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Demographic Shifts Pose Strategic Challenges for the Dairy Industry

World 17.09.2024
Source: DairyNews.today
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As the global population approaches 10 billion by 2050, according to United Nations projections, dairy producers are grappling with a complex challenge: population growth doesn’t necessarily translate into increased demand for traditional dairy products. Instead, the dairy sector must navigate shifting demographic trends that vary significantly by region.
Demographic Shifts Pose Strategic Challenges for the Dairy Industry
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Cyrille Filott, global sector strategist for consumer food at Rabobank in the Netherlands, noted that most population growth will be concentrated in West and East Africa, regions that are not traditional dairy markets. In contrast, population growth in key dairy-consuming regions like China, Europe, and the Americas is either flat or declining. China, for example, is expected to see a 10% population decline in the next 25 years, with an increasingly aging population. Similarly, the birth rate in many developed markets, such as China, is below the replacement rate, signaling a shrinking demand for products like infant formula.

This demographic shift presents both challenges and opportunities. Companies like Danone are already responding by developing products targeted at older consumers, recognizing the growing market for specialized nutrition tailored to aging populations. Filott highlighted the need for the dairy industry to rethink its strategies, saying, “It’s not a case of can we feed the world, I think we can, but who do we feed and how?”

The industry’s ability to adapt to these evolving market dynamics will be crucial for long-term success. Rather than focusing solely on traditional dairy products, processors may need to innovate and diversify their offerings to meet the needs of new consumer segments. This demographic reality, while challenging, also presents opportunities for those who can pivot and develop solutions for the next generation of global consumers.

As part of ongoing efforts to understand market sentiment, industry leaders, including Wallace, are visiting seven countries over six weeks, supported by grants from Fonterra, Silver Fern Farms, Alliance, Beef + Lamb NZ, NZ Meat Industry Association, and Rabobank. Their insights will be critical as the dairy industry navigates this shifting landscape.

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