Vietnam's Dairy Industry Overview

Vietnam has emerged as a significant player in the global dairy industry, marked by substantial growth both domestically and internationally. The sector is a crucial aspect of Vietnam's agricultural framework, contributing significantly to the national economy.

Milk Production and Dairy Cattle

As of 2023, Vietnam's dairy cattle population is approximately 320,000, resulting in an annual milk production of about 1.2 billion liters. This reflects the country's investments in agricultural technology and improved farm management practices.

Milk Processing and Cheese Production

Vietnam processes around 900 million liters of milk annually, producing approximately 20,000 tons of cheese. These processed dairy products are consumed domestically and exported, showcasing Vietnam's efficient processing capabilities.

Milk Powder and Whey Production

The country produces about 50,000 tons of milk powder and whey each year, which are essential for the domestic market and play a significant role in exports.

Key Dairy Enterprises

Prominent players in the Vietnamese dairy industry include Vinamilk, Dutch Lady Vietnam, TH True Milk, and Nutifood. Major dairy farms such as TH Group Farms, Vinamilk Farms, and Moc Chau Milk Farms are central to the industry's infrastructure.

Export and Import of Dairy Products

Vietnam exports around 300 million liters of dairy products annually to countries like China, Cambodia, and the Philippines. Despite strong exports, the country imports approximately 100 million liters of dairy products each year to meet domestic demand.

Significant Events in Vietnam's Dairy Industry

Recent developments include the inauguration of the TH Group's livestock complex in Russia's Moscow region and investments by Vietnam's TH Group in Russia's Far East. The entry of the a2 Milk Company into the Vietnamese market and global manufacturing shifts have influenced Vietnam's dairy exports. The expansion of the Binh Duong facility in Vietnam, with a EUR 97 million Phase 2 launch, aims to meet regional demands with a production capacity of 30 billion packs annually. Partnerships, such as those between Nutifood and Australia's ViPlus Dairy, and the establishment of a cheese processing plant by Megmilk Snow Brand in Ho Chi Minh City, highlight Vietnam's growing international collaborations.

Challenges and Opportunities

The industry faces challenges with slowed growth and shrinking resources. The national dairy herd growth has slowed to just 0.4% per year. Urbanization has reduced grazing land, and high feed costs have impacted profitability. The government's target is 650,000 dairy cows and 2.6 million tonnes of fresh milk annually by 2030. The strategy aims for self-sufficiency rates of 80-82% by 2045, alongside a per capita consumption increase to 70 liters annually.

Regulatory Developments

Vietnam plans to introduce new technical standards for dairy and alcoholic beverages by July 2026 to enhance food safety, continuing its commitment to food safety through previous initiatives and engagements with the World Trade Organisation (WTO).

Expansion and International Influence

Chinese dairy companies, including Feihe, are expanding their operations to Vietnam as part of their Southeast Asian market strategy. Indonesia's inaugural shipment of processed dairy products to Vietnam included yogurt products valued at $65,000. Vietnam's largest dairy company, Vinamilk, is expanding its global presence and recently obtained a patent in the United States. SIG has expanded its used-carton collection and recycling program, "Recycle for Good," to Vietnam, launching in Bac Ninh province to collect empty milk cartons at preschools and primary schools.

Awards and Recognition

Vietnam Dairy Products won the Best Children's Dairy Product award for Vinamilk Optimum A2 Pro+. Vinamilk presented its 50-year journey of brand transformation at the Global Dairy Congress 2026 under the theme 'Fit for Purpose.' International dairy companies are investing in Vietnam's dairy industry to promote sustainable practices and digital transformation.

Market Dynamics

Vietnam is emerging as a strategic market for dairy products, supported by a population of 101 million and an expanding economy. This economic context provides opportunities for dairy businesses operating in or supplying Vietnam. Vietnam imports over $100 million of Indian buffalo meat, indicating its significant role in the region's broader agricultural trade context. Milk powders have recorded a significant increase in shipments to Vietnam. The CPTPP includes New Zealand and Australia, as well as Canada, Chile, Japan, Mexico, Peru, the United Kingdom, and Vietnam. Vietnam is part of the CPTPP, a trade agreement that could impact Costa Rican dairy producers. Vinamilk of Vietnam also remained among the world’s strongest dairy brands, scoring 89.6 points.