gps leaders conference · 2020-06-05 · protein consumption & income growth 16 luxembourg...
TRANSCRIPT
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GPS Leaders Conference:Global Dairy & Milk Protein OpportunitiesNovember 2016
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If this can happen…..anything can happen!
3
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Topics covered
+ Hoogwegt Organization
+ US Dairy Export Update
+ Global Trends
4
+ Where can the US play?
+ Market Outlook
+ Conclusion
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The Parent Company: Hoogwegt Groep B.V.
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6666
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Topics covered
+ Hoogwegt Organization
+ US Dairy Export Update
+ Global Trends
7
+ Where can the US play?
+ Market Outlook
+ Conclusion
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U.S. Export Evolution
8Source: USDEC
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US Exports Product Mix 1995-2015
9
Cheese
Lactose
Whey
Nonfat
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US Dairy Export Product Mix
Non-Fat Dry Milk Whey Lactose Cheese And Curd Butter And Milkfat Dry Whole Milk&Cream Yogrt&Othr Ferm Milk
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US Export Product Mix- 1996 to 2015
10
Non-Fat Dry Milk7%
Whey41%
Lactose26%
Cheese And Curd11%
Butter And Milkfat
7%
Dry Whole
Milk&C…
Yogurt & Other
Casein1%
1996
Non-Fat Dry Milk32%
Whey25%
Lactose21%
Cheese And Curd18%
Butter And Milkfat1%
Dry Whole Milk&Cream
2%
Yogrt&Othr Ferm Milk1%
Casein0%
2015
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US Trade destination evolution: 1996 to 2015
11
China1%
Japan & S. Korea24%
Mexico19%
Canada14%
Southeast Asia7%
Oceania1%
Latin America9%
Middle East & Africa
6%
Other19%
1996
China15%
Japan & S. Korea10%
Mexico25%
Canada6%
Southeast Asia20%
Oceania6%
Latin America9%
Middle East & Africa
5%
Other4%
2015
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2015 Annual Export Trade Data Highlights
Total Value of U.S. Dairy export
12
Total Lbs. U.S milk solids exported
Percent of U.S milk production exported
Percent of US whey proteins exported
Percent of U.S SMP/NFDM exported Percent of U.S. butterfat exported
Percent of U.S. cheese exported
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2016 Most Recent Results- on the upswing
+ Overall volume up 23% through August
+ NFDM YTD Exports up slightly through August
+ Mexico +30%, SE Asia down 5%, Pakistan down 16%
13
+ Cheese YTD exports down significantly
+ WPC exports up significantly, a bright spot
+ China up 46%, SE Asia up 13%
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Topics covered: Global Trends
14
"There is no reason anyone would want a
computer in their home."
– Ken Olson, president, chairman and founder of
Digital Equipment Corp., 1977
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Global Trends and Dietary Implications
+ Urbanization
+ More restaurants, particularly “QSR”, to serve a busy lifestyle.
+ Improved Cold-chain infrastructure
+ Transportation of goods easier and safer than ever before
+ Better science and consumer nutritional awareness
+ Benefits of dairy for all ages
+ Trade liberalization
+ As markets open, some distortions in trade allow dairy to become more affordable
15
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Protein Consumption & Income Growth
16
Luxembourg
United StatesIceland
European Union
China
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
100 150 200 250 300 350 400 450 500 550
GD
P P
er C
apit
a ($
)
Protein Consumption (g/Capita/day)
Protein Consumption vs GDP Per Capita (2010)
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American QSR Chains Expanding Globally
17
18,710
11,798
10,109
5,890
5,727
4,998
4,422
3,005
802
755
McDonald’s
KFC
Subway
Pizza Hut
Starbucks
Burger King
Domino's
Dunkin Donuts
Dairy Queen
Papa John's
NUMBER OF INTERNATIONAL RESTAURANTS AS OF 2013
Source: Forbes
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2025 Milk Supply Forecast
18Source: IFCN
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2025 Consumption Forecast
19
• More Cows: 370 million dairy animals now to 405 million. Increase of 35 million dairy animals needed in 10 years.
• Global Dairy appetite: Dairy consumption per capita expected to grow from 114 kg ME to 127 in 2025-- 12% increase
• World trade gaining importance and relevance: World trade increased by 29% from 2005-2015. For the next 10 years, trade is expected to grow 51% , or 26 MMT of more products. 13 times US’s exports
Source: IFCN
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Annual Growth Rates of Per Capita Consumption
20
-1
0
1
2
3
4
5
6
2006-15 2016-25 2006-15 2016-25
Developed Developing
%
Fresh dairy products Cheese Butter Skim milk powder Whole milk powder
45% higher growth rate
Source: FAO
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Topics covered: Where Can the U.S Play?
“The entrepreneur always searches for change, responds
to it, and exploits it as an opportunity.”
– Peter Drucker
21
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Opportunities abound
22
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Higher Quality Spec Potential Growth
23
10%
10%
3%
2%
2%
3%
2%
7%
Milk and dairy drinks:Low Heat, high heat stable
Infant Formula Micro spec
Chocolate
Coffee- Instant
Biscuits- Medium Heat
Ice Cream- Low Heat
Bakery products- High Heat
Yogurt- Low Heat
PROJECTED MARKET GROWTH- DAIRY PRODUCTS
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Higher Quality Spec Potential Growth
24
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100
120
140
160
180
200
220
240
260
280
300
2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
s lb
s
Year
Yearly WPC (50-89.9) Production
Product Innovation
25
101% increase
20
30
40
50
60
70
80
90
100
110
2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
s lb
s
Year
Yearly WPI Production
148% increase
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Topics covered
+ Hoogwegt Organization
+ US Dairy Export Update
+ Global Trends
26
+ Where can the US play?
+ Market Outlook
+ Conclusion
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Volatility!
27
Dairy commodity prices FOB Oceania, 2006-2016
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Production Decline
28
Milk Production growth, Big 7 exporters, 2008-2017f
Source: Rabobank
Milk Production growth in key export regions May-Jul 2016
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EU supply developments by country
29
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Imports January – July 2014-2016 - total of the big 8
30
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…. But Stock Overhang
31
0
100
200
300
400
500
600
Jan
-12
Jun
-12
No
v-1
2
Ap
r-1
3
Sep
-13
Feb
-14
Jul-
14
De
c-1
4
May
-15
Oct
-15
Mar
-16
Au
g-1
6
Jan
-17
Jun
-17
No
v-1
7
EU-28 monthly SMP stocks estimates ('000t)
Intervention Private
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General price direction, upside and downside influences
32
Upsideinfluences
Downside influences
Source: Hoogwegt
Feb AprMar MayOct
• EU supply contracts due to weak cash positions and reduction premiums
• Russia remains absent
• Commodity prices are translated into lower retail prices
Dec
• Chinese import levels increase gradually
Jan2017
• Weak start of the Southern hemisphere supply season
• Dairy imports by oil exporters remain slow as oil prices recover only slowly
• US supply growth improves due to weather and solid farmer margins
Nov
• Above average end user coverage
• LatAm supply growth returns towards end of season
• Buy side stocks are falling back to normal levels
• Better than expected market recovery could trigger EU tostart reselling intervention stocks
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Topics covered
+ Hoogwegt Organization
+ US Dairy Export Update
+ Global Trends
33
+ Where can the US play?
+ Market Outlook
+ Conclusion
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Conclusion
“Failure is not fatal, but
failure to change might
be.” –John Wooden
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Conclusion
+ We are part of a global economy and cannot escape.
+ If we want to grow we need to think globally and give attention to global customers.
+ Adaptability and agility is key to success.
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