Yili launches phase 1 of its new Indonesia Dairy Production Base

Dairy producer the Yili Group has celebrated the official launch of the first phase of the Yili Indonesia Dairy Production Base. When the second phase is completed, the production base will become the country's largest ice cream factory with a daily production capacity of 4 million ice cream products. 

Source: Yili Group. The Yili Indonesia Dairy Production Base.

 

The facility was established due to the popularity of Joyday ice cream, a brand that has rapidly expanded to 260 local cities in 26 provinces, covering nearly all of Indonesia, since its entry into the market in 2018. 

"Local consumers' clear preference for and trust in our products has reinforced Yili's confidence about our long-term investment and development in Indonesia," said Pan Gang, the Chairman and President of Yili Group.

"Yili is always dedicated to following the highest standards to drive quality, sustainable development over the long term and establishing localised operations that benefit the communities where we operate. This ensures that we can better serve local consumers and make deep contributions to socioeconomic development throughout the region." 

The Indonesia-based hub aims to speed up Joyday's product manufacturing, R&D and marketing efforts, with more new products to come.

As Yili's first self-built plant in Southeast Asia, Yili Indonesia Dairy has adopted cutting-edge technology and equipment, including the Internet of Things and big data analytics, to build an innovative and smart factory. 

The production base integrates advanced digital technologies throughout its entire production chain. Robotics solutions are introduced to provide automated packing, palletising, and warehousing. The construction of infrastructure and buildings has been undertaken in line with Yili Group's global quality management standards. 

To date, the factory has already passed the ISO22000, Halal, and BPOM certifications and been rated A grade by LPPOM MUI, the largest food and drug certification agency in Indonesia. 

As part of its efforts to build a sustainable and environmentally friendly production facility, Yili Indonesia Dairy has built a wastewater treatment system with a daily treatment capacity of 2,800 tons. Reclaimed water is then used for the irrigation of plants in the factory. 

To ensure high levels of visibility and transparency, the site will be open to the public whenever the factory is in full operation, and consumers can watch the whole production process as it unfolds. 

While deepening its presence in global markets, Yili follows the principle of "global mindsets and local operations", with a focus on building highly localised factories that benefit local communities. Today, Yili Indonesia Dairy has a total of 383 employees, with local employees accounting for 95% of the workforce. The project is expected to create more than 5,000 new jobs for local communities, directly and indirectly. 

Yili Indonesia Dairy is also actively pursuing further opportunities for cooperation with local partners. To date, the company has already established cooperative relationships with more than 90 suppliers in Indonesia. Moving forward, its partnerships will expand to local distributors with 200,000 sales outlets. 

Yili is further dedicated to promoting the highly rated Indonesian flavors to global consumers through its worldwide marketing channels. 

The completion of Yili Indonesia Dairy sets up another key pillar for Yili's development in the Indonesian and the broader Southeast Asian markets. Together with the company's Thailand-based ice cream production base, Yili's "Southeast Asian dual centres" and Southeast Asia Innovation Center are expected to accelerate product manufacturing and R&D in the region. 

As a platform designed to facilitate cooperation on innovation with universities and R&D institutions throughout the region, Yili Southeast Asia Innovation Center will also work together closely with Yili's innovation centres across China, Japan, Europe and Oceania, with the aim of rolling out more localised innovation solutions that fulfill consumer needs.

Qatar invests in new dairy industry

Qatar Airways Cargo, the cargo division of Qatar’s national carrier, has transported the country’s first two shipments of 330 Holstein cows from Europe on a Qatar Airways Cargo Boeing 777 freighter. These initial shipments are part of a 4,000-head herd that marks the launch of a completely new industry for Qatar.

Ulrich Ogiermann, Qatar Airways Chief Officer Cargo said, “It is with utmost pride that we were given the opportunity to offer our expertise and services to support this momentous project. We are truly a part of history, helping launch the country’s newest industry, producing dairy products to meet local demand. The cattle charters involve a great deal of skill and coordination to ensure the flight from the points of origin to Doha was smooth and safe.

