Market OverviewGrowing Asia* is the N1 region for growth (registered fastest growth over 2012 – 2017), and will reach USD 117 B in 2021 Asia-Pacific region expected to make up 63% of absolute dairy growth in volume terms (over 2016 – 2021) The three most important segments as of 2017 are:
- Milk (54% of the dairy market volume)
- Yoghurt and fermented milk (16%)
- Cheese (7%)
Opportunities & Trends
- China: Dairy sales expected to grow at 5.3% CAGR 2016 – 2021
- Globalization prompting more M&As: demand for increasing amount of imported/diversified products
- Development Plan for China Milk Industry promotes market consolidation (target >80% domestic sales to come from Top-10 China players by 2020E)
- Negligible MNCs presence (7-8% of upstream market share)
- India: World N1 milk producing country (50% more than the US, N2 milk producing country)
- Indian dairy market at the cusp of a Dairy Revolution: aggressive transition from unorganized/local market (80% of Indian dairy market) to organized/branded market (20% of Indian dairy market)
- ASEAN: The largest market is Indonesia (7th global dairy market) while the fastest growing market is Vietnam (+17% CAGR 2016 – 2020)
- ASEAN nations produce only 3% of all dairy consumed within their borders.
- Escalating global population, changing demographics, increasing healthcare expenditures, and growing demand for packaged food and beverages drive the global food ingredient market growth.
- Asia-Pacific market is estimated to grow with the highest CAGR in 2018 – 2023 (23% CAGR), driven by GDP growth, demand for better-flavored products and rising middle class.
- Asia-Pacific: largest regional market globally (34% of overall revenue in 2016), and expected to generate revenue of USD +39 B by 2025.
Opportunities & TrendsChina has the highest number of processing and specialty ingredients manufacturing in the region. Industry players are shifting production bases to Growing Asia (India, Thailand and Vietnam).
Sources: GCF Research, MAPE, Frost & Sullivan, Ingredients Network, the Times of India Food Ingredients market in India is expected to reach USD 1,850M in 2020 and is forecasted to grow at 13% annually.
- Processing levels of perishables to increase from 6% to 20% by 2019, with 42% of the food processing output from the unorganized sector
- Key drivers: urbanization, changing lifestyles, rising consumption spending
- Set up of a “Food Processing Fund” by the Indian governmen
Market OverviewFrom 2014 to 2017, the global bottled water market grew to over USD 240 B (9% CAGR) The global bottled water market is expected to have a market size of USD 340 B in 2021 Global per capita average bottled water expenditure was USD 32,3 per head in 2017, and a total consumption of 437 liters
- Asia-Pacific demand is expected to grow at faster rate (increasing young working population, rising number of water borne diseases, growing concerns over safety & purity of tap water)
- China (17% of 2017 total) generates most bottled water revenue in 2017, with a market volume of USD 42 B
- Indonesia is the largest market in ASEAN and the 2nd after China in Asia
- Indian bottled water is expected to grow annually by 14% (CAGR 2018 – 2021), and has the world’s largest population without access to clean water
Opportunities & Trends
- Local M&A landscape:
- Local consumers trust MNC’s products: safety & quality
- Tremendous growth in demand for health products provides space for new entrants
- Local governments welcome MNCs who take care of environmental resources
- Offering JV/ acquisition opportunities
- Local players’ small sizes offer good opportunities to enter potential markets with a limited downside
- Attractive growth markets due to increasing consumer wealth & spending