February 08, 2023

International demand fuels increasing U.S. dairy exports

MADISON, Wis. — U.S. dairy exports are growing at twice the rate of consumption by American consumers.

“In 2021 we had a record year for volume and value of U.S. dairy exports,” said Megan Sheets, senior director of strategic development and strategic insights for the U.S. Dairy Export Council. “That was really driven by rebounding international demand as people started to normalize after the pandemic.”

Although the export council does not expect to see the same increases of dairy exports in 2022, they are looking for positive growth numbers.

“About 18% of U.S. milk production goes overseas and we’re anticipating that number to be 20% in the upcoming years,” said Sheets during a presentation at the World Dairy Expo.

About 95% of the world’s population lives outside of the United States.

“This points to the size of opportunity when working with consumers across the globe,” Sheets said.

Over the past year, Sheets said, Southeast Asia, China and Mexico have been three really strong markets for U.S. dairy products.

“The major products we’re exporting across the globe are skim milk powder, nonfat dry milk, dry whey and cheese,” she said.

In past years, Sheets said, exports were more supply driven.

“We were exporting surplus product,” she said.

Now, the dairy council is seeing a shift to a demand-driven market.

“Understanding what’s important to consumers and customers in global market is fundamental to our ability to grow dairy exports,” Sheets said.

The export council completed a Competitive Corporate Assessment study to determine what corporate competitors were doing.

“One of the key takeaways from the study is a lot of our corporate competitors have embraced the demand-driven approach at every level of their business,” Sheets said. “It’s driving product innovation and research priorities for the markets they’re investing in.”

Sheets talked about several trends driving international demand for dairy products, including taste and enjoyment.

“The pandemic has made a long-term impact on so many people across the globe by changing the way we behave, consume information, technology, food, beverage and it’s changed many people’s aspirations and shaped our views,” she said. “We’ve gone through about 10 years of change compounded into three years.”

Change is uncomfortable and difficult for many people.

“It’s no surprise consumers across the globe are turning to taste and enjoyment and finding those moments of comfort with food and beverage,” Sheets said. “That poses an opportunity for many dairy categories and especially cheese.”

Through a global study, the export council learned that taste is the No. 1 purchase driver of cheese across the globe. However, what tastes good could vary greatly in different markets, so the council worked with consumers in Saudi Arabia and South Korea to learn more about the types of cheese they like to eat.

“We saw a lot of processed cheese in Saudi Arabia, more than we were anticipating,” Sheets said. “We learned they like a balanced flavor profile with some sweet and sour nodes, but they did not like bitter cheese or cheese that was overpowering in smell or taste.”

The study showed consumers in South Korea prefer mild cheese and the milk forward profile stood out.

“Color was important and white symbolized freshness of ingredients,” Sheets said. “Texture was more important and they prefer creamy, soft, white cheeses.”

The second trend driving demand is sustainability.

“The No. 1 concern has shifted from the health of the population in 2020 to the now the health of the planet,” Sheets said.

“Not only do consumers care about sustainability, it’s a purchase driver in Southeast Asia and Mexico,” she said. “They’re making purchasing decisions based on sustainability performance.”

The export council sees sustainability as a tailwind for U.S. dairy exports.

“We have so many forward-looking initiatives happening on U.S. dairy farms that we know there’s an opportunity to share that message with customers across the globe,” Sheets said.

Nutrition and wellness is another trend important for dairy demand.

“A lot of consumers are prioritizing their health and using nutrition as one way to manage stress and remain healthy long term,” Sheets said.

This is creating a growing demand for proteins.

“What’s really interesting is consumers view protein as serving many health attributes they associate with nutrition,” Sheets said. “Consumers think protein is good for immune health, muscle health, their overall well being and energy levels.”

In addition to protein, the consumer interest in nutrition is also fueling a demand for yogurt.

“The No. 1 purchase driver for yogurt is health,” Sheets said. “We anticipate there will be a steady demand for yogurt and we might see an increasing interest for drinkable yogurts to have a convenient option for health on the go.”

The accelerated use of technology from the pandemic has made dairy more accessible and convenient for consumers. One example of this is the live commerce platform, which is really growing in popularity in the Asian countries.

“With this platform, you can instantly interact by using your phone to buy food, beverages or any consumer packaged good from someone who is doing a live retail broadcast,” Sheets said.

The export council is focused on delivering the U.S. dairy story directly to consumers around the world.

“We’re launching a USA Cheeseboard App where consumers overseas are able to use this app to learn more about U.S. cheese, recipes and pairings,” Sheets said. “We’re really excited about technology and what its enabled us to do to engage with consumers.”

Although there are many global tailwinds for U.S. dairy, Sheets said, there are also challenges ranging from labor, workforce and logistics, as well as inflation.

“In any time of challenge, there’s always the opportunity to innovate and find solutions by thinking differently than we have in the past and look towards the long term when the short term is difficult,” she said.

For more information about the U.S. Dairy Export Council, go to www.usdec.org or call 703-528-3049.

Martha Blum

Martha Blum

Field Editor