In the coming years the global demand dairy products is expected to increase strongly. This offers large opportunities to the Dutch dairy industry and due to the competitive nature of our dairy industry, the chances are quite high that Dutch organizations will grab them. This is concluded in a market analysis by Roland Berger Strategy Consultants.
Increasing demand for dairy product
In assignment of the Dutch dairy association (NZO) the advisory firm mapped the industry’s economic force. From this study, it is evidenced that the global demand for dairy products will increase during the upcoming years with 2.2 % a year. Key drivers are the increasing global population and rising prosperity*. Also the trend points out to urbanization which provides more people with fridge access to store dairy products.
The growing demand offers the Netherlands large chances for both dairy and knowledge export. This further feeds analysts’ expectations that manufacturers in upcoming countries in Asia and Africa cannot meet the growing local need for milk powder and ingredients. They estimate the shortage (minus their own product) in milk powder in Asia and Africa by 2021 to be 3.500 kiloton, this comes down to 19x the current milk powder production in the Netherlands.
Abolishing the milk quota
The outlook for the Dutch dairy industry will become particularly good if the current milk quota will be abolished. This is expected to happen in the year 2015. Production in Europe is currently being controlled (artificially) – farmers in the European Union are not allowed to produce more than a certain amount of milk. If, in two years, this quota is abolished, there will be plenty of opportunity for growing, export and trading competition. “Being the largest exporter in Europe huge opportunities are present” according the consultants. Also it can undertake actions to compete within Europa and maximize its market share.
Good starting point
According to Roland Berger, the Dutch dairy industry has a perfect starting point to grab these international chances. “The location (climate, soil, strategic position in Europe and logistic infrastructure) provides an intrinsic head start” Roland Berger writes. An overview of the most important pillars of the strong rivalry position:
Also see the message: Roland Berger: Dutch dairy industry white engine of the economy.
* A growing prosperity creates a shift in eating habits from corns to (more expensive) animal products, like dairy.