Vietnam's dairy industry and cow herds in many countries have been "watched"

(Dan Tri) - Vietnam's dairy industry expects that by 2030, liquid milk made from fresh raw milk will completely replace reconstituted milk, as China did in 2025.

Vietnam’s dairy industry brought in billions of dollars in revenue for businesses in the first half of the year, while also attracting a series of new “players”. However, there are still many concerns about self-sufficiency in raw materials, as well as further development of dairy cow centers.

The numbers speak for themselves.

According to analyst firm Modor Intelligence, Vietnam's dairy industry is currently one of the fastest growing food and beverage markets in Southeast Asia, with a total market value of US$4.2 billion by 2024 and expected to achieve a compound annual growth rate (CAGR) of 8.65% by 2029.

The dairy market is expected to continue its mid-single-digit growth during 2024-2029, according to Euromonitor. This growth is driven by greater health awareness, the rise of the middle class, and the expansion of modern retail. The premium product segment such as high-protein milk, organic milk, and nut milk is expected to grow better than before.

Vietnam's dairy industry revenue (trillion VND)

Vietnam currently has about 200 enterprises operating in the dairy industry. Of these, 40 companies specialize in milk production and distribution. About 75% of the market share belongs to domestic enterprises and the rest belongs to foreign enterprises.

Leading domestic milk market share enterprises include Vinamilk , TH True Milk, Nutifood, IDP and Moc Chau Milk. Prominent foreign enterprises include FrieslandCampina (Netherlands), Nestlé (Switzerland), Abbott (USA), Mead Johnson (USA) and Fonterra (New Zealand).

In the market, Vinamilk (stock code: VNM) is leading with nearly 50% market share of the entire industry by the end of 2024 in both domestic and export markets. In the first half of the year, while domestic revenue decreased slightly, the company's foreign revenue continued to grow to more than VND 6,035 billion.

Next is TH True Milk, which currently accounts for about 30-45% of the market share of canned fresh milk in Vietnam. Similar to Vinamilk, TH is also expanding to international markets such as China, Laos, Russia and ASEAN countries.

The remaining market share is divided among other businesses such as Lof International Milk, Hanoi Milk, Moc Chau Milk... and foreign "players".

Regarding consumption, according to the Vietnam Dairy Association, in the past 6 months, Vietnam's fresh milk consumption reached nearly 837 million liters, with more than 23,200 billion VND. In parallel, the country's powdered milk consumption reached nearly 131,300 tons and reached 6,660 billion VND.

Stable demand helped businesses earn billions of dollars in 6 months, despite a slight decrease compared to the same period last year. According to statistics from the business, in the first half of the year, Vinamilk had revenue of more than VND29,710 billion, with after-tax profit of VND4,076 billion.

Lof International Milk (stock code: IDP) also brought in thousands of billions in revenue with more than 4,000 billion in revenue. However, due to high cost pressure, sales costs of more than a thousand billion caused Lof's profit to narrow to only 71 billion VND - in the same period it reached 511 billion VND. Lof International Milk has just restructured, changed the company name and changed senior personnel. However, the business situation of the enterprise has been continuously declining recently.

Moc Chau Milk in the period achieved nearly 1,400 billion VND in revenue and 123.5 billion VND in profit after tax, an increase over the same period.

Hanoi Milk also saw a slight increase in revenue to VND378 billion, but increased cost pressure caused adjusted profit to VND13 billion.

Revenue of dairy companies in the first half of the year (billion VND)

The market is so vibrant, but according to experts, to develop its full potential, the Vietnamese dairy industry still needs to do many things, especially promoting livestock farming areas as well as increasing the application of technology for sustainable development.

Still struggling to convince consumers

Currently, the average milk consumption of Vietnamese people is about 26-28 liters/year. According to Associate Professor, Dr. Tran Quang Trung - Chairman of the Vietnam Dairy Association - this figure is still low even though the industry was expected to be a nutritional pillar. He said this level is lower than many countries in the region, for example, Thailand has reached 35 liters, Singapore 45 liters and Europe up to 100 liters/person/year.

In addition to supply and demand, the Vietnamese dairy industry also faces barriers from consumer psychology. Mr. Nguyen Xuan Duong - Chairman of the Vietnam Livestock Association - said that many Vietnamese people still consider milk a drink for children, the elderly or the sick, while it is a source of nutritional supplements for all ages. According to him, milk purchasing power has also decreased significantly after the Covid-19 pandemic. On the other hand, the market has developed too "hotly" with hundreds of products plus fake and poor quality milk, eroding consumer confidence.

From a business perspective, Mr. Nguyen Quang Tri - Vinamilk Marketing Executive Director - shared that another factor affecting domestic consumption is the high rate of Vietnamese people with lactose intolerance. Lactose is a natural sugar in milk that can cause bloating, indigestion or diarrhea in some people. This phenomenon is common in communities with little tradition of drinking animal milk, causing a segment of young people to gradually abandon this industry.

