With the dairy market affected by price rises up to 2023, consumers in Asia Pacific, especially in more developed dairy markets, have shifted away from products perceived as premium, like yoghurt and cheese. Future opportunities lie in venturing into emerging markets and growing underserved dairy categories. Brands must consider untapped channels, localised innovations and positioning, and create new occasions and applications to drive dairy consumption in the long term.
This report comes in PPT.
Dairy products experienced relatively slow growth in 2023, following volatility since 2018. The market was hard hit by price rises, as some consumers traded down to more affordable drinking milk and gave up products perceived as premium, such as yoghurt and cheese.
India and Southeast Asia are generally attractive as emerging markets with low per capita consumption of packaged dairy. Some dairy products with an indulgence positioning and refrigeration needs may require innovative formats and entry through untapped channels.
Given that dairy is not a typical feature of Asian diets and cuisines (except for India), adjusting lifestyle habits and integrating with existing cooking habits may prove to be challenging. Localising ingredients and applications for dairy is key.
Brands that gain the trust of consumers for their product quality and understanding of local consumption patterns may reap long-term rewards. Hence, it is important for brands to consider consumption occasions in and out of the home, as well as snacking between meals.
Aside from key category and local market drivers, brands must also consider local regulations, given that emerging Asia is diverse. There is also a rising focus on health and nutrition labelling requirements, trends in functional ingredients and the growing presence of non-animal bases.
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