December 10, 2024
(press release)
–
The dairy market in Asia Pacific is underdeveloped relative to other regions, with huge potential for further growth. Asians consume drinking milk products as their primary source of dairy, at 58% of dairy retail value sales in 2024. Other types of dairy lack prominence in daily diets. Even so, an average Asian’s consumption of drinking milk products is much lower in volume terms than a person’s in other regions – only 12.8 litres per capita (through retail channels) versus 42.3 litres per capita in Western Europe and 36.6 litres per capita for North America. Despite having much room to grow, there are short-term challenges, with retail volume and value growth in Asia Pacific low from 2023 to 2024. To win over value-seeking Asian consumers in the face of economic uncertainty, brands must seek ways to introduce relevant products that complement local cuisines and help to enhance lifestyles. Consumers are price-sensitive, shown in the movement towards lower-priced private label products and shelf-stable options (which are seen as more cost-effective). However, even in a market like Japan where private label is easily found, brands like Meiji Oishii Gyunyu continue to succeed. This full-fat fresh milk enjoys the reputation of having a strong nutrition profile and being good quality. Consumers are not strictly trading down favouring affordability, but are often making deliberate selections due to value-added product attributes and needs. Similarly, in yoghurt, market leaders are ensuring their products fit with consumers’ health preferences by being more mindful of promoting their functional benefits. This is especially true for drinking yoghurt, which is largely known for flavour, and is now competing with alternatives perceived as more nutritious. In 2019, drinking yoghurt comprised 67% of the yoghurt market in Asia Pacific in retail value sales terms, but in 2029 this percentage is forecast to drop to 55% in favour of plain (spoonable) yoghurt Source: Euromonitor International Hy, the leading player in South Korea’s yoghurt market, uses allulose to appeal to consumers seeking reduced sugar content, while Yili, China’s market leader, has taken innovation a step further with its AMX Living Probiotics product – said to retain the efficacy of its active ingredient for digestive health without needing refrigeration. Encourage trial to trigger interest Dairy consumption varies across the region, necessitating localised strategies to improve consumption. Across yoghurt, cheese and drinking milk products, the Japanese market is most mature, while Malaysia and Indonesia have among the lowest consumption rates across all three dairy products. Examples of localised strategies include Japan’s Morinaga Aloe yoghurt focusing on indulgence, improving its recipe to have three times the amount of aloe pieces per pack compared to its previous version. Meanwhile, Oatside launched single servings of 200ml, dubbed as “mini oat milk”, to encourage trial in Southeast Asian markets, not only to encourage consumers to drink a specified amount (as opposed to spreading out consumption of a 1-litre carton) but also to increase unit price growth. Unique applications to elevate recipes Asian consumers generally lack experience with cooking or including dairy products that complement their local cuisines, with a lack of familiarity in working with unprocessed hard and soft cheese. Processed cheese dominates the overall cheese market, with a 52% share in retail value terms in 2024, largely thanks to sliced cheese Source: Euromonitor International This limits consumption occasions to pairing with bread/burgers/sandwiches and breakfast or rare meal options. However, brands have recently launched a variety of new products illustrating how they apply to various eating and cooking occasions, encouraging the penetration of cheese in the Asian region. Japan’s Megmilk Snow Brand’s Torochi is a squeezable cheese product in a pouch meant for cooking, allowing consumers to enjoy the unique taste and texture with their meals. The same brand has also introduced string cheese, while Kiri’s cube cheese is positioned for snacking and a dessert complement. Avoid innovation pitfalls for short-term wins Looking ahead, there is a need for further innovation in other Asian markets, to combat the slow growth of dairy predicted for the region. In Southeast Asia, The Laughing Cow launched Cheez Dippers in 2024 in unique Blueberry and Strawberry flavours. Whilst this does help to inject some variety and flavour to snacking occasions and may help to pique interest for the short term, it is not likely to enhance Asian consumers’ experience with the taste and texture of cheese, which will result in an insignificant impact on the market in the long run. Brands must leverage key health insights and make relevant nutrition claims to assure consumers of the value their products bring. Making consumption easier and more complementary to local cuisines will also drive value growth. Learn more about Asia Pacific’s dairy market and its context globally by reading Euromonitor’s report, World Market for Dairy Products and Alternatives.
Use wellness attributes to showcase value
* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.
