A growth in UHT milk sales in Kazakhstan over the next five years, coupled with the country’s limited production capacity could give international brands opportunities in the country, says a research analyst from Euromonitor.
Over the past ten years, the milk market in Kazakhstan has changed significantly, with the consumption of unpackaged milk falling from 85 per cent of the market in 2003 to 43 percent in 2009.
Consumers in Kazakhstan are switching to milk in stores as there is a risk of contamination from milk bought from the street, markets and home yards. The Milk Union of Kazakhstan started to encourage consumers to purchase milk from shops, resulting in an increase in packaged milk sales.
Opportunity to launch UHT brands
UHT milk is currently the most active category in the market at the moment with per capita consumption of the milk expected to grow over the next five years, from 10 litres per capita in 2009 to 16 litres in 2015, said Violeta Mordas a research analyst at Euromonitor
In the western part of the country, the share of UHT milk is very high. In some towns UHT milk accounts for 90 per cent of all milk sales. The highest consumption of milk is in the biggest city in the country, Almaty where there is both a high level of income and a large population.
Mordas said that the growth in UHT milk demand in Kazakhstan could open up opportunities for neighbouring countries to launch their UHT brands in the Kazakh market. This is because domestic production capacity for milk in Kazakhstan is restricted due to factors such as the breed of cows available and the limited number of large farms.
“For example in the neighbouring Russian market, where there is much more fresh milk available, the price of it is lower, and so is the cost of producing it. As a result, a few Russian brands have appeared on the Kazakh market, with prices lower than domestic brands,” Mordas said.
The growth in UHT milk is expected to rise for a range of reasons: refrigerating milk is either expensive or impossible due to the hot climate and distances between towns in Kazakhstan. Knowledge and awareness of the health benefits of milk and the method of UHT production are growing.
In addition to this, consumers are gaining a growing awareness that UHT milk contains vitamins and minerals. There is also the fading perception that for the shelf life of UHT milk to be so long, preservatives must be added.
Posted on September 20, 2010 at %I:%M %p