Nut milk market development trends in the future

Nut milk – a sustainable consumption trend

Nut milk is a very fast-growing product group in the world market. According to a recent survey conducted by Innova Market Insights, the global market for plant-based beverages increased to US $ 16.3 billion in 2018, doubling the number of US $ 7.4 billion in 2010. According to Nielsen, it is estimated that the global plant-based milk market will reach US $ 11.9 billion in 2017 and will grow to US $ 34 billion by 2024.

In Vietnam, the intent of consuming nut milk is also increasing sharply. On the report of a survey in 2019, up to 66% of Vietnamese consumers want more products made entirely from natural materials. Alternatives to cow’s milk such as soy milk, almond milk, rice milk, oat milk, coconut milk, cashew milk, etc. will become progressively attractive to consumers, with different needs depending on the region.

Domestic nut milk market

According to the General Statistics Office, the volume of liquid milk in Q1/2020 reached 369 million liters, an increase of 1% over the same period last year. Liquid milk revenue in Q1/2020 reached VND 15.3 trillion. Vietnam’s liquid milk market has a compound annual growth rate of 14% in the period of 2014 – 2019. It is predicted that liquid milk production in Vietnam will continue to increase in the next few years due to capital investment in dairy farms to reduce dependence on imported unpasteurized milk.

Production of liquid milk, 2014 – Q1/2020

Source: VIRAC, GSO

In 2018, the domestic nut milk market accounted for 12% of the liquid milk market structure, with CAGR reaching 18%, the highest among liquid milk lines.

Source: VIRAC

Back then, the market was familiar with Vinasoy’s soy milk product (from Quang Ngai Sugar Joint Stock Company). In the first 10 months of 2019, Vinasoy’s milk consumption increased by 13% and its revenue also increased by 15% (Nielsen). However, the nut milk market really started to accelerate when Vinamilk and TH True MILK kicked off to invest and launch diversified plant-based products in 2018.

Source: Vinamilk, TH true MILK

TH true NUT product line from TH true MILK was the pioneer in the nut milk market with fresh milk flavor combined with heart-healthy macadamia nuts and date palm fruit that brings natural sweetness. Shortly afterwards, the trinity of Vinamilk’s soy milk products combined with walnuts, almonds and red beans has also drawn consumers’ attention for its delicious, easy-to-drink, but nutritious from these nuts.

The growth rate forecast of milk product lines

Source: VIRAC, Euromonitor 

The growth rate of alternative milk has been declining since 2013. But it is the only product line with the CAGR that has steadily increased from 2016 onward, when the consumer demand for dairy products increased following the comparative information on nutrient levels for animal milk lines. It is forecast that in 2018-2022, the double growth rate of alternatives will reach 15%, the highest in traditional milks.

Development trends of the plant-based milk market

Development of material areas

Currently, the source of raw materials for producing nut milk is controlled. The input of plant milk materials such as macadamia, walnuts … has not met the domestic demand yet. In which nearly 100% of dairy materials are imported.

As for the input supply of TH True Milk, macadamia farms have been planted in the Central Highlands for more than 10 years, the planted area has reached nearly 2,500 hectares and been considered of good quality. However, it still cannot meet the demand of input materials for domestic production. Vinamilk’s new lines of nut milk, with ingredients mainly extracted walnuts, almonds and red beans, are also imported primarily from the US farms. The raw material milk industry in Vietnam is still in its infancy and is gradually standardized to improve the quality of its farms as well as the seeds quality.

Exporting to international markets

Vinamilk is an active enterprise in foreign markets that has some achievements: the growth rate of more than 25% of the Angkor dairy factory in Cambodia and nearly 15% of the direct export activities. Vinamilk hit a US $ 20 million dairy export contract in 2020 to the Middle East signed at Gulfood Dubai International Fair, then successfully exported the first batch of condensed milk to China and many other countries.

In the first 3 months of 2020, Vinamilk’s main export is the UAE (accounting for 75% of export revenue). Vinamilk has promoted consumer demand research, sought opportunities and focused on developing its products into typical Southeast Asian markets such as exporting 100% organic milk according to European standards to Singapore and was well received by this market.

Source: VIRAC 

Most recently, Vinamilk successfully signed a US $ 1.2 million export contract of 85 containers of soy milk products including walnuts, almonds, red beans and bubble tea to Korea. This is a significant number in the context of the world economy still being affected by COVID-19. As a developed country with a high standard of living, Korea has never been an easy market to conquer.

Protocol’s agreement opportunity

After the signing of Vietnam and China Protocol’s agreement to export dairy products, TH True Milk is the first enterprise to be granted official export license to this billion-dollar market. The two products that are allowed to be exported by TH true Milk are Sterilized Milk and Modified Milk with natural flavorings. However, in the future, TH Group is gradually shifting export products to yogurt and nut milk.

The China market is a large one with the capacity to import many agricultural products. But in reality, Vietnamese enterprises only meet a very small demand, of less than 2% of total import turnover of China, so the market scope is still enormous.

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