“With our extensive freighter fleet and state-of-the-art cargo facility at our Doha hub, we were able to meet our client Baladna Farm’s requirements with tailormade solutions to transport the cattle from various continents swiftly into Doha. Our dedicated team at Qatar Airways Cargo is well-trained and our QR Live product is fully-compliant with IATA’s Live Animal Regulations to ensure safe and comfortable air transportation of live animals.”

Source: Qatar Airways. Cows feeding.

The cargo carrier has been appointed to charter more than 20 cattle shipments from Europe, the US and Australia in the next few weeks. Upon arrival at Hamad International Airport (HIA), the cattle are carefully and efficiently transferred to Baladna Farm, a major livestock farm in Qatar.

Power International Holding Chairman Moutaz Al Khayyat said: “We are proud to expand the dairy industry in the State of Qatar, and are thankful to Qatar Airways Cargo for the expedient, safe and secure transportation of the cattle that have now safely arrived at their new home, Baladna Farm. With the arrival of the dairy cows, we aim to meet 30-35% of the imported milk demand in the country within two months.”

Baladna is a subsidiary of Power International Holding, a diversified Qatari company. Baladna has built special cowsheds with a temperature control system to ensure a comfortable environment for the cattle. Baladna Farm, built over 700,000 sq m, includes 40,000 Awassi sheep able to withstand high temperature and produce high-quality milk. The farm also houses 5,000 goats and an animal feed mill yielding 100 tonnes per day.

Qatar Airways Cargo recently attracted attention for undertaking a massive airlift of food and grocery items when a blockade was initiated by neighbouring countries on 5 June. This undertaking, arranged entirely by Qatar Airways Cargo, lasted several weeks and used its own fleet, as well as other leased aircraft. The cargo airline continues to connect its global customers’ businesses to over 150 destinations on 200 passenger and freighter aircraft.

Ranked the world’s third-largest international air cargo carrier, Qatar Airways Cargo has made significant investments in its fleet, network, its hub and products in recent years as part of its strategy and commitment to improve and enhance its product offering for the benefit of customers globally. The cargo carrier has performed charters for a variety of cargo including such as horses, cattle, pharmaceuticals, oil and gas products, art, concerts and exhibitions, machinery, mining and humanitarian relief goods.

Milk and milk beverages a growth market for Malaysia

Malaysian consumers continue to sustain demand for milk and milk-based beverages as they contain high levels of calcium and so help to strengthen bones and keep joints healthy, says Euromonitor. 

According to the research firm, new players such as Hybrid Allied Dairy Company and Calpis entered the drinking milk category and helped drive sales of drinking milk products in Malaysia last year. In addition, Holstein Milk Company shared plans to expand its drinking milk production line in Malaysia in 2016.

Dutch Lady Milk Industries led sales of drinking milk products with a 23% retail value share in 2016 due to Dutch Lady Milky in April 2016. Dutch Lady Milky was successful due to its use of seven cartoon characters and its availability in three variants which gained the attention of children in particular. In addition, the company improved its packaging of Dutch Lady PureFarm fresh milk from brick liquid cartons to gable-top liquid cartons for its 1-litre pack size.

Consumers are expected to continue to demand drinking milk products for their nutrients and because popular brands are priced affordably. Euromonitor expects frequent discounting by leading brands such as Dutch Lady, Yeo’s, Goodday and F&N Magnolia to continue.
Interested?

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Low expectations for cheese market in Malaysia

The cheese market in Malaysia remained lacklustre in 2016. Consultancy Euromonitor says many imported brands focus only on high-end supermarkets as distribution channels, such as Cold Storage, Sam Groceria and Presto Grocers. On the other hand, dual-breadwinner families prefer to dine out more than cook at home, which makes cheese a rarity in homes.

Mondelez is the leading player in cheese for Malaysia in 2016, accounting for a 46% retail value share. The company offers a wide range of brands including Kraft Singles, Philadelphia, Kraft Cheese Spread and Kraft. These brands are widely distributed, in particularly through hypermarkets and supermarkets, and have many loyal consumers due to their affordable prices, quality and flavour.

Euromonitor does not see cheese taking off in Malaysia as consumers cook at home relatively rarely, making it unlikely to become a common recipe ingredient. The research firm also notes that domestic distributors are not educating consumers on incorporating cheese into their meals.  

