Looking At Asia And The Dairy Industry Featured

<img src=/e_icon2.jpg> Looking At Asia And The Dairy Industry Day Donaldson

Piet Hilarides, chief operating officer, Consumer Products Asia, FrieslandCampina, gives an overview of the dairy industry in Asia and what manufacturers can capitalise on and how they can meet growing consumer demand for dairy products.

At present, how does the dairy industry in Asia look like?

Asia has the highest growth in demand for milk and dairy products in the world. Comparing country to country, the United Nations’ Food and Agricultural Organisation (FAO) data shows that per capita consumption can range quite significantly. It is estimated that demand for milk and milk products in Asia will reach some 320 million tonnes by 2021. In the last 30 years, consumption has doubled due to a rapidly growing population, an emerging middle consumer class, further compounded by urbanisation and the growing need for health and wellness solutions in Asian societies.


                                                                                       Greg O'Beirne
Milk churns being carried on bikes in Kolkata, India.

On one end of the range, you have countries like Cambodia and Laos who have a per capita consumption of between two to five kilogrammes; Indonesia consumes eight kilogrammes per capita; and Vietnam and the Philippines average 14 to 15 kilogrammes per capita. On the other end, you have between 30 to 50 kilogrammes per capita consumption rates in places like Malaysia and Thailand.

Cultural factors matter too. In Pakistan and India, where milk consumption is very much part of local traditions, there will be a continuing trend of increased milk consumption in these countries.

While the national consumption patterns may be different, the one constant is that in Asia, consumption is going to continue to rise.

For manufacturers, what can they possibly capitalise on?

While Asia will continue to dominate the global dairy industry for some time to come, some of the largest societies in the region are ageing rapidly. We are seeing a growing percentage of the population who are above the age of 65.

Taking China as an example, the number of working adults who can support an elderly person will decrease quite significantly. Projections are that in 2020, China will have six working age adults per elderly person. That will drop to 2.6 working adults by 2050.

What this means in real terms is that working adults will have to shoulder a heavier burden as there will be less of them to help look after seniors. This means there will be fundamental changes in the way societies and businesses operate as there will be a need for greater support for the elderly.

Companies like FrieslandCampina, whose business is to provide daily nutrition to consumers around the world, continually innovate and renovate products in order to better tailor and cater to the needs of consumers.

For example, we launched Optimel in Hong Kong last year, which was developed in collaboration with nutrition experts to specifically cater to what we found to be lacking, from a nutritional standpoint, in middle-aged and elderly Hong Kongers. A product like Optimel can help to bridge the gap, and ensure that our seniors lead healthy lives.

Are there any points to note for manufacturers when exporting dairy products into Asia?


Couleur

From an operational front, understanding and complying with the diverse regulatory requirements in the respective local markets is critical in ensuring that our products get to market and consumers in a timely fashion.

The proposal to harmonise industry regulations would be of particular relevance to businesses like ours, as are ASEAN’s efforts in progressing towards a single market for goods and services. This would streamline a lot of the customs and processes that currently exist, and this would temper the way we do business on a day to day basis.

In addition, we need to keep watch on the progress of the Trans Pacific Partnership which will significantly impact world economic trade.

What can dairy manufacturers or organisations do to help meet the increasing demand for dairy products or deficiencies in dairy intake in Asia?

    1. Food Security

The food and agriculture, and certainly the dairy industry, is confronted with the pressing issue of food and nutrition security globally. There is a challenge to meet the demands and nutritional needs of 10 billion people in 30 years’ time.

While commitments have been made to increase the supply of milk and dairy, these are constrained by factors like farming skills, land, the lack of infrastructure in rural areas and small herd sizes, especially when the majority of our supply is provided by smallholder farmers in rural communities.

To meet demands and build a sustainable sector, FrieslandCampina recognises that we have a role in helping to build capacity for the dairy industry. Thus, we have developed the Dairy Development Programme, which seeks to work with farmers and governments across Asia to share best practices and expertise such that we are able to improve the quantity and quality of milk produced by local farmers.

The benefits of this are clear. Through this programme, we are able to not only improve product quantity and quality but also the livelihoods of local farmers—and future generations of farmers to come—and contribute to the development of the local economy.

The programme has already supported over 100,000 dairy farmers directly and indirectly in Asia and beyond, via knowledge sharing and training, as well as helping to develop milk distribution systems. Helping local farmers build their ability is critical, particularly when agriculture is one of the main pillars for so many Asian economies.

    2. Address nutritional deficiencies

Tetra Pak

Within the context of rising non-communicable diseases, obesity and malnutrition, the other challenge is addressing the nutritional deficiencies amongst consumers in a sufficient manner.

Knowing what our consumers require is the most effective way of addressing demand. The company launched the South East Asia Nutrition Survey (SEANUTS) to study the nutritional needs of our consumers in the region.

The survey, which involved about 16,000 children (between ages 4-14), found that there is a significant dual burden of malnutrition. In addition to a trend of rising obesity, children were also found to be lacking in micronutrients such as Vitamin D (despite the abundance of sunlight here). This paved the way for the development of products that specifically addressed the needs of children.

    3. Offer the right products.

Considering the consumers of Asia, besides addressing nutrition deficiencies, manufacturers also need to offer the right products. At FrieslandCampina, not only do we encourage good nutritional intake, we also advocate physical activity. Our Drink.Move.BeStrong initiative has sought to share the importance of both good nutrition and adequate physical activity with children across Southeast Asia.

To truly effect change, however, we strongly believe that a concerted, multi-stakeholder approach is needed to tackle these issues. These include private-public partnerships. FrieslandCampina has been working and aligning closely with multiple stakeholders end-to-end to ensure that we are able to build an ecosystem for action and create systemic change now that can benefit future generations to come.

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  • Last modified on Wednesday, 15 February 2017 17:21
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