Asia Pacific is a major region for drinking milk and represents the biggest market by value. While sales are primarily stemming from China, markets with large populations such as India and Indonesia are growing rapidly. Growth is being aided by expansion in cold chain logistics, premiumisation towards natural and additive free drinking milk, entrance of private equity players, innovation towards lactose-free milk types and rising importance of hygienic packaged milk as a daily staple.
Being the two most populous countries in the world, China and India account for some 52% and 19% of drinking milk sales, respectively, in the region. In China, natural and free from shelf stable milk brands are becoming popular, as they are natural and free from additives. In India, an increasing shift from unpackaged to more hygienic packaged drinking milks is the main driver for the large volume of sales.
Negative perceptions of drinking milk still need to be overcome. Lactose intolerance, scandals involving chemicals such as melamine in China, and unhealthy additives are hampering growth. Manufacturing processes are also not fully audited by independent international certification bodies for quality assurance, which hampers brand’s efforts in building consumer trust. Lactose free variants of cow’s milk are still being trialled across Asia Pacific countries, with much room for improvement towards addressing lactose intolerance as a stumbling block for drinking milk originating from cows.
In India, large drinking milk cooperatives are expanding further through franchising and private equity players are making inroads, injecting more capital and expanding their reach in a lucrative market. Vietnam is benefiting from rising disposable incomes, heavy investments in drinking milk innovation, and the entrance of dairy multinationals which can leverage their extensive overseas experience to gain traction quickly in a new market.
Innovation efforts are strong in Asia Pacific. Lactose free variants are employing enzymes to digest the lactose or A2 Beta Casein proteins instead of the common A1 Beta Caesin which causes lactose intolerance. Drinking milk products are also increasing innovated to target specific health needs, age groups and lifestyles. These innovations have the common thread of convenient packaging, natural and free from labelling.
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