About 2.7 billion low-income consumers in developing countries are the dairy industry’s next big growth opportunity, according to Tetra Pak research. Click here to view Tetra Pak's Dairy Index, which tracks facts and trends in the global dairy industry. The food processing and packaging company said the opportunity arises from an expected increase in prosperity, purchasing power and desire for packaged liquid dairy products (LDP).“Low-income consumers represent one of the biggest growth opportunities for the dairy industry. The key to tomorrow’s success is reaching these consumers today,” said Tetra Pak president and CEO Dennis Jönsson.
These low-income consumers live on $2-$8 a day and are virtually untapped by today’s dairy processors. Called Deeper in the Pyramid (DiP) consumers by Tetra Pak, they make up about 50 percent of developing countries’ population and consume 38 percent of LDP in developing countries.
The Tetra Pak research focused on six countries that account for more than 76 percent of LDP consumption by DiP consumers in developing countries: India, China, Indonesia, Brazil, Pakistan and Kenya.
Many DiP consumers are expected to grow in affluence, shifting from low to middle incomes by the end of the decade, boosting their purchasing power and the range of products they buy.
As they gain an increase in spending power along with greater awareness of food safety and a need for convenient, ready-to-drink solutions are expected to increase the demand for packaged products.
“Today’s low-income consumers are tomorrow’s middle class,” said Jönsson. "This is a golden opportunity for dairy processors to cultivate consumer loyalty among a new generation of dairy consumers in developing countries.”
Tetra Pak has identified three key challenges for dairy processors seeking to reach consumers in this growth market.
They need to make products which are affordable, available and attractive to consumers on limited incomes. That means dairy processors must produce healthy, safe and nutritious packaged dairy products without adding unsustainable costs.
They must also make them available in small traditional stores in remote rural areas or congested cities where DiP consumers shop.
“We must develop products differently, distribute them differently and sell them differently to extend the availability of good nutrition in developing countries,” said Jönsson. PD