As a result, unprocessed, unpackaged milk represents nearly 94% of all liquid dairy products (LDP) consumed in Pakistan, and has played an important role as a tea creamer, yogurt and standalone refreshment.
Between 2006-09, consumption of LDP in Pakistan steadily increased in line with population growth, with a CAGR of 2.4% (according to Tetra Pak data). In 2009, LDP consumption reached 18.9bn litres, maintaining its position as the fourth largest LDP consumer after India, China and the US.
In the same period, packaged LDP grew at a CAGR of 8.4% compared with unpackaged products, which grew at a CAGR of 2.1%. Tetra Pak expects packaged LDP to continue growing, with a CAGR of 10.4% from 2009-12.
Pakistan mirrors demographic drivers around the world. More urban, educated and sophisticated consumers, an emerging middle class and a large group of younger consumers are transforming its dairy industry. As elsewhere, they demand new, safer, more convenient products.
During the past 11 years, Pakistan’s urban population has increased by three percentage points. By 2009, 35.5% were living in cities (59.9m people, 5m more than in 1998) according to Tetra Pak Pakistan. Thus, as people have moved further from the rural areas where most of the dairy farms are found, their access to good quality loose milk has been limited due to the lack of a cold supply chain. This has provided packaged milk companies with the opportunity to provide good quality, safe milk in an alternative form.
This group values safety, hygiene and convenience. As a result, from 1999 to 2009, packaged LDP products grew by a CAGR of 19%.
This has been partly due to dairy industry educational campaigns that have created awareness of the safety and nutritional benefits of packaged milk.
Many consumers also appreciate the fact that packaged milk doesn’t need to be boiled before use, as loose milk does. In addition, it can be stored for up to three months before opening, so they don’t need to source milk daily.
The growing middle class can afford safer, healthier products that cost at least 20% more than loose milk. The number of Pakistani households in the top three socio-economic groups (as defined by SEC A-C, a tool used to measure consumers’ prosperity) has grown by 1% annually in recent years, according to Tetra Pak Pakistan. These consumers, who now make up 42% of the population, are increasingly able to afford premium packaged products such as skimmed and RTD flavoured milk.
Currently, 30% of Pakistan’s population is under 9 years of age, and 53% is under 19. Producers are promoting RTD flavoured milk to younger consumers who most often choose chocolate, strawberry, mango and banana. Adults also like flavoured products. One of Pakistan’s most popular flavoured milk brands also offers traditional flavours such as saffron, pistachio and cardamom to appeal to adult tastes. Flavoured milk still represents just 2.4% of the RTD LDP market in Pakistan. However, it grew by a CAGR of 56.3% from 2006 to 2009 and is forecast to grow at 23.1% CAGR from 2009 to 2012, according to Tetra Pak.
While nearly 72.8% of RTD LDP in Pakistan are still sold as plain 3.5% long-life milk, dairy producers are increasingly segmenting the market and developing specialised products. With the exception of white milk and tea creamers, all other products are positioned as ‘premium’ and command higher prices.
Pakistan’s population is growing by 1.7% a year, and LDP consumption is expected to grow at a CAGR of 2.8% from 2009 to 2012. Milk has always played a central role in the Pakistani diet, but with demographic changes driving new preferences for packaged milk, the era of nothing but plain, white unpacked milk is rapidly changing.
In 2007, dairy producers in Pakistan realised that consumers were buying small packages (250ml) of plain white milk for use as creamer in the country’s most popular beverage, tea. Consumers preferred the richer taste of tea made with UHT milk, and smaller packages were more affordable. So producers began developing and marketing special tea creamer recipes in 200ml packages. In addition to improving the taste profile of tea, the new size also made tea creamer more affordable than plain white milk.
Today, tea creamers represent more than 25% of the LDP market that will achieve a CAGR of 28% from 2009 to 2012, according to Tetra Pak.
This article was first published in issue 3 of the Tetra Pak Dairy Index. Reproduced in Dairy Innovation and on FoodBev.com with kind permission.
© FoodBev Media Ltd 2020
World Dairy Innovation Awards – OPEN FOR EARLY BIRD ENTRIES!
The awards celebrate excellence and innovation across the global dairy industry.
Don’t miss out on having your innovations recognised on a global scale.
Early bird deadline 19 March – enter now!