Tetra Pak’s global markets are mainly characterised by macroeconomic stability, with a few exceptions. Population growth in India and certain countries in Africa and Asia are expected to have positive effects on both consumption and economic growth.
An important factor that has generally impacted the food and beverage industry is sustainability. More stringent legislation in, for example, the EU and awareness of climate change has generated media and societal attention. A tangible consequence is that global brands have released new sustainability targets and packaging policies, putting pressure on the value chain upstream to deliver viable solutions. Tetra Pak, having a packaging solution mainly built on renewable materials is well positioned to meet those demands.
The effects of market trends on Tetra Pak’s businesses can be viewed in light of the different product categories.
Both the Tetra Pak processing and packaging businesses are focused on liquid dairy consumption, a category that continues to grow. Milk consumption has increased by an average of 1 per cent year-on-year. The competition in ambient liquid packaging is intensifying, affecting our market share in the white milk ambient packaging segment.
Processing is benefitting from continued growth of the milk powder market and is leveraging the intensification of the value-added dairy chilled business globally. The challenge will be to manage channel sales to system integrators, as two main competitors are increasing their focus on component sales and related services.
The ambient juice and nectar category continues its decline and value loss, mainly driven by price, sugar debates and health trends that motivate consumers to select other options. In Brazil for example, high-end consumers are switching to fresh-squeezed juices, while low-end consumers are opting for juice powders. In France, there is a heightened preference for infusions and flavoured bottled water, with a strong growth of organic nectar and juice trends driven by private labels. North American consumers are shifting from 100 per cent juice to 50 per cent juice due to sugar concerns.
This category continues to drive growth in the processing business. The main opportunities are in Europe and the US, but there is emerging interest in China as well as in the Middle East. The processed cheese segment is growing and represents an opportunity for all businesses. Customers are looking for product diversification and added-value cheese products, therefore flexible production solutions are important to enable this diversification. This is valid for both traditional and “new” cheese-making businesses, such as liquid filled cheese (white cheese, queso fresco, etc).
In beverages, the focus on water continues. The current volumes of 352 billion litres have been augmented with a segment for flavoured and functional water, adding another 15.3 billion litres. Processing continues to focus on expanding and strengthening the entire still-beverage segment to prepare for growth in carbonated beverages.
The main trend among customers will continue to be the premiumisation of ice cream to appeal to the diversifying demands of consumers. As incomes rise, consumers are seeking niche products with higher value, and improved flavour and quality. In the bulk ice-cream segment, private label continues to take market share and is now investing in their own production units.
The food category also shows strong growth potential, both in the solid and viscous segments and across all businesses. Shelf-stable and pet food represent a total of 25.7 million tons of opportunity for Tetra Recart® packages, while tomatoes, soups, broths and sauces add 39.5 million tons of opportunity for both packaging and processing.
Innovation, customer support and marketing services will help secure Tetra Pak’s future growth. The programme called Global Market Growth Initiatives promotes new product opportunities that leverage consumer trends and market dynamics. Within the dairy segment, products such as cheese and spoonable yoghurt offer great potential for all businesses, while packaging is developing opportunities within plant-based beverages, as well as baby and toddler’s milk.