World Dairy Situationand

Global Marketing Trends

Véronique Pilet & Noëlle Paolo

CNIEL

Dairy in the World: Present and Future – 17th October 2016

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The World Dairy Situation bulletin

Special thanks to:• IDF Head Office• ZuivelNL• CNIEL• All IDF National Committees

and other national contributors

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The World Dairy Situation bulletin2015: a challenging year• Imbalance in supply and demand• 2% increase in milk production & dairy output• Relative stability in trade• Plunging dairy product and farmgate milk prices• Apparent per capita consumption 111.3 kg2016 and beyond• More modest supply growth• Upturn in dairy prices

4

Milk production

0 200 400 600 800 1.000

2005

2010

2013

2014

2015

Cow milk Buffalo milk Other milk

mln tonnes

Asia 29%

EU 2824%

North and Central America

18%

South America

10%

Other Europe

9%

Africa 5%

Oceania 5%

+ 2.0%

5

Cow’s milk delivery

< -1%

-1% to +1%

+1% to +3%

> +3%

Cow’s milk delivery growth in 2015

6

Dairy product outputButter/-oil Cheese

SMP WMP

9,2 9,6 10,0 10,2 10,6 10,8

6

7

8

9

10

11

2010 2011 2012 2013 2014 2015

mln tonnes

+4.6%+3.7% +2.1% +3.5%

+2.1%

18,1 18,3 18,7 18,8 19,4 19,9

16

17

18

19

20

21

2010 2011 2012 2013 2014 2015

mln tonnes

+1.2% +2.2% +0.7%+2.8%

+2.8%

3,7 3,9 4,1 4,24,8 4,8

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015

mln tonnes

+7.5%+5.0% +0.8%

+15.8% +0.0%

4,2 4,6 4,7 4,8 5,1 5,1

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015

mln tonnes

+9.2% +2.6% +1.8% +7.0% -1.4%

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Dairy industry

① Company CountryDairy turnover

2015 in bln USD

Growth

’14-’15

1 Lactalis FR 18.9 -14%

2 Nestlé CH 15.2 -17%

3 Fonterra NZ 14.3 -24%

4 DFA US 13.8 -23%

5 Danone FR 12.3 -17%

6 FrieslandCampina NL 12.2 -19%

7 Arla Foods DK 11.4 -19%

8 Yili CN 9.6 +8%

9 Saputo CA 8.6 -8%

10 Dean Foods US 8.1 -15%

11 Mengniu CN 7.8 -4%

12 Meiji Dairies JP 5.9 -5%

13 Müller DE 5.6 -

② Company CountryDairy turnover

2015 in bln USD

Growth

’14-’15

14 Sodiaal FR 5.5 -23%

15 DMK DE 5.1 -28%

16 Morinaga Milk Industry JP 5.0 -8%

17 Schreiber US 5.0 -

18 Savencia FR 4.9 -20%

19 Agropur CA 4.6 +9%

20 Megmilk Snow Brand JP 4.3 +0%

21 Glanbia Plc IE 4.1 -13%

22 Kraft Heinz US 4.1 -

23 Land O'Lakes US 4.0 -22%

24 General Mills US 3.7 -0%

25 GCMMF Amul IN 3.6 +6%

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Trade

0

5

10

15

20

25

2005 2007 2009 2011 2013 2015

EU 28 New Zealand USA

Australia Argentina

mln tonnes

0,0

0,6

1,2

1,8

2,4

3,0

Butter/-oil Cheese SMP WMP

2005 2010 2014 2015

mln tonnes

World dairy trade: 9% of global production

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Trade: cheese export flows

+10%

-20%

-39%

-3%

+24%

+60%

+49%+2%

+23%

+26%

+19%

+145%

+31%

-4%

Switzerland

China

Mexico

Saudi

Arabia

Japan

Philippines

South

Korea

Russian

Federation

+10%

-5%

USA

Australia

EU

New Zealand

Top 5 export flows per exporter exceeding 10 000 tonnes. 2014/15 growth in %

10

Trade: butter/oil export flows

USA

EU

New Zealand

Russian

Federation

China

Saudi

Arabia

-51%

+161% +29%

Turkey+73%

+16%

Philippines

Mexico

+130%

-21%

-2%

Egypt

Top 5 export flows per exporter exceeding 10 000 tonnes. 2014/15 growth in %

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Trade: SMP export flows

USA

EU

New Zealand

+24%

-26%

Indonesia

+1%

-18%

-9%

-38%

-4%

China

MexicoAlgeria

Egypt

VietnamMalaysia

Philippines

Russian

Federation

Thailand

-22%+77%

+7%

+6%

+25%

+152%

-6%

+26%

+13%

+22%

+35%

+28%

Singapore

+22%

Australia

Top 5 export flows per exporter exceeding 10 000 tonnes. 2014/15 growth in %

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Dairy pricesButter SMP

WMP CheddarFOB OceaniaFOB Western Europe

Source USDA. 13

Dairy consumption

Informal46%

Fresh milk and dairy products

17%

Butter15%

Cheese13%

WMP4%

SMP3%

Other2%

7.3 billion inhabitants

111.3 kg/capita/year

101,5

106,1108,4

110,6 111,3

6.400

6.600

6.800

7.000

7.200

7.400

90

95

100

105

110

115

2005 2010 2013 2014 2015

Per capita consumption World population

mln inhabitants

k

kg

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Global Marketing Trends

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Global Marketing Trends : 27 countries

16

Overall growth in the past 5 years

17

Past food market trends

12 countries14 countries15 countries 19 countries

18

Past dairy market trends

19

Stable

1% to 5% increase

5% to 10% increase

More than 10% increase

1% to 5% decline

5% to 10% decline

More than 10% decline

Legend

Dairy market drivers

1 2

Nearly 16 000 new dairy products

launchedworldwide in 2015

23 countries 17 countries

All dairy products excluding milk on same trend

NB : changes in volumeNumber of countries 21

Past liquid milk market trends

NB : changes in volume 22

Stable

1% to 5% increase

5% to 10% increase

More than 10% increase

1% to 5% decline

5% to 10% decline

More than 10% decline

Legend

Drivers BarriersLiquid MILK

10 countries

23

Cheese YoghurtPast trends

NB : changes in volume 24

Stable

1% to 5% increase

5% to 10% increase

More than 10% increase

1% to 5% decline

5% to 10% decline

More than 10% decline

Legend

Drivers

Yoghurt

6000

4500

Cheese

25

Return to gracefor fatty acids

Past butter market trends

NB: changes in volume 26

Stable

1% to 5% increase

5% to 10% increase

More than 10% increase

1% to 5% decline

5% to 10% decline

More than 10% decline

Legend

Anticiped trends for the coming 10 years

27

Dairy market : very positive future trends

19 countries

21 countries

PAST FUTURE

NB: changes in value 28

Stable

1% to 5% increase

5% to 10% increase

More than 10% increase

1% to 5% decline

5% to 10% decline

More than 10% decline

Legend

Some worrying signals :Anti-dairy movements

NO

YES

Legend

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Some worrying signals :Anti-dairy-farming debate

NO

YES

Legend

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Challenges for the future

31

InnovationCommunicationAccessibilityImageSustainabilityReputation

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