With the increasing population of Singapore, demand for the dairy products is marginally slower in the country as per the review period’s performance and these are some of the key factors influencing and improving the operational efficiency of the dairy products market growth. Changing consumer dietary patterns can be a significant offer for growth opportunities for emerging economies. Whereas, value-added products (VADPs) increasing shares is restricting the market growth of overall dairy products, such as cheese, milk and related fresh dairy items, yoghurt, ice cream, novelties, milk powder/whey protein concentrates, and sauces, etc. Majority of Singaporeans did not think that milk consumption is important as a part of their daily diet. They felt that they can get all the essential nutrients of milk from other by-products of milk and other food sources. Consumption of milk among adults has been steadily declining.
Around 81% of dairy products are exported from the developed countries to the world and by 2027 the rate is expected to increase to 82%. Over the next decade, developed countries are projected to increase exports by 22%, implying an annual growth rate of 1.8% p.a. Other dairy products, such as cheese, soy desserts, coffee whiteners, ice cream, yoghurt and sour milk, etc. are continued to observe a decline in current value sales. In 2018, revenue in the milk products segment amounts to US$ 557 million (S$ 766 million); milk & cream segment amounts to US$ 265 million (S$ 364 million); yoghurt & curdled milk segment amounts to US$ 89 million (S$ 122 million); cheese segment amounts to US$ 177 million (S$ 243 million) and Ice Cream segment amounts to US$ 53 million (S$ 73 million).
Dairy Products Trends in Singapore:
In 2017, the dairy products market was a worse performance and current value terms were stagnated compared to the review period’s 1% value CAGR due to increased maturity across the category. Due to the limited marketing efforts, a slowdown has been seen in the growth of chilled soy desserts. Coffee whiteners, cream and cheese experienced slow growth in current value sales as the consumers are now becoming health-conscious and preferring less fat in their diet. The growth was marginally slower as it recorded only 3% current value growth in comparison to 4% value CAGR of the review period. This shows a stable demand amongst Singaporean consumers, whereas, the demand is driven by young adults interested in Western food such as pizza and pasta and are increasingly familiar with cheese.
Drinking milk products is expected to record a value CAGR of 2% at constant 2017 prices, which will be slower than the review of forecast period’s 3% value CAGR at constant 2017 prices. This is due to the stiff competition among various brands and their continuous efforts to price promotions and marketing activities to maintain their share. Moreover, new products are launching targeted health-conscious consumers, which is increasing, and highlighting players’ attempts to strengthen their brand positioning. The overall growth of dairy products was stable compared to the review period value CAGR. Butter and margarine also recorded a slow value growth rate of 3% in 2017. The major driver for the growth of butter and margarine are sliced bread or toast, a common local popular spread breakfast among Singaporeans.
Propagation of Appropriate Nutritional Information of Dairy Products in Singapore:
A recent-released report on milk consumption in Singapore, 50% of the adult of 18 to 69 years Singaporeans do not drink even a glass a day, according to the Singapore Health Promotion Board’s (HPB) National Nutrition Survey. People in Singapore do not get the daily recommendation of allowance of milk for calcium intake and the protein intake is below the recommended level in one in four of the Singaporeans. Such nutrient found in milk plays a crucial role in the health and well-being of adults. With the rapidly changing societal landscape of Singapore, the ageing population is increasing with the time and birth rate declining. 11% to 20% population of the country is expected to increase the elderly population by 2030.
In western countries, drinking milk is considered less of a cultural norm compared, they generally, utilize it more in cooking, as part of the breakfast routine or consumed on its own with a meal. Singapore’s fast-paced society is one of the main reasons for low milk consumption in Singapore. Many adults’ beliefs that consuming milk is not important for them but they feel children’s need to drink milk regularly, as it is important for them and the elder people only. Singaporean young adults take their bones for granted and do not realise that bone is an active living tissue which needs a continuous supply of nutrients. The dairy products industry has taken the battle on its own hand to create awareness among people and increase milk consumption in Singapore.
Challenges in the Dairy Products Industry in Singapore:
It is important to recognise that the Singaporean consumers are very value conscious regarding the purchase of dairy products. The consumers have a high disposable income, though spend of the Singaporeans is under their set targeted budget. Possibly, the other reasons behind the stagnant growth of the dairy products that they are health conscious for their health and avoid eating fatty products. Consumers in Singapore considered milk as a high-fat food with a fat content ranging from 15 to 46%, when the actual fat content is less than 4% and massively overestimated the percentage of fat content within the full-fat milk category. Fat content and weight gain is a significant key concern behind the barriers to dairy products consumption in the country.
F&N Foods, Milkmaid, Carnation, Yakult (S) Pte Ltd, Kraft Foods (S) Pte Ltd, Philadelphia, Unilever’s brand Magnum, Cornetto, Wall’s and Ben & Jerry are some leading players of Singapore dairy products industry. Players are strongly investing in new product developments and marketing campaigns to sustain consumer’s interest in their products despite the fierce competition amongst other brands. For new entrants, it is a really tough market to stand amongst the leading player when they are already fighting to gain the leading position in the market. The dairy industry needs to work on building consumer trust on a pre-competitive basis and the brands need to be branded and it can be built on the basis of the “Undeniably Dairy” campaign.
Opportunities in the Dairy Industry in Singapore:
Singapore is a hotbed of food innovation and the gateway to SouthEast Asia and it is the second largest market for US Dairy exports globally and the largest outside North-America, valued at $690 million. The key markets in this region which are increasing the demand for dairy products are countries like China, Indonesia, Malaysia, Bangladesh, and Thailand. The Asia Pacific acquired considerable share during the forecast period due to the rising consumer base and increasing demand from growing end-use industries. The leading companies are trying to cater the hectic lifestyles of the consumers by launching smaller pack sizes continuously providing greater convenience for on-the-go consumption.
Leading companies like F&N Foods launched a 500ml pack size of Magnolia Plus Oats Milk and Delamere Dairy introduced a 200ml pack size of Delamere’s Goat Milk. The government is trying to make a real impact by trying to work both the public and private sectors aggressively work together and implement strategies to improve consumers’ awareness towards nutrition and health. For those who do not like the taste of milk are recommended to have flavoured milk instead. Leading brands are continuously taking efforts to launch such products as per the consumer’s preferences and launching a small size pack as it can be to reach out the Singaporean consumers throughout their busy schedule.
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