The global UHT Milk Market size is growing at a CAGR of 2.4% during the forecast period. Factors like high nutritional value and lower fat content drive the demand for UHT Milk market.
Ultra-high temperature (UHT) milk is sterilized at higher-than-usual temperatures for around two seconds before packaging to prolong its shelf-life. The process is done to kill the bacteria and germs present in the milk. Similar to pasteurized milk, UHT milk is fit for consumption and has a higher shelf-life of more than three months. People living in developed regions and growing working populace prefer buying groceries in bulk as they have less time for shopping, which is a prime reason for its increasing demand globally.
The dairy sector plays a significant role in the global economy, as there is a surge in aggregate milk consumption. According to FAO (Food and Agriculture Organization), the global milk output is estimated to reach 843 million tons in 2018, up by 2.2 percent from 2017. The ready-to-drink feature and availability of a variety of flavors of UHT milk are key factors driving the market growth. The high nutrient content of the UHT milk has gained popularity for the product among cultured beverage manufacturers and young millennials.
|Fastest Growing Market||Asia Pacific|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
In the last few decades, the food and beverage industry is experiencing rapid change, owing to the changing consumer preference and growing demand for functional foods. Increasing awareness among people regarding the nutritional benefits of organic and functional foods has reduced the demand for conventional and synthetic beverages. A Poland based company, SM Mlekovita, included UHT ready-to-drink milk with high magnesium and low-fat content for stress relief in its product portfolio.
Apart from low-fat content value, UHT milk is combined with high fiber, prebiotics, vitamins, and iron for the growth of beneficial intestinal bacteria and helps improve intestinal function and natural defenses. To cater to the debouching trends in the beverage industry globally, key players in the market are serving consumers special UHT milk blends. The technological advancements in the filling machines and select mixing units have made it easier to adapt and unveil new products for the market. Furthermore, the attractively packaged flavored UHT milk-based smoothies and cultured beverages for kids with necessary nutrients are expected to bolster the market growth in the coming years.
The demand for UHT milk is rapidly growing in the residential and commercial sectors. UHT milk consumption allows people to store milk for a week, which reduces their regular visits to the stores. Key players in the market are innovating and introducing additional flavors in attractive packaging, thus gaining significant traction among the millennials. The demand for UHT milk is rapidly growing in terms of volume in the commercial sector, backed by the booming demand for ready-to-drink products.
European spearheads the market as it has one of the largest dairy markets globally and a growing consumer base for the UHT milk type. The burgeoning dairy sector in Italy, Germany, Belgium, and Spain and the rise in the per capita consumption of milk drives the market growth. Further, the recent advancements in the marketing and distribution of UHT milk as compared to other types foster the regional market.
Consumers in Western Europe are consuming more milk than ever before, among which the UHT milk accounts for more than half of the milk sales in the Western Europe market. The European region experienced a higher sale in the organic UHT milk over conventional milk and other dairy products. Figures recorded by the Euro Commerce state that the value of the Hungary UHT milk market rose by 8% from the year 2017 to 2018. A similar trend was observed in the Portugal dairy products market for UHT milk and its by-products, such as UHT-based cream.
Asia-Pacific is predicted to showcase a lucrative growth rate in the UHT market during the forecast period. Among the region, it is evident that UHT milk is more popular than its counterparts in China, and India is expected to follow a similar growth trajectory. The growth in the region is largely attributed to the ever-growing population and gradual shift towards a working lifestyle.
Moreover, robust consumer spending in emerging economies will facilitate the demand for the product. People in the Asia-Pacific region are gradually adopting western culture and are willing to spend more on premium products. Increased urban population, particularly in China and India, are generating a lucrative market opportunity for the UHT milk industry. The below-mentioned info-graph depicts the estimated market potential for the regions during the forecast period.
The first-tier cities in China, with a dense population and 90% internet penetration, are reshaping the distribution of the UHT milk market. Individuals living in such cities are inclined towards online shopping, thus presenting ample growth opportunities for the manufacturers. Compared with the developed world, the APAC region is poised to lead the market in the next five years.
The online retail segment holds the highest share in the UHT milk market. There is a very high demand for milk and other dairy products in most households, backed by its high nutritional value. Consumers around the world are spending more time on the internet and are involved in online shopping. The higher internet penetration rate, particularly in the U.S. and European countries, has built a platform for the manufacturers.
Companies seeking to expand their sales and online presence are actively working with e-commerce websites. The online stores have gained traction in terms of consumer preference as they provide a broad range of essentials and doorstep deliveries at competitive prices. Moreover, the evolution of the D2C distribution channel for direct delivery to consumers has provided an impetus to the segmental growth.
The COVID-19 outbreak has cast uncertainties for industries worldwide. With government guidelines for lockdown and social distancing norms, the manufacturing companies are operating with half of their workforce capacities. Moreover, the sealing of international borders has led to supply chain disruptions. Severe lockdowns have limited the movement of people and distancing among civilians. Despite the plummeted growth of the businesses, the dairy industry is considered as an essential industry observed to have a positive growth during these unprecedented times. Globally, the consumer demand for shelf-stable foods has soared due to its extended storing property.
In March 2020, India witnessed an almost 20% surge in the sale of packaged UHT milk and other dairy products amid the COVID crises. In the past few months, the UHT milk market observed a sudden growth as consumers stock up for uncertain times. From the supply side, the key players, in order to avoid the unforeseen challenges due to supply chain disruptions, have increased manufacturing of UHT milk, which can be delivered within three months. Unlike its counterparts, it helps the key players mitigate losses from spoilage and contamination, thereby facilitating the gradual growth of the market in the coming years.