Interested?

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Kazakhstan consumers buying yoghurt, sour milk products for health

Yoghurt and sour milk products, which is a growing dairy category in Kazakhstan, has seen interest from health-conscious consumers who believe the products are healthy and aid the immune system and digestion. The demand has spurred manufacturers to constantly update product lines with new tastes and health-orientated additives, says Euromonitor in a report on the dairy market in Kazakhstan.

Euromonitor identified Wimm-Bill-Dann Produkty Pitania as the leading company in 2016 with a 21% share of retail value sales for yoghurt and sour milk products. "This international manufacturer offered a wide range of yoghurt and sour milk products in Kazakhstan. Its leadership in retail value sales terms was due to comparatively high unit prices and strong marketing campaign," Euromonitor stated in an introduction to the report.

According to Euromonitor, Wimm-Bill-Dann Produkty Pitania also topped the 'other' dairy category, with a 17% share of retail value sales. The company offers brands such as Chudo, Domik v Derevne and Vesely Molochnik in chilled and shelf stable desserts, chilled snacks, cream, fromage frais and quark.

The increasing popularity of non-traditional products, such as chilled and shelf stable desserts, chilled snacks and coffee whiteners, will stimulate volume and value growth. Euromonitor says there will also strong demand for cream, condensed milk, fromage frais and quark*, as they include traditional products that remain popular among Kazakhstanis. Cream is consumed with tea for instance, while smetana (sour cream) is mainly taken with traditional hot meals like meat as well as berry dumplings and pancakes.

Interested?

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*Quark is a dairy product made by warming soured milk and then straining it. The curds are spoonable and are said to have a mild flavour that goes well with both sweet and savoury dishes.

Milk demand to grow despite saturated market in Kazakhstan

Milk is an integral part of the nutrition intake of Kazakhstanis, especially in tea. As the population increases, the demand for milk is set to grow from 2016 to 2021, says Euromonitor. 

In 2016, manufacturers competed by offering high-quality products at affordable prices, relying on the use of high-quality raw materials and modernised equipment as well as on improving their production processes to do so. 

Agroprodukt Asia remained the leading player in 2016 with an 18% share of retail value sales. The company offers a wide range of drinking milk products, such as Odari, Zorkin Lug, Mumunya, Lyubimoe, Beloye, Moloko, Svezhee Moloko and Nashe.

Interested?

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Cheese still a luxury item in Kazakhstan

In 2016, the key issues in the cheese industry in Kazakhstan were product quality and the presence of counterfeit products, says Euromonitor.

Relatively few have tasted cheese in Kazakhstan, the research firm said. The highest consumption of cheese was observed in large urban areas like Astana and Almaty, where consumers tend to have the highest purchasing power. Unscrupulous manufacturers have offered products that resemble cheese but were made of vegetable oil, which passed muster with uninformed local consumers. 

Gadyachsyr led the pack in 2016 with a 14% share of retail value sales. Ukrainian-manufactured cheeses are preferred however because of their perceived better taste and quality.

Over the forecast period, Kazakhstan is expected to see a more stable economic situation and increased purchasing power, so expenditure on cheese is expected to grow. 

Interested?

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Milk-Pro is the dairy king in Azerbaijan

Milk-Pro tops every dairy category in Azerbaijan in 2016, says research firm Euromonitor. The company had 13% of value sales for cheese, 21% of the value share for its milk brand Sevimli Dad, and 17% value share for traditional sour milk products such as ayran and dovga.

The trend towards savoury milk flavours continued in Azerbaijan in 2016. Key local players expanded their ranges in order to become more competitive. Consumers demanded natural/organic ingredients, low fat/fat-free, nutrition and protein-rich milk products, as well as full-fat milk drinks.

Euromonitor forecasts that the milk market will grow through to 2021 and become increasingly saturated with brands labelled as non/reduced-fat, nutritive, organic/natural and others, in response to the spread of the health and wellness trend in Azerbaijan.

Consumption of yoghurt and sour milk products remains stable as well due to the same health and wellness trends and the strong belief that these products extend life. Over the forecast period (2016 to 2021) the demand will shift from unpackaged to packaged yoghurt and sour milk products, Euromonitor said. leading to volume growth. Competition is also expected to intensify, which could further diversify the market.

