Here’s how brands can overcome slow growth in APAC’s dairy market

Brands need products that align with local cuisines and enhance daily lifestyles.

The Asia Pacific dairy market remains underdeveloped compared to other regions, presenting significant potential for growth, Euromonitor International reported.

The report said that drinking milk products dominate dairy retail sales in the region, accounting for 58% of retail value in 2024, yet per capita consumption is notably low. Asians consume just 12.8 liters per capita annually through retail channels, far below the 42.3 liters in Western Europe and 36.6 liters in North America.

From 2023 to 2024, retail volume and value growth have been slow due to economic uncertainty. To attract value-conscious consumers, brands need products that align with local cuisines and enhance daily lifestyles.

Price sensitivity remains a key consumer trait, driving demand for private-label products and shelf-stable options perceived as cost-effective. Yet, premium brands are finding success by emphasizing wellness and value-added attributes.

In Japan, Meiji Oishii Gyunyu’s premium fresh milk thrives due to its strong nutritional profile. Similarly, yoghurt brands are focusing on health benefits, with functional products like South Korea’s Hy using allulose for reduced sugar and China’s Yili launching non-refrigerated AMX Living Probiotics for digestive health.

Dairy consumption varies significantly across Asia Pacific, with mature markets like Japan contrasting sharply with low-consumption markets such as Malaysia and Indonesia. To bridge this gap, brands are adopting localized strategies to increase consumption. Japan’s Morinaga Aloe yoghurt has tripled its aloe content for indulgence, while Oatside’s 200ml mini oat milk encourages trial in Southeast Asia.

Cheese consumption remains limited due to unfamiliarity with unprocessed options. Processed cheese dominates, with 52% of retail sales in 2024. Innovations like Japan’s squeezable Torochi cooking cheese and Kiri’s cube cheese for snacking aim to expand cheese applications beyond traditional uses.

Short-term products like The Laughing Cow’s flavored Cheez Dippers may spark interest but lack significant impact on market growth. Long-term success depends on health-focused innovations and products that fit local tastes and cooking habits.