The two main products behind the strong growth of the industry are powdered milk and liquid milk, accounting for nearly 75% of the value share. Customers consumed over 1,333,400 liters in 2017, up 6.6% compared to 2016. Consumption of powdered milk totaled 127,400 tons, up 10.4% over 2016.
The dairy market in 2020 is expected to double its size, reaching US$ 8.2 billion.
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The current domestic raw milk production has only been able to fulfill 20-30% of consumption demand, making this part of the dairy industry’s supply chain attractive for foreign producers who are looking to export to Vietnam or invest in raw milk production.
As domestic production of both raw milk (raw materials) and dairy products (finished goods) has not been able to fulfill the consumption demand of the growing population, imported dairy products have been growing steadily over the last 10 years at an annual rate of 14.8%, according to the General Statistics Office.
Vietnam’s milk and dairy imports in 2017 reached US$868 million, increasing 1.9% year-on-year. It is expected that in 2018, the market value of Vietnam’s dairy market will grow by 9%.
The target for Vietnam’s dairy exports by 2020 is set at a modest number of US$120 million–US$130 million per year, said Tran Quang Trung, Chairman of Vietnam Diary Association, referring to the master plan to develop Vietnam’s dairy processing industry up to 2020, and even up to 2025.
However, this value has gone up to US$300 million in 2017 with yogurt and sour drinks the most exported dairy products to markets such as the Middle East, Myanmar and Cambodia, which is partly thanks to Vietnamese dairy companies’ efforts in investing to expand their production capacity.
The dairy market in 2020 is expected to double its size, reaching US$ 8.2 billion as Vietnam’s population is projected to increase by 5 million people and personal income and dairy consumption are foreseen to increase at 15% and 7% compounded annual growth rate, respectively, according to in EU-Vietnam Business Network (EVBN)’s 2016 report.
Nutifood, Vietnam's leading private dairy company, signed a contract with an American distributor in January to sell its Pedia Plus infant formula line in the U.S., taking a step forward in tapping one of the world's most challenging markets for nutritional supplements.
Nutifood targets $20 million in U.S. sales the first year, growing to $100 million in the next five years.
