Top Growth Opportunities: Dairy & Soy Food in Malaysia
Malaysia ranks amongst the smallest markets in the global Dairy & Soy Food sector in terms of per capita expenditure in US dollar terms, although it is larger than the Philippines, China, and Indonesia. Although both the Malaysian population and their disposable income are increasing, wealth remains concentrated in specific urban areas and a large, poor, rural population remains. This means that overall per capita expenditure in US dollar terms is low, and that manufacturers and retailers need to carefully select regions within the country to focus on.
Malaysia is a relatively small Dairy market, but it will see very strong growth over the next five years, with a CAGR of 8.9% by 2021. Rising disposable incomes and a growing middle class will drive further dairy consumption in Malaysia, as part of a healthy diet, as dairy contains high levels of protein and calcium. Younger generations’ growing preference for Westernized products, and further urbanization, will also be among the drivers behind growing dairy consumption.
Further urbanization, rise of middle class, and young generations increasing Westernization are driving growth in Dairy consumption, and fast growth of 8.9% CAGR is expected for the 2016-2021 period. This is the third fastest growth among the ten countries studied. The US withdrawal from the TPP agreement will increase uncertainty about the import driven dairy products supply in Malaysia. The country imports most of the dairy products it consumes, and the US is its third bigger exporter, accounting for 10% of imports in 2015, according to USDA. The TPP agreement cancelation will not harm dairy consumption growth as most of imports come from New Zealand and Australia, summing together 60% of imports.
The Off-trade Dairy sector accounted for a higher value in US dollar terms than the On-trade, although On-trade growth was slightly better during the 2011-2016 periods, favored by the increasing availability of Dairy products in restaurants, coffee shops, and QSR operators. However, both Off-trade and On-trade Dairy sectors recorded a decline in terms of growth in US dollar terms due to a weakening of the Malaysian Ringgit against the US dollar during the last five years.
Over the past couple of years the Malaysian government has been accused of corruption, after allegations made by the Wall Street Journal against the current Prime Minister Najib Razak for transferring RM1.7 Billion (US$700 million) from a state-owned investment firm where he was a chairman, to his personal account. Malaysia is one of the fastest growing economies in the Asia-Pacific region, with the potential to become the world's 21st largest economy by 2050, according to HSBC. However, the recent political scandal against its current prime minister has caused the sharp depreciation of the Malaysian Ringgit since 2015.
The report Top Growth Opportunities: Dairy & Soy Food in Malaysia identifies the key demographic groups driving consumption, and what motivates their consumption. When combined with an in-depth study of market and category dynamics, readers are able to identify key opportunities, and what they need to do in order to target them.
In particular, this report provides the following analysis -
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