Plant-Based Alternatives Impact European Dairy Demand
Source: The DairyNews
Recent findings from Rabobank and The Good Food Institute Europe indicate a notable decline in dairy sales across Europe, attributed to the rising popularity of plant-based alternatives.
The Good Food Institute's 2023 report highlights a substantial 21% surge in plant-based "cheese" sales between 2020 and 2022. In response to this evolving consumer preference, European cheesemakers are exploring new market strategies.
Further complicating the dairy industry's landscape, Kite's analysis later in the year revealed a challenging scenario marked by weak demand exacerbated by inflationary price increases. The dairy sector has been caught in the wave of inflation sweeping Europe since mid-2021, resulting in elevated prices for shoppers across various food categories.
As a strategic response to these market dynamics, experts predict that dairy producers will increasingly target the Chinese market for sales in the coming years, especially as cheese consumption plateaus in established markets. Rabobank's dairy analyst, Michelle Huang, estimates that China's annual cheese imports could range between 270,000 to 320,000 metric tons by 2030, positioning the country as a significant growth engine for the global cheese trade.
Despite a remarkable 16% annual growth in the Chinese cheese market from 2012-2022, per capita cheese consumption in China remains lower compared to Western counterparts and even neighboring Japan and South Korea. Factors driving this growth include increased disposable income among middle-class consumers, a growing appetite for Western-style quick-service-restaurant chains, and innovative uses of products like cream cheese and mozzarella.
While domestic Chinese cheese production is on the rise, it is unlikely to keep pace with local demand, creating opportunities for dairy-exporting powerhouses such as New Zealand, the U.S., the Netherlands, and Ireland. This potential market expansion becomes especially significant if India, the world's largest dairy producer, prioritizes most of its output for its vast population.
In the backdrop of these market shifts, European farmers have expressed discontent with what they perceive as increasingly stringent regulations, particularly those aimed at reducing emissions in sectors like dairy. These regulations, while environmentally driven, are viewed by farmers as adding complexity and costs to their operations.
Further complicating the dairy industry's landscape, Kite's analysis later in the year revealed a challenging scenario marked by weak demand exacerbated by inflationary price increases. The dairy sector has been caught in the wave of inflation sweeping Europe since mid-2021, resulting in elevated prices for shoppers across various food categories.
As a strategic response to these market dynamics, experts predict that dairy producers will increasingly target the Chinese market for sales in the coming years, especially as cheese consumption plateaus in established markets. Rabobank's dairy analyst, Michelle Huang, estimates that China's annual cheese imports could range between 270,000 to 320,000 metric tons by 2030, positioning the country as a significant growth engine for the global cheese trade.
Despite a remarkable 16% annual growth in the Chinese cheese market from 2012-2022, per capita cheese consumption in China remains lower compared to Western counterparts and even neighboring Japan and South Korea. Factors driving this growth include increased disposable income among middle-class consumers, a growing appetite for Western-style quick-service-restaurant chains, and innovative uses of products like cream cheese and mozzarella.
While domestic Chinese cheese production is on the rise, it is unlikely to keep pace with local demand, creating opportunities for dairy-exporting powerhouses such as New Zealand, the U.S., the Netherlands, and Ireland. This potential market expansion becomes especially significant if India, the world's largest dairy producer, prioritizes most of its output for its vast population.
In the backdrop of these market shifts, European farmers have expressed discontent with what they perceive as increasingly stringent regulations, particularly those aimed at reducing emissions in sectors like dairy. These regulations, while environmentally driven, are viewed by farmers as adding complexity and costs to their operations.
