Driving milk consumption in Malaysia

EXCERPTS from the interview with Dutch Lady Milk Industries Bhd managing director Tarang Gupta.

Dutch Lady is a leader in terms of innovations in the milk industry, being one of the first players in the local market to create new milk flavours. What made Dutch Lady strive for product innovation?

Dutch Lady plays an important role in trying to grow milk consumption in the nation.

Our innovations have always been backed by facts and science.

For example, a South-East Asian nutrition survey on children below the age of 12 shows that almost one in two children in Malaysia has a Vitamin D deficiency.

This was probably due to a change in lifestyle, where kids are staying indoors more than often now.

The deficiency in Vitamin D then leads to a lack of calcium absorption, which results in malnutrition for every one in five kids and stunted growth for every one in four kids.

We then innovated our products based on that study, increasing the levels of Vitamin D through fortification via milk consumption and engaging with the Education Ministry (MoE) to start the “Drink, Move, Be Strong” campaign in schools.

The inherent purpose of this campaign is to make children drink two glasses of milk per day as recommended by the Health Ministry and carry out physical activities under the sun.

We are also among the first few dairy companies to take proactive measures in reducing sugar in our products.

We halted production of sweetened condensed milk four years ago and launched our 0% sucrose growing up milk powder.

This was then followed by our flavoured milk, whereby Dutch Lady’s chocolate milk has the lowest level of added sugar in its category, at 3.6g of sugar per 100ml.

We also leveraged more on lactose instead, which is the healthier sugar component, bringing the mouth feel and reducing the added sugar content.

Our purpose is to nourish by nature, using as much natural products as we can.

How does Dutch Lady drive the demand and consumption of milk in Malaysia?

As Malaysia is not traditionally a milk-consuming country, we want more people to consume milk at a higher frequency.

If milk gets to be a part of any occasion of consumption, irrespective of it being plain or flavoured, that occasion becomes healthy due to the milk’s nutrients and fortification with high levels of calcium.

With the objective of increasing the penetration of milk, our innovations are based on three key pillars – Excite, Educate and Energise.

Through Excite, we make drinking milk fun by partnering with Disney to create milk packs with Disney cartoon characters to encourage children to drink milk.

We also have limited edition Emoji packs that are animated upon scanning of the QR code.

Additionally, in mid-quarter two this year, Dutch Lady launched the limited edition chocolate caramel flavoured milk drink, that was geared towards teens and tweens.

It was so well received and now we are contemplating to make it a regular flavour.

The second pillar, Education, is where we educate consumers on the importance of milk.

Globally, milk is a main component of breakfast.

However, changes in lifestyles have resulted in milk slowly losing its relevance during breakfast.

The third pillar, Energising, relates to improving our consumers’ lifestyle, through the aforementioned DMBS programme.

Every innovation is not just in line with improving the health status of Malaysians but also the lifestyle quality, with a focus on the younger generation.

What are some of Dutch Lady’s strategies and plans for 2019?

We will continue to drive the consumption of milk, and innovate accordingly so that consumers get the best products in accordance to their needs.

We want more people to consume milk more number of times, and we will do so by keeping to our three pillars.

This includes continuing to work with MoE to improve the country’s nutrition status and also tap into the kids’ taste buds at an early age so that they get more “milk savvy”.

In terms of export markets, it is still a relatively small segment.

Going forward, we shall explore the export of milk powders, which are low volume and high concentration.

We are already exporting to Singapore, and recently began exporting to Pakistan, banking on our halal certification.

We do acknowledge that Malaysia has a high potential to be a global world halal export location, thanks to its world halal hub status and stringent Jakim regulations.

That is part of our consideration but we have not formulated any concrete plans.

With initiatives well in place to grow the local milk production, what growth rate are you expecting going forward?

It takes a lot of hard work in training the farmers, and it is difficult for me to give a committed number, but the intention is to see a volume growth of 10% to 15% yearon-year.

If we (both the government and Dutch Lady) can grow that volume, then we will be able to double the amount of milk in the country within the next seven to eight years.

Currently, the local milk volume amounts to about 3.5 million litres per year.

Looking from a business point of view, if we are able to grow the local milk volume, it will then benefit the country, agricultural industry, and even Dutch Lady.

We pay more premium to the farmers as local milk purchased is more expensive than the milk sourced globally.