Though dairy merchandise from milk to ice cream are very generally discovered within the kitchens of ASEAN shoppers, the actual fact stays that per capita dairy consumption within the area is much decrease than that in lots of different markets, at lower than 20kg per capita in comparison with round 300kg per capita in the USA in keeping with Statista.
It is rather frequent for Western households to purchase massive 2L to 3L cartons of milk on a weekly foundation, however in South East Asia the best-selling carton sizes are the 1L cartons, which aren’t essentially bought weekly both.
In keeping with one in all China’s largest dairy corporations Yili, this decrease consumption will be defined by widespread lactose intolerance within the area – research have estimated the frequency of lactose intolerance in shoppers to be between 90% to 100%.
That mentioned, the agency stays assured within the plans it beforehand revealed for the ASEAN area, standing by its sturdy perception that this present state of affairs is because of client habits which were fashioned through the years – a state of affairs which may nonetheless be corrected with correct client schooling and promotion.
“Dairy merchandise have historically been thought to be meals for youngsters and the aged, and there are massive lactose-intolerant populations in South East Asia – this in flip means dairy has not [had the chance to be] included into regional delicacies but,” Yili Assistant President Dr Yun Zhanyou advised FoodNavigator-Asia.
“The one option to overcome that is for all the trade as an entire [to not merely accept the current situation as status quo], however give attention to introducing the deserves of dairy merchandise to South East Asian shoppers and allow them to get pleasure from the advantages of this wholesome meals – ultimately, there’ll come a time when dairy is totally included into the regional delicacies.
“The well being advantages of dairy can’t be ignored [especially] relating to protein and calcium, [and] elevated well being consciousness amongst ASEAN shoppers has meant that their use of dairy merchandise is on the rise – there are over 650 million individuals within the area, representing a really big alternative.
“As well as, [we also know that] varied governments comparable to Thailand have been energetic in selling the incorporation of dairy in diets, and launched initiatives to encourage the consumption of milk in faculties – Thailand has witnessed a increase in its dairy market lately, as native residents more and more devour dairy merchandise to help more healthy existence, [so full incorporation is possible in the long term].”
The opposite fundamental hurdle that the dairy market has been dealing with within the area is provide chain associated, which inadvertently results in increased prices for prime quality dairy – not the most effective state of affairs in a market that’s extraordinarily price-sensitive.
“The dairy trade has a really lengthy worth chain, [but in South East Asia the] native dairy trade is comparatively weak with a less-developed industrial chain, a scarcity of premium pure farms, and a lack of awareness and technical expertise amongst dairy farmers – that means that it’s costly to construct up the trade within the area,” mentioned Dr Yun.
Yili has established two South East Asian services in Thailand and extra not too long ago Indonesia, however Dr Yun acknowledged that even with these native manufacturing vegetation and on-the-ground operations, dealing with the provision chain in markets the place this isn’t so developed – significantly compared to markets the place that is extraordinarily superior like China – stays a really huge barrier to growth for the agency.
“Geographic and climatic components additionally represent obstacles for dairy transport – e.g. the inhabitants of Indonesia and another South East Asian international locations are scattered throughout numerous islands, which creates challenges for product distribution,” he mentioned.
“The humid climate circumstances additionally make it essential to implement an industrial chilly chain system with higher efficiency, because it takes extra time and better prices for dairy merchandise to achieve distant areas and islands – [which in turn] can result in increased product costs for increased high quality merchandise.”
Intense competitors
Apparently, Dr Yun additionally identified that regardless of the excessive ranges of lactose intolerance and low provide chain growth, one other main problem the agency is dealing with within the area is mockingly that of intense market competitors from different international locations.
“The South East Asian market is very depending on imports relating to dairy, which in flip implies that we’ve to compete intensely with different cross-border dairy manufacturers along with native dairy enterprises,” he mentioned.
“[This] does showcase how dairy has remained a well-liked merchandise regardless of the excessive lactose intolerance ranges right here [but also that] in an effort to stand out from others, we have to prioritise the event of high-quality merchandise and construct differentiated, localised manufacturers by means of revolutionary R&D and advertising and marketing right here on this area.”
In keeping with a 2019 ASEAN dairy trade research, the international locations with the best dairy import volumes are Malaysia, Philippines, Singapore and Thailand, with essentially the most imports coming in from Australia, Argentina, the EU, New Zealand and the USA.
Yili has recognized many ‘unhappy wants’ for dairy merchandise in South East Asia, which it intends to fulfil utilizing its many full product strains within the dairy sector which may cowl the manufacturing of merchandise from liquid milk to exploit powder to yoghurt, ice cream, cheese and extra.
“The various gaps out there indicate big market alternatives right here for us,” mentioned Dr Yun.
“For example of this hole in addition to one of many methods we’ve overcome the provision chain problem, we launched high-end yoghurt model AMBPOEIAL Greek yogurt within the area – This product will be saved at ambient room temperatures and doesn’t require chilly chain, [reducing the traditional logistical issues].
“That is the way in which Yili hopes to innovate and develop, by tailoring merchandise in keeping with the distinctive traits of native client markets and cultures all through South East Asia [so as to] additionally overcome the distinctive challenges confronted within the markets right here.”
