Demand for Organic Milk to Spur as Natural and Organic Foods Go Mainstream Through 2028

The organic milk market is likely to maintain a healthy growth rate during the assessment period 2018-2028, as steadily growing awareness among consumers in the last decade translates into commercial opportunities for companies. The organic milk market continues to be in ascendancy, despite longstanding challenges pertaining to high prices. Although global demand for organic milk remains limited to a cohort of consumers, particularly those with higher disposable incomes, recent sales figures in emerging markets are encouraging. Fact.MR, in its latest study on the organic milk market, estimates global sales to increase by 440,000 liters in 2018 over 2017.

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The report projects that the sales of skimmed organic milk are estimated to witness an upswing throughout the period of assessment on the back of high protein and calcium content. Further, less cholesterol content in skimmed organic milk continues to remain instrumental in driving demand for the product, particularly among consumers focusing on fat reduction. However, the demand for partly skimmed organic milk is projected to expand at a relatively faster pace during the period of forecast. According to the Department of Health, partly skimmed organic milk is a favorable choice for babies owing to easy digestion and nutrient content.

Growing health concerns and focus on well-being have translated into obligations on the use of organic labels and certifications. Consumers have been cautious regarding ingredients in food items they consume and organic milk and its derivatives are no exception. This has led market players to adopt clean labels that detail the ingredient content including the percentage of fats and other vitamins. However, growing distress among small-scale farmers about stricter regulation in emerging markets continues to pose challenges.

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Modern trade continues to be the largest distribution channel for organic milk globally. Modern trade, comprising of supermarkets and hypermarkets involved in selling FMCG products are extending their organic product ranges to meet the increasing demand for organic milk worldwide. This has resulted in an increased revenue generation via modern trade, making it an attractive revenue funnel for organic milk producers. Impressive sales have also been reported from online channels, and it is highly likely that this distribution channel will evolve during the course of the forecast period.

Segmentation

The organic milk market is segmented on the basis of product type (skimmed milk, whole milk and partly skimmed milk), source (cow, buffalo and other sources), packaging type (pouches, cans, bottles, tetra packs and bulk packs), pasteurization type (high temperature short time method, ultra-pasteurization and vat pasteurization), distribution channel (HoReCa, specialty stores, modern trade, convenience stores, e-retailers and other), flavor type (non-flavored and flavored) and region (North America, Latin America, Europe, CIS & Russia, Japan, Asia Pacific excluding Japan and Middle East and Africa).

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Fact.MR’s research study also profiles the business and product strategies of some of the leading players in the organic milk landscape. According to the report, the organic milk market is a consolidated landscape, with few players accounting for high revenue shares. The consolidated nature of the market can be gauged from the fact that the top four companies account for nearly 30% revenue share of the market. The study finds that large players in the organic milk market are focusing on product line extensions to meet the evolving demand. The tier II and tier III players are also focusing on joint ventures to increase their global footprint and capitalize on the emerging opportunities in new markets.

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