The value of the organic milk powder market will surpass $3 billion in the next ten years, as consumers continue to upgrade their dairy purchases because of food safety concerns and an increasing interest in nutrition. That is according to research from US-based Future Market Insights.
The market was worth almost $1.75 billion in 2016 and will record compound annual growth of 5.4% between now and 2027, Future Market Insights predicted.
According to its findings, global production of organic milk powder grew by between 2% and 2.5% in 2016 – ahead of 0.5% growth in organic liquid milk production. It predicted that around 112,000 metric tonnes of organic milk powder is likely to be consumed worldwide, with demand driven by positive consumer perceptions of milk powder’s role in providing essential nutrients for the body.
Milk powder is also popular as it affords consumers a longer shelf-life than fresh milk.
In May, FoodBev reported on Mintel’s prediction that the Chinese infant formula market would grow by 5.4% between 2016 and 2021, with organic options set to be one of the fastest-growing areas. Mintel said that volumes in the category were being driven by the country’s emerging middle class and the decision to phase out its controversial ‘one-child policy’.
It’s now estimated that 75% of Chinese mothers feed their babies organic infant formula, as the quality of products and the amount that parents will spend on their children’s nutrition continue to be key determinants in consumer purchasing behaviour.
Younger mothers in particular are interested in organic formula options, Mintel said, with 79% of mothers aged 25-34 using products of this kind.
China’s new middle class also ‘over-indexes’ on organic infant formula usage, with nearly nine in ten saying that they use these products – a significantly higher proportion than consumers overall (72%).
Analysis: Why China prefers imported infant formula
The opportunities for foreign dairy brands to perform well in Asia – particularly China – are well-documented. Ever since the country’s melamine crisis in 2008, consumer confidence in domestically produced dairy has been insurmountably low. Chinese companies like Yashili and Yili have sought to reduce their losses by investing in Australian and New Zealand-made infant formula, while European companies like Danone have capitalised on favourable perceptions of their brands.
Mintel’s latest research has shown that – as well as provenance – the nutritional quality of infant milk formula is an important motivator for Chinese consumers. The ‘organic’ label brings with it the perception that a product is better – and crucially, safer – for children. Nearly 60% of Chinese mothers think that products from Australia or New Zealand are better than those from other milk sources, while less than a fifth associate Chinese milk with a premium image.
The country remains a strong market for infant formula, driven by product innovation and a preference towards imported products. Food safety remains a key motivator for Chinese consumers, especially when it comes to their children.
Mintel research found that half of mothers choose organic infant formula because they are willing to pay more for their baby’s food. This is also the main driver for them to choose niche products, such as goat milk infant formula.
In organic milk powder, Future Market Insights said that whole milk continues to be popular: demand is expected to remain robust in the next ten years, with annual growth of more than 5% and an expected share of the overall milk powder market totalling over 50% by the end of 2017.
Outside Asia, value in Western Europe is expected to grow by almost 6% a year between now and 2027, owing to increased household consumption of organic milk products and favourable government policies for the organic agricultural sector.
North America currently holds the second spot and is anticipated to register compound annual growth of 5.3% during the same period.
In other organic dairy news, Arla rolled out a branded, bottled organic milk product in partnership with fast-food chain McDonald’s.
© FoodBev Media Ltd 2017