May 27, 2015

27/05/2015: Milk has a bright future over the next ten years: Italy can benefit as long as it makes structural changes

This was the theme of a convention held at the Milan Trade Fair Centre (Fiera Milano) during Dairy Tech, a new exhibition of process and packaging technologies for the dairy industry.

The future of milk was under consideration on 21 May at the Milan Trade Fair Centre, which was hosting the conference 'Milk for the planet: 2015-2025', as part of Dairy Tech, a new exhibition of technology for the treatment and packaging of dairy products. The future looks bright for the dairy industry, which constitutes an important part of the Italian agri-foods sector.
Image: mycael
According to estimates from the Food and Agricultural Organization (FAO), the average annual growth of world dairy production over the next 10-15 years will be 3-3.5 percent. Between the end of 2015 and 2025, global production is set to rise from 780 million to more than one billion tons, but with large discrepancies between developed and emerging countries, the latter of which will continue to lag behind in the production both of milk and of derivatives. For example, the European Union, the USA, New Zealand and Australia already more than satisfy demand, whereas China, Africa, Eastern Europe and Central America do not, and will therefore be the drivers behind the rising global demand. China is a case in point.

According to data compiled by Girà, a European market research company, the value of Chinese imports of cheese is growing at a rate of 16 percent per year, and is set to maintain or even increase this rhythm. The largest rise in demand is expected to be for products with higher added value such as cheese, butter and dairy products for children. Girà estimates an average annual growth of 12 percent in the baby food segment.

Italy is well placed to take advantage of the expanding market, being home to 2000 companies processing and packaging milk and dairy products, with a combined turnover of €15 billion and 25,000 employees. Italy produces more than 1 million tons of cheese products, of which 484,000 qualify for the Protected Designation of Origin (PDO) label, and exports 340,000 tons worth €2.2 billion. Since 1990, export volumes have been on a constant upward curve: fresh cheeses including mozzarella +2700 percent; Grana Padano and Parmigiano Reggiano +500 percent; Provolone +220 percent; and Gorgonzola +170 percent.

At the Dairy Tech conference, however, it also became clear that these numbers do not add up to enough to keep up with the expanding market. Some 72 percent of Italian companies generate less than €10 million in sales; further, Italian SMEs contribute to just 17 percent of the total €15-billion turnover of the sector.  The key to export growth is to sell more milk cheaply to foreign countries that are increasingly appreciative of our cheeses, but if Italy is to grasp the promised opportunities of the future, it is going to have to make structural changes to the industry. This will entail new forms of collaboration among companies, new commercial structures, a strengthening of PDO products, the upgrading of production plants, process lines and packaging systems. As regards this last (processing and packaging), Italy is already a world leader (with a 13 percent share of global exports in 2013), and it is with the aim of taking advantage of this strength that the Dairy Tech event was set up.

Visit the Dairy Tech site HERE.

The Global Miller
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