#16 - The collapse of the dairy industry

💡 One idea: The collapse of the dairy industry

📈 One data figure: From 8% to 80% renewables in Morocco

✨ One success: ULUU, towards a post-plastic world

💡 The collapse of the dairy industry

The dairy industry today represents almost a trillion US dollars globally, but its golden age seems to have passed. The market is now shrinking a little more every year, a far cry from the golden days of the 70s and the 80s, when drinking a glass of milk a day was recommended on TV and at school.

The cheese and yoghurt markets are growing, but do not make up for the fact that people simply drink less cow's milk. Although the global trend is well documented, it is difficult to know precisely why consumers' habits are changing.

A study published in The Lancet revealed that 68% of the global population is prone to lactose malabsorption. From 28% in Europe to 70% in the Middle East, this proportion varies greatly across the world as shown on this fascinating map: Lactose Intolerance by Country.

Moreover, the dairy industry is responsible for about 7% of greenhouse gas emissions globally, three times more than the aviation sector. The growing appetite for less carbon-intensive food is pushing consumers towards plant-based milk. In fact, oat milk generates 3.5 times less CO2 and uses 13 times less water per litre produced than cow's milk. Plant-based milk alternatives do compete with traditional milk, but the increase in their sales does not explain the decrease in sales of cow's milk alone.

Fortunately, it is not all doom and gloom for dairy cow farmers. The size of the global organic dairy market was $22.2b in 2021 and is expected to reach $34.8b by 2027, exhibiting a reassuring CAGR of 7.9%.

The dairy industry will not completely disappear, but it will certainly be deeply transformed. Some experts think that, in 20 years, it could look like it was 100 years ago:

• A smaller global market dominated by organic certified milk
• Grass-fed cows only
• Less than 100 cows per farm on average
• Low technical inputs (tractors, chemical) but high human inputs (skilled jobs)
• Premium prices

For now, this might look more like a desirable future than a transformational plan, but the dairy revolution has undoubtedly already started.

📈 From 8% to 80% renewables in Morocco

The Renewable Energy Country Attractiveness Index (RECAI) ranks countries on the strength of their renewable energy market (see ranking here). The index benefits large economies, and the top three countries logically are the US, China and India. However, by normalizing the RECAI with the GDP, you can identify countries that are punching above their weight when it comes to renewables - much more relevant. Here is the normalised ranking:

Then, it is interesting to compare the share of renewable energy in the national production mix of each of these countries (source). Morocco clearly stands out!

• Morocco: 7.64%
• Greece: 19.39%
• Jordan: 20+%
• Denmark: 39.25%
• Chile: 26.52%

Morocco's energy mix includes little renewable energy, but the sector is surprisingly dynamic. The country has huge untapped potential:

• 3,000 hours of sunshine per year
• favourable topographical features in the Atlas Mountains
• the world's lowest price for wind power (less than $0.03 per kilowatt-hour)
• an institutional framework for green hydrogen investments

The country has ambitious targets and aims to generate 52% of its energy from renewables by 2030, and 80% by 2050.

✨ ULUU, towards a post-plastic world

Dubbed the eighth continent, the Great Pacific Garbage Patch lies between California and Hawaii. It contains 1.8 billion pieces of floating plastic and is responsible for the death of thousands of marine animals each year. Most raw materials used in the plastic industry are obtained from crude oil and are not biodegradable. Whoever finds a way to produce affordable biodegradable plastic at scale will get handsomely rewarded!

Let me introduce you to ULUU. This Australian start-up developed a unique way to produce what they call the "world’s first carbon-negative and home-compostable polymer". From farmed seaweed, seawater and saltwater microbes, the team of engineers and scientists can synthesise a durable yet biodegradable plastic via a fermentation process.

The co-founders Julia Reisser and Michael Kingsbury have just announced a successful round of $5.3 million led by the Australian VC Main Sequence. The capital will notably enable product development and engineering R&D to build a pilot plant. The first products are expected to be launched in a year or two. In particular, ULUU is exploring applications with major consumer brands in the sustainable fashion segment.

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