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Doogh market contracts in 2016

Yoghurt is set to remain an essential part of Iranian cuisine and be consumed by people of all ages and all socioeconomic levels. The product will likely continue to be popular for breakfast and as a complement to Iranian dishes, says Euromonitor in a report on the dairy market in the country. In addition, growth will be driven by the use of sour milk drinks in place of carbonated drinks by Iranian adults, as well as an overall consumption of doogh*, a drink often served with an Iranian meal. 

In 2016 retail volume sales of sour milk products such as doogh declined by 1%, continuing the downward trend of the last three years of the review period (2011 to 2016) and demonstrating that the category has reached its maximum potential, says Euromonitor. 

Plain yoghurt, on the other hand, grew by 1% in retail volume terms, an improvement over the negative retail volume CAGR of 3% recorded over the review period. This is due to the introduction of more sophisticated products with health and wellness adding value, Euromonitor said. The consumer tendency to switch from unpackaged to packaged yoghurt was another important reason for volume growth in 2016, the research firm added.

Kalleh Dairy maintained its leadership in yoghurt and sour milk drinks in Iran in 2016 with a 21% retail value share in last year. The company boasts a wide product portfolio of yoghurt, including spoonable and fruited yoghurt, flavoured, full fat and low fat products. Its probiotic yoghurt has attracted consumers with health concerns. Kalleh Dairy products are widely available throughout the country and enjoy loyalty from Iranians. Attractive packaging and a reputation as a manufacturer of quality products have also added to its popularity.

Overall, yoghurt and sour milk drinks is expected to record a 2% value CAGR at constant 2016 prices over the forecast period (2016 to 2021), compared to the negative constant value CAGR of 5% witnessed over the review period.

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*A beverage made with yoghurt and salted water.

Milk and yoghurt based drinks both popular in Indonesia

Heavy advertising in mass media, more television programmes as well as magazine articles focusing on health issues have led to rising awareness among Indonesian consumers of the benefits of drinking milk over the period 2011 to 2016, says Euromonitor.

Ultrajaya Milk Industry & Trading Company remains the leading player in drinking milk products with a 23% value share in 2016. Its flagship brand is called Ultra. The company's performance in flavoured milk drinks comes as a result of heavy marketing and improved distribution, Euromonitor said. 

Although already popular for its shelf-stable milk, Ultrajaya Milk Industry & Trading is still educating Indonesian consumers about the benefits of consuming liquid milk rather than powdered or condensed milk. In 2016, the company held many below-the-line event promotions, such as Tour de farm, centring around visits to the Ultrajaya farm in Bandung. In May 2016, it also held Preschool Roadshow Ultra Mimi Carafun in the city of Medan. 

Source: Ultra Mimi website. Pictures from an Ultra Mimi Carafun Roadshow held in February 2016.

Euromonitor notes that Indonesian milk consumption per capita is lower than in other emerging countries, so there is still room to grow. 

The yoghurt market is also growing, especially among middle- and high-income consumers, particularly women, Euromonitor said, as it isbeing aggressively promoted in the mass media as offering nutritional benefits and aiding digestion. Female consumers are increasing their consumption of such products as they believe that yoghurt can help them maintain a slim figure, improve their skin and slow the ageing process, the research firm notes. Sour milk drinks, mainly targeted at children, are preferred by some parents compared to flavoured milk drinks, as they typically contain good bacteria for digestion.

In 2016, Yakult Indonesia Persada PT with dominated the yoghurt and sour milk market with its Yakult drinking yoghurt, which had a 69% value share, Euromonitor said. Yakult’s value share gain in 2016 comes down to improved distribution, via both retail channels and Yakult Ladies - Yakult employees who deliver Yakult drinks directly to customers in Indonesia. Apart from the growing number of Yakult Ladies promoting the brand not only in residential areas but also in schools, Yakult Indonesia Persada has also benefited from the rapid expansion of modern retailers in Indonesia, especially convenience stores, hypermarkets and supermarkets.

