Asia's Fast-Moving Cheese Markets: Australia's Race to win
Cheese is not a part of the traditional Asian diet. By global standards, Asian per-capita consumption of cheese is low, with plenty of headroom for growth. And, as the competitive environment intensifies, Australia must continue to play to its strengths if it is to succeed in Asian cheese markets in the long-term.
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The cheese and whey stream is an essential driver of supply chain returns for the Australian dairy sector. Australia has an accelerating geographic exposure to Asian cheese markets following a period of processing investments in search of higher growth and healthier margins. Cheese import volumes to China and South-East Asia will continue to expand over the medium term (in the next five years), underpinned by strong demand growth in the quick-service restaurant sector and limited local production.
However, Mick Harvey, senior Analyst at Rabobank, says that “While the headroom for growth in Asia is strong, some level of caution is required when assessing the growth potential. A sizeable slice of the demand over the forecast period depends on the expansion and penetration of pizza consumption.” And there have been signals from QSR chains that expansion plans across some economies have failed to meet previous expectations due to macroeconomic headwinds and inflationary pressures (wages and commodities), which have squeezed restaurant margins.
Where to go from here
Michael HarveySenior Analyst - Dairy Read more