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.
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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.

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).

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