Value addition will spur dairy industry growth- Tetra Pak boss

In 2014, Rwanda unveiled a new strategy aimed at enhancing the dairy sector’s competitiveness and production. According to the Rwanda National Dairy Platform, the plan was to help streamline the dairy sector and ensure proper co-ordination of stakeholders, as well as enhance skills of small farmers to improve the quality of milk and its products. This would help boost institutional capacity building and increase consumption of milk among Rwandans and help foster linkages. However, Dennis Jönsson, the president and Chief executive officer Tetra Pak a multinational food packaging and processing company based in Sweden says investing in packaging and consumer confidence is critical for Rwanda’s dairy industry. Jonsson was in the country recently and talked to Business Times’ Peterson Tumwebaze on how Rwanda can better its milk industry and manufacturing sector as a whole. Tetrapark commissioned an international study on milk business and consumption recently, what was the objective and what were the findings? In a world where consumers are increasingly focused on health and wellness, milk has become relevant today as it ever was. Our study therefore shows that consumers in both developed and developing markets still have an overwhelmingly positive view of milk despite occasional anti-milk messages. Dennis Jönsson, the president and Chief Executive Officer Tetra Pak The study also shows that many consumers are aware of the debates about milk, they express no doubt about its goodness – a word that still very much captures what might be called the “brand promise” of dairy. Our new study shows that consumers worldwide have an overwhelmingly positive view of milk. Consumers think milk is a good source of calcium, nutritious, healthy and tasty Milk’s enduring reputation for goodness is founded on decades of research showing it provides energy and nutrition that’s hard to replace. In short, the findings of our report indicate that the key to energising dairy in all markets is to make consumers excited by milk; to show that it is convenient, pleasurable, a special treat even, and relevant to all. What are some of the lessons Rwanda learn from the Swedish dairy sector? Developing markets are eagerly embracing dairy products, helping drive global demand to record highs. Here brand owners are thriving through innovation, designing products that meet consumer needs in markets where there may well be no dairy tradition at all, with categories being created almost from scratch in just a few generations. It is therefore very critical for sector players to embrace innovation and value addition. That innovation is inspiring. It offers an excellent reference point for developed markets, where dairy’s lustre may have been dulled by sheer familiarity; and where the industry perhaps needs to believe in milk again. Companies need to recognize the importance of fresh thinking: the need to come up with new flavours, new combinations of ingredients, new looks, new names and new approaches for their products; this is how you can grow the sector. Does this explain the low consumption of milk in such economies? Ideally yes; because such companies see that the consumption dip has nothing to do with consumers not seeing the benefits of milk – rather, it’s because the products available are not sufficiently evolved to meet the modern lifestyle. It is therefore obvious that being able to bridge the gap between production and consumption will make the sector successful. Our report highlights the critical role that marketing and communications must play in supporting this fresh approach. But traditional products are not enough today, modern consumers want beverages that deliver maximum health benefits and fit into their pace of life. There are huge opportunities for innovative producers that can bridge this gap. Milk has a good story to tell: a story that is positive, rigorously researched, and scientifically sound. It needs to be heard by opinion formers and consumers alike. But that story must speak not only to the mind, but also to the heart. However, in some advanced markets dairy consumption per capita is at an all-time low, but the overall global market is still expanding, mainly due to strong growth in the developing world. Therefore understanding and delivering exactly what consumers want, and knowing how best to reach them, can help the dairy industry to maximize performance in all markets including Rwanda. Connecting consumers to producers The need to conduct targeted campaigns to be able to connect consumers with producers is critical for success of the industry. Innovative new products is only part of the story, it’s just as important to find new, more relevant ways of communicating with consumers to boost competiveness of the sector. Campaigns worldwide are building on the story of milk’s goodness, combining the facts of milk’s nutritional and health benefits with more emotional appeals. Social media is also being used to spread milk’s many positive messages. The key to energizing dairy in all markets is to make consumers excited by milk; to show that it is convenient, pleasurable, a special treat even, and relevant to all. This is the essence of the “new good” of milk: to demonstrate that this uniquely versatile, convenient, customizable liquid food can reach out to young and old, and to everyone in between, by constantly adapting to meet their ever-changing needs. It is very important to understand that in the most successful cases, Milk refers to a clearly differentiated product that commands a premium price, serves a niche market and, where possible, also expands the general market. Tetra Pak recently announced it was committing 100% to renewable electricity by 2030, what is the objective? Tetra Pak’s decision to join RE100 once again underscores its commitment to tackle climate change, and comes just six months after the company joined the Paris Pledge for Action at COP21. Since setting our climate goal we have maximized our efforts to reduce energy consumption; committing to a renewable electricity target is a natural next step. By joining RE100 we will benefit from expert guidance and peer-to-peer learning on renewable electricity options in different markets. It is important for industrialists to embrace renewable energy for sustainability of the sector.

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Value addition will spur dairy industry growth- Tetra Pak boss