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Apac embraces healthy diets with organic dairy foods and drinks

Post a commentBy Ravi Chawat , 06-Feb-2017
Last updated on 07-Feb-2017 at 10:14 GMT2017-02-07T10:14:25Z

© iStock
© iStock

Asia-Pacific’s organic dairy foods and drinks market is growing at a rapid pace due to its enhanced nutritional profile and its role in the act of sustainability.

A close estimate of the entire industry by expert analysts at Allied Market Research reveals that the global organic market is projected to reach a value of US$36.7bn by 2022. This will be supported by an estimated CAGR of 14.25% in the period 2016-22. 

The entire market has seen lucrative growth as the production and consumption of various organic dairy products permeates several geographical markets. In particular, the Asia- Pacific region is estimated to offer promising potential for investors and expanding businesses to venture into. The industry’s vibrant competitive landscape is an indication of the dynamic growth of the industry in the next few years

While North American and European countries have established home markets, Asia- Pacific has grown most promisingly in the recent years. With a prospective CAGR of 14.81% in the period 2016-2022, this geographical market is expected to scale new heights. This can be attributed to the rise in disposable income by the regional populace, as well as the adoption of fitness and healthy eating trends.

An upswing in the standard of living, greater concerns over the consumption of healthy foods, and the increase in purchasing power has ensured an emerging marketplace in South Korea. India and China are also extremely promising regions for growth.

The availability of substantial organic farmland in these countries allows companies to set up organic dairy farms easily. Meanwhile, potential new entrants in the markets and internationally established players see the region as offering prospective investment pockets for setting up operations. By marketing their products, they can gain significant revenues from an enthusiastic consumer base in India and China.

The Indian population is increasingly aware of the health benefits associated with the intake of dairy products derived from cows that are organically fed and not treated with antibiotics. This is perhaps why the market contributed to a regional revenue of nearly US$153m in the year 2015. This number is expected to rise considerably by 2022, with a supporting CAGR of 16.19% over the next few years.

China and Japan also appear extremely lucrative with an encouraging growth in the same forecast period from 2016 to 2022. Both the countries are expected to achieve a greater market share with CAGRs of 15.05% and 14.51%, respectively.

The majority of dairy giants in the industry have been venturing into Asia-Pacific by launching their own ranges of organic dairy products at competitive prices. The focus is to capture a larger consumer-base and establish brand loyalty with their innovative product offerings. It is not uncommon to see industry players increase the range of their flavours in the types of milk, cheese, butter and yogurt products. Companies have also been launching their latest organic dairy products in countries that offer lucrative prospects in terms of product consumption and better revenues.

Danone, the European dairy giant, for instance, is looking to expand its organic presence in India as part of its plans to double business and operations in the country by 2020.

There is no doubt that environmental concerns, as well as awareness of healthier lifestyle choices, will continue to lead to a discernible shift in organic food consumption in Asia- Pacific. Over the advent of time, these organic dairy food and drinks are set to create an established market in region, offering considerable business opportunities.

Ravi Chawat is a market research analyst for Allied Market Research 

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