Milk producers in Malaysia saw robust sales despite pandemic in 2020

by asiafoodbeverages
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While many developed countries like the US and Japan saw dismal performance for the milk category during the pandemic, Malaysia saw it otherwise in 2020.

During the lockdown in 2020, Malaysian milk producers saw huge drop in sales of milk and dairy products from the food services segment, however this was offset by higher online and offline sales at the grocery stores as most people work from home.

For The Holstein Milk Co. Sdn Bhd (Holstein), the producer of Farm Fresh UHT milk and yogurt products, the surge in retail sales saved the day. Holstein is the market leader for fresh milk category with more than 50% share of the market producing about 27 million litres of fresh milk a year. According to its spokesperson, the lockdown also resulted in an upswing for chocolate milk and flavored drinks as children are consuming more from home when the schools were closed.

Another major player, Fraser & Neave (F&N) also experiences similar demand trend for its Magnolia and Farmhouse brands.

Euromonitor estimated Malaysia fresh milk and UHT milk sales through the retail channels to grow by 10% to 6% respectively in 2020. The main reason for this growth is the perceived health benefit associated with milk consumption which push sales to greater heights particularly during the pandemic period. Another reason is Malaysia’s growing ageing population which demands healthier food products like fresh milk and dairy products with added calcium contents. More people are also switching from milk powder to fresh milk for convenience and better nutrition.

According to data from Malaysia’s department of veterinary services, the country’s consumption of fresh milk in 2019 went up 4.32% to 70 million litres from 2018. About 40.5 million litres were produced locally by 64 commercial dairy farms and 692 small producers. Local fresh milk production had increased by 11% from 2015 to 2019. Industry players like Holstein, F&N as well as newcomer Rhone Ma are hoping to make Malaysia self-sufficient in milk (production) by 2025.

Holstein is now on a rapid expansion path after it brought in Malaysia’s state investment agency, Khazanah Nasional as an investor. Meanwhile, new player, Rhone Ma focuses more on digestible A2 milk from Holstein cows imported from Australia at its first farm since the middle of 2020.

To attract domestic consumer interest, dairy producers in Malaysia have gone one step further by flavoring their products with popular local fruits and ingredients such as guava, pineapple, dates, hazelnut and red bean.

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