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Dairy Ingredients in South East Asia – Performance and Opportunity

16th November 2020

Cormac Nolan, Market Insight Specialist, Bord Bia - The Irish Food Board

Irish ability to continue to successfully win a share of the burgeoning dairy consumption – and therefore import - in South-east Asia will depend on continuing to understand the consumer and providing for their needs.

 

This article will introduce the scale of that import growth and highlight the particular subcategories where Ireland has been achieving notable success.

 

The long term prospects for dairy exports to the South-east Asian region are strong. Demographics and changing consumption habits have made that clear.

 

In the shorter term, despite the significant disruption to consumer behaviour as a result of Covid-19, the South East Asian economies demand for dairy imports has remained robust.

 

Bord Bia analysis of key dairy ingredient volumes into the region has revealed sustained demand and significant growth in some particular ingredients.

 

Low volume, high price ingredients like casein and whey protein isolate have been the ingredients with the highest volume growth - +12% and +23% respectively, on statistics to the end of July.

 

South East Asia - defined as Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand and Vietnam for the purposes of the work - is consuming more dairy and has relatively low dairy self-sufficiency with limited scope for expansion.

 

As such, the region will remain a major importer. And the long term growth is exceptionally large - Rabobank estimates that the annual milk equivalent deficit in just the ASEAN 6 countries will be 19bn liters by 2030, up from 12.9bn in 2020.

 

New Zealand as the major regional producer accounts for nearly a quarter of the total import volume (23%) across all dairy ingredients as of now. All European exports account for 25.7% of that total - and Ireland 2.1% of it.

 

As large numbers of dairy exporters engineer their export growth strategies around these emerging markets, an ability to differentiate in the markets for a small - by global standards - supplier like Ireland is vital.

 

Success in this area can already be seen in the specialised, high value ingredients like casein - where Ireland accounts for 19.8% of all imports into the region.

 

Continued success will be dependent on understanding the changing consumer in the region, and being able to deliver against emerging buyer expectations including on natural nutrition delivered affordably.

 

The Thinking House has invested extensively in primary dairy research in this region looking both at consumer and market realities. To access any of this work relevant to your business, please consult the insight pages of our website.  

 

 

 

 

Sources;

 

Japan Indicator - https://www.bordbia.ie/globalassets/bordbia2020/industry/covid/indicator-reports/toolkits/indicators-toolkit-japan.pdf

 

Rabobank - Dairy Export Boom Beckons in ASEAN-6: With a Push and a Pull

https://research.rabobank.com/far/en/sectors/dairy/dairy-export-boom-beckons-in-ASEAN-6.html