To retain consumers, many businesses have changed direction, developing additional lines of lactose-free milk, nut milk or fermented yogurt to ensure nutrition and reduce indigestion symptoms for users.

60% of input materials must be imported

Another challenge is related to input materials. According to Mr. Tran Quang Trung, domestic materials currently only meet about 40% of demand, the rest must be imported.

Preliminary statistics from the Customs Department show that from the beginning of the year to mid-June, the import turnover of milk and milk products reached 659.3 million USD, up 35.5% over the same period last year. The management of imported milk still has many shortcomings. Specifically, while large enterprises dominate, many small units are less interested in domestic materials.

From a business perspective, Mr. Ngo Minh Hai, Chairman of the Board of Directors of TH Group , said that every year, Vietnam imports nearly 1 billion USD, mostly powdered milk and some products that we cannot produce such as whey protein, skim milk powder... to produce products such as formula milk for children, nutritional milk products for malnourished and stunted children, and for other groups such as the elderly, pregnant women, and sick people.

With the above challenges, according to the draft plan for the development of Vietnam's dairy industry until 2030, with a vision to 2045, the target for the industry is to achieve an average annual growth rate of about 12-14%/year. Of which, domestic raw fresh milk meets about 70-72% of the demand of the domestic dairy processing industry. At the same time, strive to achieve an average consumption of milk and dairy products of about 40 liters/person/year.

Vision to 2045, the average annual growth rate of the dairy industry is from 5 - 6%/year. The output of processed liquid milk is about 7,500 million liters/year, the output of domestic raw fresh milk is about 6,200 million liters/year. Along with that, strive for the average consumption of milk and dairy products to reach about 70 liters/person/year.

The project also emphasizes the need to gradually increase the number of domestic dairy cows to maximize the advantages of the agricultural country, increase the output of fresh milk for domestic processing to gradually reduce dependence on imported dairy products and raw materials for milk processing.

Vietnam has increased its dairy herd very well, but it is still not enough.

Dairy farm (Photo: VNM).

The Chairman of the Vietnam Livestock Association recommended that authorities seriously assess the situation of declining cattle herds and slow growth. Along with that, the industry needs to combine intensive farming with households with 20-50 cows, like the model in Korea. The management process, according to the Chairman of the Vietnam Livestock Association, also needs to be unified from the central to local levels, considering this a key national program.

In fact, Vietnam has done a very good job of initiating the strategy of promoting dairy centers. Vietnam is not famous for milk. However, there was a period when many countries had to come to Vietnam to find out why we were able to develop a very strong dairy herd, especially the brilliant period of 2007-2015. At that time, the average growth rate of the dairy herd nationwide reached 15%/year, and in some years it increased to 20%.

However, in recent years, the herd growth rate has slowed down significantly. One of the difficulties in expanding the farm scale is related to land. Ms. Mai Kieu Lien once expressed that Vinamilk really wanted to develop further but could not. Because, nowadays, it is very difficult to apply for land to rent, it can even be said that it is impossible to open more farms in Vietnam. To cope, Ms. Lien said that the only way for businesses is to increase productivity through the application of technology. Vinamilk alone has increased production from 30 liters to 35-40 liters/cow/day.

Up to now, statistics by this Association show that the whole country has more than 1,700 dairy farms, with an average size of 37.4 cows/farm and many large-scale farms raising from 2,000 to tens of thousands of cows. The total herd of dairy cows is estimated at nearly 400 thousand cows, concentrated in the Southeast region (accounting for 33.35%), North Central and Central Coast (25.69%), Mekong Delta (12.22%)...

Mr. Ngo Quang Tri suggested that the legal system should be improved and investment and product procedures should be simplified. He proposed preferential policies on tax, credit, and land to expand raw material areas and increase the localization rate. Regarding trade promotion, businesses suggested that technical barriers should be removed, while supporting research, technological innovation, and training high-quality human resources. Businesses want to maintain regular dialogue between the State and businesses, especially in the journey to promote sustainable development of the dairy industry.

According to TH representative, to achieve the goal of 4% milk consumption growth by 2035, average milk consumption per capita of about 54 liters/person/year, and proactively providing over 70% of raw fresh milk for domestic consumption (currently 40%), many things need to be implemented. The first is to develop a herd of 700,000 dairy cows to achieve the productivity target of 35 liters/cow/day.

According to this representative, the growth of dairy cows is a prerequisite for creating a breakthrough in the dairy industry development strategy, moving towards domestic self-sufficiency in fresh raw milk. He stated that if the target of double-digit growth in the next 5 years is raised to 18%, we can expect that by 2030, liquid milk with ingredients from fresh raw milk will completely replace reconstituted milk, as China did in 2025.

Source: https://dantri.com.vn/kinh-doanh/nganh-sua-viet-va-dan-bo-nhieu-nuoc-tung-phai-qua-dom-ngo-20250815141642320.htm