Asia’s fast-moving cheese markets present opportunities for Australian dairy exporters, says Rabobank report


12 Oct 2018 --- There is plenty of room for robust growth in Asia’s cheese market, particularly for Australian dairy exporters who are well-placed to take advantage of increasing demand for cheese, even though it’s not a traditional part of the Asian diet. Market competition is already intensifying and there are opportunities to tap into growing demand from Asia, according to a new Rabobank report.

But it’s not just Australia which could take advantage of the buoyant Asian dairy market. Competition is picking up pace as leading cheese manufacturers in the US, Europe, and New Zealand are all looking to gain ground in the Asian dairy space, according to Rabobank Senior Dairy Analyst, Michael Harvey, who says these regions are investing in production operations and capacity building. 

Last June, the US and China signed a Memorandum of Understanding (MoU) that increased access to China for more than 200 US dairy exporters, paving the way for additional US entrants in the future. The MoU came following more than two years of intensive talks between the US Dairy Export Council and the Chinese government, finally reaching the agreement which creates significant opportunities for the US dairy sector. You can read more on this here

Does cheese growth depend on pizza? 
By global standards, Asian per capita consumption of cheese is low, with plenty of room 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, says the report. 

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 next five years, underpinned by strong demand growth in the quick-service restaurant sector and limited local production.

Growth in the Asian cheese market over the next five years is not likely to slow, according to the report, due to several overarching themes including;

  • Underlying population growth and expanding middle-classes.
  • The rise of young consumers and their desire for convenience.
  • Population density underpinned by a structural shift from rural to urban dwellings.
  • Industry investment in educating consumers on the nutritional benefits of cheese.
  • Further expansion of QSRs driven by new restaurants openings, increasing traffic at existing locations.
  • New consumer trends, e.g. Chinese cheese tea.

However, according to Harvey, although headroom for growth is strong in Asia, some level of caution is needed. 

“A sizeable slice of the demand over the forecast period depends on the expansion and penetration of pizza consumption,” he says. 

And there have been signals from Quick Service Restaurants (QSR) chains that expansion plans across some economies have failed to meet previous expectations due to macroeconomic headwinds and inflationary pressures, i.e. wages and commodities, which have squeezed restaurant margins.

Hence, there are downside risks to growth expectations that might be disruptive to forecast Asian import cheese demand. The key factors that could reduce import growth expectations over the medium term include;

  • A slowdown in economic growth and a rise in cost-of-living pressures which reduce discretionary spending and the desire to eat out. 
  • Government support to improve the competitiveness of domestic cheese production.
  • Slower than usual QSR store penetrations and reach into new cities.
  • The rise in popularity of vegan products, including vegan pizza.
  • Price pressures to support the use of alternatives such as analog cheese.
  • Trade barriers which may dilute the competitiveness of imported cheese.
  • QSR sectors in Asia being highly fragmented and industry consolidation potentially being disruptive.

Nevertheless, China will be an “engine of growth” for Australian cheese exports, says the report and based on Rabobank’s forecasts, China’s annual cheese import volumes will be nearing 200,000 tons by 2023. 

By Gaynor Selby

To contact our editorial team please email us at

Related Articles

Food Ingredients News

BI Nutraceuticals strengthens Canada presence with Brenntag partnership

15 Feb 2019 --- US-based ingredients supplier BI Nutraceuticals (BI) is partnering with food and nutrition experts Brenntag Canada Inc. to strengthen its reach in Canada. The partnership will allow Brenntag to widen its portfolio to include ingredients that are healthier, natural and on-trend, according to both companies.

Food Ingredients News

Weekly Roundup: Campden BRI launches “Brexit Hub,” Barry Callebaut places its first promissory note loan

15 Feb 2019 --- In the run-up to Brexit, Campden BRI has launched an information service to help the food industry deal with issues relating to the UK’s exit from the EU. In business news, Barry Callebaut placed its first “Schuldscheindarlehen,” a promissory note loan. SGS achieved accreditation by the American National Standards Institute (ANSI) to certify foreign food suppliers under the US Food and Drug Administration (FDA)’s Accredited Third-Party Certification Program of the Food Safety Modernization Act (FSMA). GoodMills Innovation launched two grain-based functional ingredients made from Tartary Buckwheat, which they will present at BIOFACH, Germany, this week.

Food Ingredients News

Kerry eyes foodservice growth: Social media sharing is challenging operators, says new VP

15 Feb 2019 --- Kerry is eyeing further growth opportunity in the foodservice space, with plant-based trends and social media sharing creating new potential for operators within this dynamic environment. “With our deep knowledge in food & beverages and innovation, foodservice is leading in essence and ahead of the curve in adopting trends. It is therefore a very important market for us to focus on,” Karl Buiks, VP of Foodservice, Marketing & Strategic Planning, Kerry Europe & Russia, tells FoodIngredientsFirst.

Food Ingredients News

Nestlé highlights sharpened plant-based focus as Starbucks range debuts

14 Feb 2019 --- Swiss giant Nestlé is exploring strategic options for the Herta charcuterie business including a potential sale, as the company reports its full-year results. As a further step in positioning its portfolio towards attractive high-growth categories, the company is looking to potentially divest its cold cuts and meat-based products, in favor of plant-based products to keep pace with current consumer trends. The company continues to pivot its businesses to changing market conditions by unveiling its first coffee lines under the Starbucks name which comes after Nestlé closed a US$7.15 billion licensing deal to market Starbucks Consumer Packaged Goods and Foodservice products globally.

Food Ingredients News

Ingredion’s new gum-based texturizers: Single hydrocolloids tap into sugar reduction and sensory trends

14 Feb 2019 --- Ingredion is strengthening its portfolio with the addition of single hydrocolloids which include gum acacia, cellulose gum and tara gum. The texturizers bring a greater breadth of ingredient functionality, including texture stability, emulsification and protein protection, according to the company. With Ingredion’s expertise in recipe formulation, the addition of gums seeks to aid manufacturers to market faster without compromising on mouthfeel.

More Articles