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Bord Bia

Southeast Asian foodservice demand for dairy will continue to be a source of growth in coming years 

22nd March 2021

Cormac Nolan, Insight Specialist, Bord Bia

SouthEAST aSIA fOODSERVICE sOURCE.PNG

Dairy ingredients have been the driver of growth in exports to Southeast Asia in recent years. Recently completed Bord Bia research set out how the foodservice channel will continue to be a key driver of that in critical markets in this region.

 

The research examined the market realities across three very different countries in the region; Japan, Malaysia and Indonesia. All three are importers of Irish dairy ingredients into their foodservice channel, but the scale, sophistication and breadth of opportunity in those markets varies widely.

 

The pandemic disrupted foodservice in the countries of research over 2020, as it did everywhere else - but some clarity and opportunity could still be illuminated.

 

Japan is by far the largest and most sophisticated of these markets. It’s dairy ingredient import in 2020 was more than 370,000 mt. While not in major growth, this is the market where buyers are most receptive to the Irish industries sustainability and grass-fed credentials. Irish dairy, alongside other European exporters, is becoming slightly more competitive in the market as the JEEPA agreements comes into force.

 

Malaysia is the second largest of these markets in terms of volume of dairy ingredient import and in market sophistication. While the government has made some moves to increase domestic supply, this is and will remain for the foreseeable future a market with a significant dairy deficit. While Irish dairy exports to Malaysia have grown in recent years, relatively little of that export is destined for the foodservice channel.

 

The bakery channel and pizza restaurants offer some opportunity, but the pizza chains often have a global or regional sourcing approach.

 

Vietnam is a much poorer country than Malaysia, and its foodservice channel is by some distance the least sophisticated of the three countries studied. The growth potential of this market is enormous however. The population is approaching 100m, and while the government has policies to attempt to increase domestic dairy supply it will remain a dairy importer.

 

It’s foodservice and bakery sectors are nascent but with high potential for growth. Irish exports have heretofore been concentrated in SMP. While Vietnam has a strong relationship with New Zealand, the market access terms for EU suppliers will reach parity with the Trans-Pacific Partnership tariffs in the next 3-4 years - presenting an opportunity to challenge. 

 

If you are a diary client company of Bord Bia’s and would like to be taken through this research in detail and examine its implications for your business, please get in contact at thethinkinghouse@bordbia.ie