The Asia-Pacific flavored milk market is projected to register a CAGR of 4.5% during the forecast period (2020 - 2025).
- The market is primarily driven by the desire for nutritious and healthy food, which is prompting consumers to turn to nutrient-rich milk products. Urbanization, rising prosperity, and the pace of modern life have increased 'on-the-go' consumption of ready-to-drink (RTD) beverages.
- Consumers’ eagerness to try new food and drinks and them seeking indulgent eating and drinking experiences as a way of escaping the daily grind are also boosting sales in the region.
- Despite the important nutrient contributions flavored milk makes to the diet, concerns about the potential effects of the added sugar and flavorings in flavored milk have raised questions regarding the role of flavored milk in a healthy diet.
Key Market Trends
Plant-based Diet is Gaining Popularity in the Region
Asia dominates the vegetarian market. There is a rising vegan population in Asia, in countries like Australia, which is among the fastest-growing vegan countries, globally, along with China. In addition, there is a high prevalence of lactose malabsorption in Southeast Asian countries compared to other parts of the world. This has led to a large segment of consumers opting for dairy alternatives that are free from lactose, hence, boosting the sales of the market. Developed markets in regions, such as Japan, have introduced certifications for dairy alternative ingredients. Foods for specified health use (FOSHU) are functional foods containing ingredients approved by the Ministry of Health, Labour and Welfare. Japan helps to promote health or control conditions, such as blood sugar and dental hygiene. Japanese are increasingly substituting these with dairy products, not only as a beverage but also as a cooking ingredient.
China Holds a Prominent Market Share
Flavored milk is a rapidly growing category, aiming for further business growth by developing new customers. In addition to the development of new products by major brands, local brands are also growing their product offerings in the country. Chinese consumers who are concerned about their overall wellbeing are driving the consumption of these products. Owing to favorable economical factors of the country, the key vendors are continuously trying to make their products different in terms of quality, ingredients, flavors, and packaging, in order to gain the competitive advantage. However, stringent government regulations regarding the import/export of dairy products are expected to hinder the growth of the market.
The Asia-Pacific flavored milk market is fragmented with the presence of a few key players, such as Nestlé SA, Hershey's, and Saputo Inc. Due to the dynamic nature of the market, it is highly competitive and fragmented. Companies also compete in terms of new variants of flavors and attractive packaging. There is ample scope for regional players to gain a competitive advantage, provided that they bring in substantial innovation at the ingredient and packaging levels.
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