Lena Ingvarsson Marketing Director Dairy Dairy
Dairy January to September 90 100 85 80 75 77 84 77 78 87 80 60 40 20 29 66 52 64 77 70 2010 2011 2012 2013 2014 0 2010 2011 2012 2013 2014 Volumes ('000 MT) Operating profit (SEK million) 1.00 0.80 0.60 0.79 0.68 0.82 0.89 0.40 0.20 0.38 0.00 2010 2011 2012 2013 2014 Operating profit per kilo (SEK) 2
Global Dairy market in scope Market size year 2013 MT 66,2 million Market size year 2013 USD 309 billion Market growth 2014-2016 CAGR 3,4% Applications: Cream/Toppings Ice cream Powdered milk Milk drinks Non-dairy milk alternatives Coffee whiteners Butter Cheese Condensed milk Source: Euromonitor 3
Dairy market by main applications - Forecasted growth vs. fat volume 2013 Fat volume 000 tonnes 5 000 4 500 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 Butter 2 600 Cream 1 300 Cheese 4 200 Ice cream 1 000 Cond milk 360 Coffee whiterners 240 Market growth 3.4% Milk drinks 300 0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 CAGR in % 2014-2016 The use of vegetable fat is limited and varies depending on application Source: Euromonitor 4
Dairy market by regions - Forecasted growth vs. fat volume 2013 Fat volume 000 tonnes 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 WE 3 000 EE 1 320 NA 2 500 Market growth 3.4% LA 1 390 AP 1 300 MEA 720 Source: Euromonitor 0 0 1 2 3 4 5 6 7 CAGR in % 2014-2016 The use of vegetable fat is limited and varies depending on application 5
Trends for key players within scope (2013 - retail value %) Key players Market share Growth trend Company A 6,5 Company B 5,4 Company C 3,3 Diverse market, the 20 biggest players make up < 1/3 of the market Company D 2,8 Company E 1,7 - Generally good growth, specifically for Asian players Company F 1,5 Company G 1,4 - Newcomers increasing market shares on milk drinks Company H 1,3 Company I 1,2 Company J 1,2 Source: Euromonitor 6
Trends in Dairy market - from a fat perspective Health and wellness Non-trans Non-hydro SAFA reduction Decreased cholesterol Omega 3 and Omega 3/6 Sustainability Responsible and sustainable sourcing Carbon footprint Back to nature Natural Organic Free from Clean label 7
Dairy market characteristics Key revenue drivers Population growth Growing middle class in developing countries Urbanisation Key profit drivers Health categories Natural Convenience Key pains Dairy Side Stream Affordable dairy products for a larger market Lack of milk in some markets General health concern 8
Number of Dairy product launches - with vegetable oils and fats Number of launches 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2009 2010 2011 2012 2013 Steady increase of numbers of product launches with vegetable oils and fats in dairy products Source: Mintel 9
Potential markets - Dairy Extension and Dairy Side Stream Management 400 300 200 Skim Milk Powder x1000 tonnes 100 0-100 -200-300 -400-500 Net importers Net exporters Source: IDF, 2013 10
Dairy Extension - An opportunity for Dairies Availability Dairy Extension manage: Possibility to have stable availability of raw material Affordability Add vegetable fat to create affordable food Volatility Vegetable fat reduces the volatility Sustainability Dairy Extension Affordable food Act responsibly by addressing Global Sustainability Initiative 11
Side Stream Management - creating new value for Dairies Turn side stream fractions into value Reduce waste, act responsibly Steady output of the side stream fractions Creating new valuable extension of the product range Possibility to create healthier product segment Improve profitability for the total business Sustainability and Cost efficiency Side Stream Management Recycle waste Act responsible Creating value Profitable Waste Recycled into affordable food 12
Akotop NH - non-hydro solution for whipped toppings Functionality and health Non-hydro and Non-trans Clean label Excellent physical and sensory properties 250 Whipping test Overrun % 200 150 100 50 Akotop NH Cream Reference hydro 0 60 120 150 210 270 Time sec 13
Akomix LS 25 - improved nutritional profile in ice cream Functionality and health - taking ice cream innovation to the next level Akomix LS 25 reduces saturated fats in the ice cream Ice cream based on Akomix LS 25 is allowed to carry, the EFSA approved nutrition and health claims in the EU % 100 80 60 40 20 0 Coconut oil Milk fat Akomix LS25 SAFA MUFA PUFA Trans An opportunity to profile your ice cream as a better-for-you product in the premium range! 14
Akoblend SB - structure builder in churned butter blends Functionality and cost efficiency Increase the amount of vegetable fats with maintained structure Non-hydro Non-trans Cost efficiency Same equipment can be used Example: By addition of 8% Akoblend SB NH, the butter content can be reduced with 25%, with maintained structure and functionality 15
Dairy for the future The segment will grow by offering: Dairy Extension for affordable food Side Stream Management Consistent supply Improved functionality Cost efficiency Improved health profile Total concept 16