Vietnamese government initiatives designed to boost the average height of citizens by encouraging milk consumption have contributed significantly to the growth of the country's drinking milk products category in recent years, according to Euromonitor.
Sales of drinking milk products, which includes white milk, flavoured milk, powdered milk and non-dairy milk alternatives, increased from eight trillion Vietnamese Dong (VND) ($379m, €274m) in 2008 to VND23.1tn ($1.1bn, €790m) in the country in 2013, according to the report, Drinking Milk Products in Vietnam.
Throughout this period, the Vietnamese government launched “a number of initiatives in order to raise Vietnamese citizen’s average height,” said Euromonitor.
People in Vietnam are on average the shortest in South East Asia. Through its initiatives, the Vietnamese government hopes the average height of men in the country to increase from around 164cm (5 ft, 4 inch) to 167cm (5 ft, 6 inch) and the average height of women from around 155cm (5 ft, 1 inch) to 157cm (5 ft, 2 inch) by 2020.
Dairy manufacturers, such as market leader Vinamilk, have built on these initiatives, said Euromonitor.
“In response to these initiatives, manufacturers working in this category also ran advertising campaigns such as supplying milk to children in rural areas and other promotional programs, not only to strengthen their brand image but also to boost sales," it said.
In Vietnam, drinking milk products, according to the report, have traditionally been consumed by children.
Over the review period, however, consumer demand has expanded “noticeably” to adults and the elderly, it said.
This can be attributed in part to increasing consumer awareness of the health benefits related to milk, and a product offering that has “diversified in terms of size and price," the Euromonitor report said.
Plain milk was the largest growth driver in the category between 2008 and 2013, with sales of cow’s milk increasing from VND4.76tn ($223m, €161m) in 2008 to VND14.4tn ($683m, €494m) in 2013.
Sales of flavoured milk, which increased from VND1.24tn ($59m, €43m) in 2008 to VND4tn ($190m, €137m) in 2013, also contributed.
Increasing demand for milk powder, flavoured powder drinks, and non-dairy alternatives such as soy milk, which each recorded growth of more than 100% during the review period, also factored in to the expansion of the category.
In spite of this impressive growth, milk consumption in Vietnam is still "quite low compared to other countries in Asia" and the relative infancy of the Vietnamese drinking milk products market means it still has "strong potential," according to Euromonitor.
Looking ahead, Euromonitor expects the Vietnamese drinking milk products category to record a compound annual growth rate (CAGR) of 6% in constant value terms.
“Indeed, the young consumers are likely to continue to keep the stable demand for drinking milk products, whereas the increasing consumer awareness of health benefits related to milk in other population generations, especially the older one, is expected to further foster the growth of this category over the forecast period," said the report.
“Furthermore, efforts of both the government and manufacturers in stimulating the demand are another factor fueling this growth.”