As rural residents drink more milk, the dairy market grows

Monday, Nov 11, 2019 08:02

Rural consumers are buying more milk.— Photo

Nguyen Thi Duyen, 35, from the rural commune of Duc Thuong in Ha Noi, spends an extra VND500,000(US$21.5) on milk after her 11 year-old son was said to be “shorter than others” in his class.

Duyen told Viet Nam News: “I should have bought milk for him earlier.” However, she was unable to as she was away from home for the last five years, leaving the boy to be looked after by her parents-in-law.

“As rural people, we don’t often consume milk,” explained Duyen’s mother-in-law. Things changed when Duyen came back from HCM City where she worked as a domestic helper. Seeing the city kids growing tall and finding her son not as tall as others his age, Duyen started purchasing milk.

The Vietnamese fast-moving consumer goods (FMCG) market has hit a new record of 10 per cent growth in rural areas, the highest in four years, according to market research consultant Kantar Worldpanel.

Kantar Worldpanel said in its latest FMCG Monitor edition, released on October 31, that the national economy continues to present positive indicators for the third quarter of this year, with robust gross domestic product growth.

The consumer price index was still curbed at a low level, recording the lowest nine-month average increase in the past three years. In addition, retail sales of consumer goods maintained double-digit growth.

The local FMCG market growth in rural areas and four major cities – Ha Noi, the central coastal city of Da Nang, HCM City and the Mekong Delta city of Can Tho – shows an impressive movement over the long term, nearly twice the pace of last year, thanks to the increased volume. Besides the solid performance of personal care products in both urban and rural markets, dairy products have also been catching up in the third quarter, especially in rural areas.

Ready-made-milk is among the top ten best-selling food items in Viet Nam in Kantar’s latest survey of three months ending by September.

Nguyen Huy Hoang, Commercial Director at Kantar told Viet Nam News: “It is positive to see milk consumption increase in rural areas, as it shows that they pay more attention to the children.”

Duyen’s story is not something new in the domestic market, where about 70 per cent of the 100-million-population live in rural areas.

As a market observer, Hoang adds: “It is a great opportunity for milk producers that are growing in Viet Nam.”

Coupled with the positive performance of dairy products, drinking yogurt has recovered in the cities and is seeing accelerating growth in rural areas, mainly by winning back consumers. This category still has room to expand its consumer base and increase consumption volume.

The dairy industry's revenues grew at 12.7 per cent a year on average in 2010-18, and the momentum is expected to continue thanks to an increase in milk consumption in the country, according to the Viet Nam Dairy Association (VDA).

VDA said the consumption of milk per capita in Viet Nam has increased more than 2 times since 2010, but it is still low compared to regional countries. It is still lagging behind Korea, China and Thailand.

Total revenue of the dairy industry in 2018 reached over VND115 trillion ($4.95 billion). —VNS

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