Say no cheese: Europe’s dairy demands falling amid preference for plant foods

A mixture of rising prices and increasing competition from plant-based alternatives is leading consumers to think twice before restocking milk, cheese and ice cream. — dpa

DAIRY sales in Europe have been dropping while people look to plant-based alternatives, a shift that could see the continent’s cheesemakers look to other markets, according to new research by Rabobank.

The Rabobank report follows recent shifts in established markets: sales of plant-based “cheese” in Europe increased by 21% from 2020 to 2022, according to a 2023 report by Good Food Institute Europe.

Later in the year, dairy industry analysts at Kite found the sector to be facing “perfect storm of weak demand caused by inflationary price increases.” Dairy has been caught up in the inflation wave that has hit Europe since mid-2021, with prices for shoppers rising along with most other food items.

It means experts are predicting dairy producers will look to China for sales in the coming years as cheese consumption flatlines in established markets.

“We estimate China’s annual cheese imports will reach 270,000 to 320,000 metric tonnes in 2030,” said Michelle Huang, dairy analyst at Rabobank, which in a recent report predicted China would be “a growth engine for the global cheese trade.”

Although the market for cheese in China grew at around 16% a year from 2012-22, consumption among China’s 1.4-billion population remains relatively low, not only compared to Europe and North America but weighed against cheese-eating per capita in wealthier neighbours Japan and South Korea.

“Drivers of this growth include a rise in disposable income among middle-class consumers, the growing appetite for Western-style quick-service-restaurant chains, and novel uses of cream cheese and mozzarella,” Rabobank said.

And although domestic Chinese cheese production is rising, it is not likely to be enough to meet local demand, Rabobank predicted, meaning dairy-exporting powerhouses such as New Zealand, the United States, the Netherlands and Ireland could have an opening, not least as India, the world’s biggest dairy producer, needs most of its output for its 1.4 billion people.

Farmers in Europe have been protesting over what they see as increasingly stifling rules, some of which are aimed at cutting emissions in sectors such as dairy, but which they say are making it more complicated and pricey to operate. – dpa