The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
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With over 60% of new dairy sales expected to be generated in Asia Pacific in the next five years, the region is receiving a great deal of attention from foreign investors. However, the challenging operating environment poses both opportunities as well as pressures for foreign investors. This briefing explores the dairy market and consumer dynamics in the region, and identifies growth opportunities.
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The region will represent over a third of the global market size in 2021, compared with just 28% in 2011. This rapid growth offers significant opportunities for dairy players, as levels of consumption of dairy are still far below Western standards, and signify ample growth opportunities to be exploited.
Despite growing foreign investment in Asia Pacific, 90% of the top 10 dairy players in the region are local, indicating a strong competitive advantage of local players over international. As such, whilst the majority of dairy growth will come from the region, the (disadvantaged) operating environment makes it very difficult to trade in some of the region’s largest markets, such as China and India. Other markets, such as Indonesia, might offer an easier route to market, where, for example, foreign players capture 50% of the top 10 dairy players’ sales, or Vietnam, where this is a third.
Mass urbanisation, reduced activity and poor diets will accelerate the rise of the average Body Mass Index (BMI) in Asia Pacific. Dairy products are well-positioned to offer a nutritious (“natural”) healthy product over many other food types. Also, as snacking will form a greater part of people’s diets, snack-packed dairy products offer a great alternative to products which are high in salt and sugar.
Given the widely publicised food safety scandals over the last few years, companies are now promoting their quality control over production processes more prominently, to help ensure food safety and restore consumer confidence in the industry. Associating dairy products with health and wellness and quality assurance allows for higher margin pricing, as well as differentiation. As such, several multinationals have now changed their corporate vision to reflect just that, including Yili, Nestlé and Huishan. Future innovations in dairy will therefore be centred on a health positioning, and give greater importance to technology which aids in tracking the dairy product from grass to glass.
Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.