September 12, 2008

Global consumption of milk drinks is seen to have risen 13 percent from 214 billion litres in 2002 to 242 billion litres in 2007, according to a report from leading food and drink consultancy Zenith International.

This is mainly due to booming demand in China and consistent growth in Asia, Zenith Dairy Market Intelligence Manager Esther Renfrew said.

Consumption in Asia/Australasia has increased from 18.3 litres per person in 2002 to 22.9 litres in 2007. This increase meant the region now accounts for a third of world consumption. West Europe accounted for 16.5 percent and Latin America 13 percent.

Flavoured milk accounted for 4.7 percent of global milk drink volume in 2007, The US was the leading market for flavoured milk at 1.6 billion litres.

Milk in this category grew the fastest in the Middle East, where it has a share of 8.5 percent. While growth in this sector is just 2 percent over the past five years in West Europe, it is more than 10 percent in Latin America.

The Zenith report said factors influencing the global milk market include demand and supply instability creating uncertainty over prices, industry consolidation and barriers against free trade such as subsidies and quota.

These barriers meant that only 7 percent of world milk production is traded internationally.

Producers have increasingly focused on adding functionality to milk drinks. Although still a niche segment, volumes are growing fast.

Global milk drinks volumes are expected to rise by 19 percent in the five years to 2012, according to the report.