Domestically made dairy products have upper hand over imports
Domestic dairy production has been increasing rapidly, while the proportion of imports in total domestic consumption is on the decrease, which is good news for Vietnam’s dairy industry.
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The imports have decreased as domestic dairy producers are scaling up their production to better satisfy domestic demand. Vinamilk, the nation’s leading dairy producer, for example, has increased its capacity from 400 million liters to 600 million liters and will continue to increase to 800 million liters per year in 2018.
The dairy industry reported total revenue of VND100 trillion in 2017, an increase of 10% over 2016, according to the Vietnam Dairy Association (VDA), of which powder and liquid products made up 75%.
The dairy import turnover in 2017 increased by 2% to US$868 million, but it only accounted for 19% of the total value of the industry.
Domestic dairy producers tend to expand their cow farms to better control the material supply and ease the reliance on material imports.
As consumers tend to be choosier about food hygiene, domestic companies now focus on developing new products that meet consumers’ taste and high requirements.
Vinamilk is developing its organic products, while other companies focus on developing alternative dairy products from vegetation. Quang Ngai Sugar has black sesame soya milk and green tea milk, while IDP has corn milk products.
Vinamilk, after taking up the US’ Driftwood, plans to launch condensed milk and creamer into the market with the Driftwood brand. It has joined forces with Miraka to make products in New Zealand and has set up Vinamilk Europe with headquarters in Poland.
NutiFood jumped to the No 1 position in specialized dairy market segment with products designed to improve digestive system, height, weight, and products for malnourished children.
In mid-February, NutiFood signed a contract with the US partner Delori on exporting Pedia Plus, the ready-made powder milk product for anorexic children to the US.
NutiFood is a 100% Vietnamese owned enterprise. From its beginning, the company decided to focus on developing nutritious dairy products for domestic consumers.
Tran Quang Trung, chair of VDA, said the dairy industry has been growing rapidly by 15-17% in recent years. Domestic producers now spend money and effort on both research and processing with attention paid to developing material areas, rather than relying on imports.
According to the General Department of Customs (GDC), Vietnam imported US$231 million worth of dairy products in the first quarter of the year, a modest increase of 7.5% over the same period last year.
