Vietnam is projected to be the fastest growing dairy market in the ASEAN region as it has a large and rapidly growing population of almost 100 million.
The dairy segment has expanded with more portfolio targeting to consumers of all age groups. Dairy products are no longer consumed by children, as dairy companies are also reaching out to the elderly with milk formulation to enhance their bone strength as well as for nutrition during the ageing process. Meanwhile, the middle age group consume milk products for energy boost or meal replacement after a busy day at the office, while sportsman and athletes look out for dairy formulations that can give them faster recovery after a strenuous workout.
In Vietnam, a growing number of international dairy players are penetrating into the market as a springboard to reach out to the wider Indo-China region, while domestic players like Vinamilk has invested millions on R&D to strengthen their market share in a rapidly growing market.
Recent entrants include Korea’s Orion Food Vina (OFV) which formed partnership with Dutch Mill and launched 2 new dairy brands, Choco IQ milk and ProYo drinking yogurt in August this year. OFV also owns the world-renown ChocoPie and has deep pockets to see it grows further in the market. Another major player, Morinaga Milk from Japan entered Vietnam in 2022 with the acquisition of local firm, Elovi Vietnam JSC. Morinaga plans to boost its overseas sales outside Japan to more than 15% by 2029, and Vietnam is one of its target market.
Apart from players with domestic presence, Vietnam also witnessed double-digit growth in import of milk products. A report published by Research & Markets showed that the import of milk and dairy products into Vietnam reached US$12 billion in 2021 and is projected to grow at a CAGR of 12% until 2030. There is tremendous room for expansion as per capita consumption of milk in the country is still low compared to its more developed neighbours like Singapore and Malaysia. Import will continue to play an important role as domestic fresh milk production can only meet about 45% of the domestic demand.
Despite the entry of foreign players, domestic players still dominate the industry with 65% of the market share held by Vinamilk, Vinasoy, TH Group and Nutifood, according to Euromonitor data. Foreign players like FrieslandCampina and Nestle hold the remainder.
The leader in the industry, Vinamilk which has 40% share of the market, continues to invest in R&D and expand cooperation with leading nutrition companies like Chr. Hansen, DSM, Beneo, AKK to develop products of international standards. Vinamilk has also earned its reputation as being the country’s most valuable food brand and the 6th largest dairy brand globally.
