Market Dynamics:
Increasing health consciousness among consumers is expected to drive the A2 milk market
Factors such as increasing preference for A2 milk, increasing health consciousness, the rapid spread of knowledge related to health and well-being through social media platforms, traditional advertising mediums, and increase in consumer spending in developing regions are driving the growth of A2 milk market. Moreover, the introduction of food and beverage policies that mandate the companies to display ingredients and nutritional values on product packaging plays a major role in helping consumers for healthier alternatives. Research studies have shown an increase in gastrointestinal-related problems in some people consuming A1 beta-casein-containing milk. Also, the consumption of A2 milk indicated minimal or no gastrointestinal problems or discomfort. A2 milk is easily digested compared to A1 milk, and thus is being widely preferred over A1 milk across the globe leading to market growth. A2 milk has nutritional benefits such as higher protein content, easy digestibility, a rich source of calcium, essential vitamins and minerals etc. and is also free of antibiotics and hormones. Due to such health advantages, a surge in demand for A2 milk is being observed globally. Also, increasing health awareness and growing disposable income has led to a preference for A2 milk over conventional milk. A2 milk is also being preferred for manufacturing other dairy products and infant formula due to its easy digestibility and other health benefits. The increasing demand for dairy products thus augments the demand for A2 milk globally.
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Market Segmentation:
Liquid segment held highest market revenue share of XX% in the year 2021
The liquid segment dominated the overall market due to the high consumption rate attributing to its largest market share. Consumers prefer to consume fresh milk, as it contains nutrients such as calcium, vitamins, and proteins. Thus, liquid products contributed more to the market revenue due to their convenience and large consumption. Moreover, the powder segment is expected to expand with the highest CAGR of 18.9% from 2022 to 2029. The rising application of powder form of A2 milk in infant formula is further projected to provide significant growth to the segmental market. With the increasing demand for powder for various applications, such as confectionery, baked desserts, and salty products from the industry. Powder content low moisture thus increases durability and can be stored longer period.
On the basis of packaging form, cartons are mostly used as they are easy to handle and require less space during transportation. Cartons enable to provide a longer shelf life to the product. Thus, owing to this growing preference and propelling consumption, the carton segment accounted for a higher value share in the global A2 milk market size and is anticipated to retain its position during the forecast period.
Geographical Penetration:
Asia pacific is expected to dominate the global A2 milk market in the year 2021
China and India indicated the highest slice in the Asia Pacific, principally due to increasing health awareness. Rising awareness of A2 beta-casein among mothers for their infants, is expected to drive the market growth as mothers are looking for healthy and nutritious milk for their kids, which is equivalent to nutrients in mother milk. A2 milk is easy to digest, so mostly accepted by mothers to their kids. Some of the key players focus on new product launches. For instance, in December 2019, the a2 Milk Company announced the highly successful a2 Platinum infant and toddler nutrition range is now available to buy in South Korea. The launch of a2 Platinum in South Korea follows the recent launch of a2 Milk fresh milk, which is exclusively sold and distributed by Yuhan.
North America is anticipated to witness exponential growth due to growing awareness of digestive health among consumers. People are inclined toward buying milk variants that support their digestive health. Rising demand for organic, low-fat, sugar-free milk is projected to support the market’s growth. Europe is expected to grow due to rising research and development in the region. According to the California research dairy foundation, Europe is leading in cow population producing A2 milk. The emerging trend of clean and natural milk is expected to grow the market.
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Competitive Landscape:
The A2 milk market is fragmented due to local and private label brands. Some major companies include The A2 Milk Company, Ripley Farms, PROVILAC and Freedom Foods Group Limited, among others. Key players in the market are focusing on adopting various strategies such as mergers and acquisitions. For instance, in August 2021, the a2 Milk Company completed the strategic acquisition of 75% interest in Mataura Valley Milk. This acquisition is very useful for the offering supplier and geographical diversification and strengthening relationships with key partners in China. In December 2020, A2 Milk looked to boost Chinese connections with a $250m acquisition. A2 Milk has made a Christmas Eve acquisition of New Zealand dairy company Mataura. This deal helped strengthen its relationship with key state-owned Chinese business partners. In February 2020, Amul acquired heritage foods dairy plant in Punjab for 21.2 Cr. This plant is located at Bhambri village of Fatehgarh Sahib District in Punjab. Some companies divert their portfolio toward A2 milk as consumers’ demand A2 milk increases. For instance, In August 2018, Vinamilk first produced A2 milk in Vietnam. Vinamilk completed the purchase of 79.5 million shares in GTNFoods to increase its holdings to 75 percent in Moc Chau Milk.
COVID-19 Impact:
Negative impact on the global A2 milk market
Despite the booming popularity of A2 milk, a significant decline in the market performance was observed in 2020, owing to the COVID-19 pandemic globally. The pandemic caused governments to impose a lockdown to curb community transmission among people. It has also caused operational challenges for the A2 milk producers. Due to public mobility restrictions and transportation and logistics delays, the milk delivered to the processing plants was less. It caused a shortage of raw materials, leading to lower production, higher prices, and disruptions in the supply chain.
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