Look to emerging nations, Frost tells dairy exporters

Australian and New Zealand (ANZ) dairy exporters should look to smaller Asian and African nations to tap into new markets, new analysis from Frost & Sullivan suggests. Nations with emerging dairy markets and growing middle classes in Asia and Africa are eager to import from ANZ due to the perceived high quality of our dairy products, Frost says.

The Frost analysis, Strategic Growth and Emerging Export Opportunities in the Australia and New Zealand (ANZ) Dairy Sector, finds that the market earned revenues of $11.60 billion in 2011 and estimates this will reach $17.2 billion in 2018.

“Exporters need to re-evaluate their marketing strategies to cater to newer customers, rather than simply concentrate on the big importers such as the United States and China,” said Frost & Sullivan Chemicals, Materials & Food Research Analyst Natasha D’Costa. “This will enable the exporters to not only address the healthy markets locally but also help build global dairy demand.”

ANZ dairy producers should make the most of their geographical proximity to these markets, particularly Asia. However, international market penetration involves numerous challenges such as imposing trade barriers, fluctuating currencies and the duplication of the regulatory and industry approval processes. Issues of cultural awareness also play a part, Frost says, as religious and cultural beliefs can affect food choices.

Exporters must position their products to match the requirements of the importing nations, Frost emphasised. Affordability and a basic understanding of product positioning will be crucial in gaining brand equity and loyalty in these highly price-sensitive economies.

“Finding the right mix of existing and emerging key growth export nations will ensure that the ANZ dairy market grows from strength to strength both in terms of revenue and perceived brand value,” said D’Costa.

The Frost & Sullivan report is available here.