Market analyst Research and Markets has found that factors such as rising demand due to an increasing affinity for Western cuisine have bolstered Vietnam’s dairy market—traditionally one of the lowest per-capita milk consumers in Southeast Asia. This in turn has brought heavy investment to the segment.
With demand outstripping supply, milk production of 456,400 tonnes in 2013 met just 28% of the market. While domestic supply has grown by 26.6% annually from 2001-2014, and reached 549,500 tones in 2014, such quantities are still not sufficient to meet the market’s needs.
Low cattle numbers mean that Vietnam is heavily reliant on milk imports. In 2013, the market for imported milk products was valued at US$1.1bn, an increase of 130% over the previous year. This figure is expected to reach US$3.6 billion by 2045.
Now exporting dairy products to more than 29 foreign markets, the country’s dairy farms have been ramping up a modernisation programme, and the total milk cow herd was expected to have reached 240,000 by the end of last year.
Vietnam now plans to meet 60% of domestic demand for fresh milk by 2045, based on a projected population of roughly 113m. To meet this target, Research and Markets believes the country needs to develop a herd capable of producing 5.65m tonnes of milk annually.