However, it’s not always the case that taking ‘western’ products to Asia will bring success. The continent has a wide variety of tastes, so some of the flavors being incorporated into new dairy products in the region may come as a surprise.
Anika Nafis, associate director, trend and innovation consultant, at Mintel, told DairyReporter according to the Mintel Global New Products Database (GNPD), China has seen the most dairy launches in the last three years, followed by Japan, with launches in both markets focused on liquid yogurts.
India comes in third place, with butter being its leading sub-category.
Plant-based at the front
While there are great variations in the region, and even within countries, Nafis said there are some common threads that hold Asian countries together.
“Plant-based drinks lead, given the lactose intolerance rate across most Asian countries,” Nafis said.
“We are seeing a rise in both plant-based and organic/purity claims in new products, all creating a ‘natural’ image.
“When it comes to plant-based drinks, Mintel GNPD reveals that Japan and Korea lead with interesting ingredients like black seeds and beans. We’re also seeing a rise of the inclusion of basil seeds in juices move to dairy and dairy alternatives.”
Probiotics and prebiotics
She added that much of Asia is ‘shelf-stable.’
“Growing categories like drinking yogurt are going to start educating the market about prebiotics and probiotic—traditionally a challenge in shelf-stable products.
“Brands in other categories like snacking are starting to patent probiotics for their products, taking a share of the gut health trend. If dairy can credibly claim probiotics in ambient products, it’ll be a unique step for the category.”
Ghee is key
India, however, is innovating with ghee.
“Local/‘desi’ ingredients are starting to play a strong role across all dairy categories,” Nafis said.
“The whole notion of farm to table in India has a very humble image—it’s the hard work of the farmers and the people that pick up and deliver these products that give dairy a human element.
“On the flipside, the farm to table concept in Western markets or even China has a technology twist to it. It’s all about the process; the plants that process the products and the technology that goes behind making it safe and clean.”
‘Playing with textures’
Countries like Japan and South Korea are starting to look towards plant-based dairy alternatives or including plant-based protein in dairy, Nafis noted.
Mintel is seeing the use of black seeds and black beans to boost the protein proposition of products.
Further, brands in these countries are also playing around with textures.
“There are some interesting cross-category activities happening in the dairy sector where brands are borrowing texture elements from other dairy subcategories or even unrelated categories like soft drinks.
“Starbucks, for instance, released a cheese drink with berries and crushed almonds and we have also seen yogurt flavored lactic acid soda launched last year in the supermarkets. A few years ago, the thought of a fizzy dairy product would have sounded odd.”
Nuts and grains
And there’s another ‘nut’ to add to the mix of beverages.
“We’ve seen walnut drinks take off in China more so than in any market,” Nafis said.
“In dairy, local brands like Want Want are innovating in different spaces with nuts and grains. China is also innovating in drinkable yogurt with unique flavors like red date, sea salt and ice cream flavored yogurts released on shelves.”
Nafis said trends seen in ‘the west,’ such as clean label and more recently, vegan, are being replicated in Asia, but they play to very different consumer needs.
“Clean label here delivers to the need of knowing where the ingredients come from and how they are processed, so consumers know it’s safe for them to eat and does not impact their health.
“It’s a very basic hygiene need from food and drinks. It’s very different to Western markets where the benefit of knowing where your food comes from creates a premium farmer’s market style image.
“Same for veganism; vegan products in Asia play to a need of a flexitarian life—reducing meat intake for a healthy lifestyle rather than catering for a drastic change in their diet or lifestyle.”
Different opportunities
As well as different flavors, there are other unique innovations within the Asian market.
“The uniqueness in Asia is that brands are starting to really play around with different textures to create a sensorial effect or a slight unexpected surprise in the product experience,” Nafis said.
“In Western markets like the UK, Australia and New Zealand, brands promise a sensorial effect through product description and on-pack symbolism, but it is Asian brands that are really playing around with the formulation of products.”
And while China, Japan and India dominate the market, there are other large nations that present opportunities.
“Most of Southeast Asia is not as developed, so there are definitely opportunities left here to explore—especially in markets like Myanmar where we are seeing a range of global brands entering the market,” Nafis explained.
“There are also big dairy companies entering smaller markets like Bangladesh, for instance. Opportunities in the lesser developed dairy economies definitely exist and it appears the more developed ones like India and China are maturing.
“That said, these countries have one of the largest volumes globally so there are still lots of opportunities to expand within these markets.”