Yoghurt and sour milk products is likely to continue to benefit from growing health awareness, particularly among middle- to upper-income consumers, Euromonitor predicts. The increasing number of health-conscious consumers is expected to result in the expansion of yoghurt and sour milk products’ consumer base over the forecast period. Manufacturers are likely to continue to invest heavily in educating consumers about the health benefits of yoghurt and sour milk products.

Interested?

Read the Euromonitor report on Dairy in Indonesia

Cheese becomes popular in Indonesia

More Indonesian families, particularly in the big cities, are expected to start using cheese as a main ingredient in their meals. According to research firm Euromonitor, more consumers have started to prepare Western foods which use cheese as an ingredient by themselves at home. These include pizzas, pasta dishes, cakes, pastries and toast. Cheese has become very popular to serve with white bread as a substitute for chocolate sprinkles, jam or honey.

An increasing number of foodservice outlets and rising number of new menus using cheese by existing foodservice outlets may also prompt faster volume growth of food-service sales of cheese in the forecast period, Euromonitor said.

Kraft was named as the leading cheese brand in Indonesia in 2016, with Kraft Ultrajaya Indonesia PT commanding a 61% share of value sales. The company’s dominant position is attributed to its early entry into the Indonesian cheese market, a wide variety of other processed cheese products and aggressive marketing, using both television advertisements and below-the-line activities.

Interested?

Read the executive summary for the Euromonitor Dairy in Indonesia report, dated December 2016

Read the WorkSmart Asia blog post about popular brands in Indonesia

Azerbaijan cheese lovers going domestic in 2016

Currency devaluation led to a significant price jump for imported cheese in Azerbaijan in 2016, resulting in consumers moving to value-for-money domestic brands instead, says Euromonitor in its Dairy in Azerbaijan report.

Milk-Pro MMC led in the cheese category in 2016, accounting for 13% of value sales.

Over the forecast period (2016 to 2021) consumers of cheese are expected to switch from unpackaged to packaged products. The share of imported premium cheese is expected to grow, with interest in new flavours.
Interested?

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Cheese options grew for Iran in 2016

More sophisticated products were offered to Irani consumers in 2016, contributing significantly to growth in the cheese category, says Euromonitor in its Dairy in Iran report. One type of cheese had previously been available, a soft cheese called Iranian UF cheese; key manufacturers diversified and offered cream cheese, processed cheese and other options, which helped the whole category to grow at a healthy rate.

Pegah Dairy was the lead manufacturer in cheese in 2016 with a 29% share of retail value sales, Euromonitor said. The state-owned company has several factories across the country, including in Pegah Khorasan, Pegah Gilan and other areas, which supply their territories with fresh dairy products. Pegah Dairy maintains the popular Pegah Shabnam brand of cheese, a simple soft cheese packaged in saltwater. The company has a very strong distribution network which guarantees its presence even in remote areas and was able to strengthen its position in 2016 with strong marketing campaigns in 2015 and 2016.

According to Euromonitor, strong demand from Iranians for packaged cheese will likely continue to boost retail sales of cheese over the forecast period. As in the review period, sales are set to be driven by the fact that cheese is widely consumed in Iran and general demand for sophisticated processed cheese is still growing. Overall, sales are expected to record steady annual rises with CAGRs of 1% in retail volume and 2% in value terms at constant 2016 prices over the forecast period (2016 to 2021), both of which are improvements over the equivalent performances of the review period (2011 to 2016).

In contrast, drinking milk product players have been consolidating. Demand has continued to decline, especially in shelf-stable category, as many young shoppers consider this type of milk unhealthy option and believe that it contains preservatives.

Pegah Dairy is also the leader in drinking milk products, with a retail value share of 21% in 2016, slightly lower than in 2015. Pegah Dairy has the most productive production line amongst manufacturers in the popular fresh milk category. Its distribution network has also helped its lead position. It also has one of the most visible advertising campaigns in stores.

PROSPECTS

Sales of drinking milk products as a whole are expected to grow due to increased awareness and improvements in the Iranian economy. Overall, drinking milk products is expected to register a value CAGR of 9% at constant 2016 prices over the forecast period (2016 to 2021), some five percentage points higher than the equivalent figure from the review period (2011 to 2016).

Interested?

Buy the Euromonitor Dairy in Iran report