Shift In Dietary Trends To Benefit Dairy Companies
Asian countries are in the middle of a shift in dietary trends and we believe dairy producers will benefit from this, especially in China, Thailand, Vietnam and Indonesia. However, in that context, we continue to see more opportunities for baby milk and powdered milk than for butter and cheese. Ageing populations will also provide opportunities for food companies to target specific deficiencies associated with old age in the region.
Increased urbanisation and changing demographics have already impacted traditional diets in most countries in Asia and we have seen a shift from cereal-based diets (rich in fibres) to protein-rich diets (with increased consumption of dairy and meat products). This shift has accompanied the tremendous growth in urban population and the rapid rise in income pushing for consumption of more value added products. Also, the increased number of women in the workforce reduces their ability to breastfeed more than once or twice a day, boosting sales of baby milk or powdered milk. However, because of bad water quality in poor areas of Asian cities, fresh milk could be preferred, on condition that it is provided by a recognised brand (usually Western such as Mead Johnson, Nestlé, Danone).
|Urban Centres Booming|
|Selected Countries - Urban Population (As % Of Total)|
Similarly, the increased presence of women in the workforce and the fragmentation of families has boosted prepared foods sales and opened up new opportunities for fast food chains and supermarkets. This has coincided with a sharp increase in sugar, sodium and trans fat intake among the largest countries in the region. Vietnam has seen its disease burden linked to increased sugar intake multiplied by 6.0 between 1990 and 2010 and has now reached a level seen in developed markets such as the US. India and Indonesia have also seen their disease burden linked to increased sugar intake rise sharply over this period (by 63.0% and 69.0% respectively), but are still much below developed market levels. Indonesia has seen its disease burden linked to increased trans fat intake double between 1990 and 2010, but is still more than 10 times lower than in the US. Still, these trends should not be exaggerated as for example, child and maternal under nutrition, combined with child underweight have decreased to such an extent that they are less of a prevalent factor in disease burden in the region, showing generally improved nutritional conditions.
|Middle Class Growing|
|Selected Countries - Household Income Above USD15,000 (As % Of Total Households)|
If we expect these increases in disease burden linked to sugar and fat intake to progress further over the medium term, we also believe the countries in the region are particularly behind in meat and dairy consumption. Apart from China, the countries in the region have very low meat consumption per capita and their disease burden linked to red meat intake is almost negligible in India and Indonesia, and very low in Thailand and Vietnam. Thailand and Vietnam had a disease burden associated with red meat intake of 18.6 and 19.6 (per 100,000 people) in 2010, compared with 39.1 in the US.
|India & Indonesia On Sugar High|
|Selected Countries - Disease Burden From Diet High In Sugar-Sweetened Beverages (Cases Per 100,000, LHS) & Growth In Burden 1990-2010 (%)|
The disease burden associated with low calcium and milk consumption is increasing sharply among populations in the region. China has the highest disease burden linked to calcium/milk deficiency in the region (at 38.9 per 100,000 in 2010). It is low by developed countries' standards (France at 73.9 and the US at 46.9 per 100,000 in 2010). Thailand and Indonesia have seen the sharpest increase in disease burden linked to calcium/milk deficiency between 1990 and 2010.
|Selected Countries - Disease Burden From Diet Low In Milk (Cases Per 100,000, LHS) & Growth In Burden 1990-2010 (%)|
We believe there is room for dairy companies to take advantage of these increases in diet-related disease burden by tapping into these markets and addressing the specific deficiencies among the urban population. However, we believe milk products will be preferred to butter and cheese products as fat intake from other sources is increasing quickly, and we could see local governments launching campaigns against obesity. Also, local diets already make heavy use of vegetable oils and we do not expect butter to replace these in cooking habits in the near term. The only exception is India, where studies have indicated that standardised mortality rates for coronary heart disease are much higher among affluent population groups as they tend to replace traditional oils with ghee, a clarified butter product containing cholesterol oxides, and causing atherosclerotic complications.
|Little Room For Butter & Cheese|
|Selected Countries - Disease Burden From Diet High In Trans Fatty Acids (Cases Per 100,000, LHS) & Growth In Burden 1990-2010 (%)|
Ageing populations in most countries in the region will also impact dietary trends and could open opportunities for food companies to target specific deficiencies associated with old age in emerging markets and especially in Asia. Older populations are still largely based in rural areas as young populations tend to move more easily to city centres. However, low birth rates in the region and population growth controls mean that the current urban population will age rapidly over the coming decade and change the characteristics of the Asian consumer.
The WHO indicated in several instances that the aged populations in Asia will be the most vulnerable to under-nutrition in the medium term because they will need some specific nutrients that are today largely absent from traditional Asian diets, and they will need better quality foods than are currently available. Among common nutrient deficiencies in the region, we can highlight the most important: iodine, iron and Vitamin A. Indian populations also have common deficiencies in carotene and riboflavin, serum albumin, folate, zinc and selenium.