added

products in Spain: 26% MS in VAM

First mover Premium Lactose Free WM

•Italy: Granarolo Accadi’ •Lactose Free AWM with added vitamins -semi-skimmed, skimmed and full fat•TEA 1000

Key success factors:• Low lactose AWM market is the only

one growing in LDP category• Switch from TPA1000 HC27 to TEA in

order to increase consumer

Public/ 11

Results:

order to increase consumer functionality and shelf catchiness

• Use of social media and website to educate consumers on lactose-intolerance

• First VAD in TEA in the market

� CAGR 2007-14: +8% (product range)

The Opportunity• Increasing number of consumers who

are allergic to milk (A1) protein - 1 in 5 people in the UK say they have issues with milk.

• Appealing alternative to regular milk for consumers with a “perceived discomfort with regular milk (who do

With a “natural” milk Addressing “milk” discomfort • UK & Australia: A2 milk

• WM - with A2 protein only• TBA 1000 Sq HC 23 – TBA 1000 S

discomfort with regular milk (who do not want to turn to DA)

Why an Innovator?

• Specially developed for consumers who are sensitive to milk protein A1 (≠ lactose intolerance)

• Certified farms where cows who produce A2milk are milked separately from the rest of the herd to produce “pure” milk

AustraliaUK

Ambient portion pack margins1st US organic milk provider

•US: Dean Foods Horizon Organic •Flavoured milk•TPA 250 Sq

Key success factors:• Organic dairy products is one of the

fastest-growing areas in the food industry.

• Pioneered nationwide sales of • Pioneered nationwide sales of organic milk 20 years ago

• Distribution: largest processor and distributor of dairy products in US

• Foodservice coverage (in Starbucks)

Results:� Leading producer of organic milk and dairy products

CAGR 2000-2014: +3.47%� Profitability margins of ambient portion packs� Dean Food is the market leader in FM

• UK - Happy Monkey• FM (milkshake)• TPA 200 Sq

Key success factors• The brand message and design

aesthetic appealing to children• The brand message and design

aesthetic maximizes appeal to children• Experimental benefits making a

Appeals to children and their parents alike

Milkshake for kids

• Experimental benefits making a healthy product viable among children

• Simplicity of flavour and choice• The brand also speaks positively to

parents , partnering with them to help achieve healthy nutritional goals

Source: 2013, Datamonitor analysis

10%

Smooth & rich taste, indulgent & romanticPremium Milkshake

• China: Yili “Wei Ke Zi”•Flavoured milk-banana, papaya, melon (and chocolate)• TPA 250sq. Straw, metalized film

Key success factors:• Premium positioning delivered through

unique packaging metalized TPA, exquisite designexquisite design

• Great rich milk taste fitting indulgent & leisure occasions

• Celebrity endorsement

Results:� Revitalized the brand by re-launching in TPA ,

in 2012 110x sales v.s. 2011� CAGR 2012-14: +131%

Asturiana Sport Life workout protein drinks

Heritage dairy gets into sport drinks segment

The Opportunity• Over 45% of the Spanish population

practice a sport or more; hence looking for 2 main benefits: prevent joint discomfort & recovery after sports

• Spain: Asturiana Sport Life• Protein enriched FM and value-added

WM• TEA 1000

joint discomfort & recovery after sports• Opportunity for a heritage Dairy player

to enter the Sport Drinks segment by leveraging Protein replenishing benefit

Why an Innovator?Formulation• WM: Lactose-free, low in fat, rich in

hyaluronic acid• FM: low in lactose and fat, rich in whey

protein

• China : Mengniu M-PLUS• Protein enriched milk• TPA 330 Dream cap

“Fitness” MilkFor everyday use

The Opportunity• Rise in health conscious, upwardly

mobile young Chinese adults• Increasing drive to look and stay

healthy as a symbol of power and

10%

healthy as a symbol of power and wealth

• Aid health and wellness goals of millenials

Why an Innovator?• Offers “integrated solution” : bio-

metrics app, exercise regimen and protein enhanced milk

It will be all about PEOPLE and MILK

�Taste good


�Feel good

�Think good

1.3%

5.4%

1.2%

2.0%

5.0%

1.7%

White Milk

Baby and Toddler Milk

Flavoured Milk

2015 Bio litres

216.8216.8216.8216.8

18.318.318.318.3

19.619.619.619.6

2012-2015

CAGR

2015-2018


1.3%

3.1%

6.8%

4.0%

1.5%

3.1%

0.2%

5.7%

3.1%

Soy Milk

Traditional Cultured Milk

LAD

Drinking Yoghurt

RNGS

17.817.817.817.8

10.710.710.710.7

10.210.210.210.2

9.49.49.49.4

8.08.08.08.0

----3.13.13.13.1

Source: Tetra Pak Compass, All Liquid Food, 2015

2.6%

4.1%

2.0%

3.0%

Liquid Cream

Non-Dairy Cream

2015 Bio litres

4.04.04.04.0

3.43.43.43.4


2012-2015CAGR

2015-2018

2.1%

3.7%

-1.1%

3.2%

5.0%

0.8%

Sweetened Condensed Milk

Buttermilk

Evaporated Milk

2.62.62.62.6

2.32.32.32.3

1.61.61.61.6

Source: Tetra Pak Compass, All Liquid Food, 2015


White Milk

Avg. price €/L

Growth vs. LY

Lactose-free WM

Fortified WM

-1%

-0.5*%

0.79

1.2

+16*%1.3


Organic WM

+16*%1.3

+6*%1.48

2.07Flavored M

Drinking Yogurt2.9

4.3

+1.5%

+1.3%

-1.2%

Liquid Cream

Source: Retail data, Euromonitor

�Quality�Safety�Costs

It will be all about PEOPLE and MILK


�Costs

�Taste good�Feel good�Think good

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