Dairy Products Expenditure Pattern In Vietnam: Effects Of Household Characteristics On Expenditure For Dairy Products

       Dairy  production  and  trade  is  on  the  rise  on  a  global  scale  (Beghin,  2006; More,  2009). Similar to many Asian countries, Vietnam’s economic situation has improved and thereby the living standard of its population has increased. For this reason Vietnamese have shifted from staples  and  nowadays  pay  more  attention  to health  aspects  in  their  food  choices.  As  a consequence, demand for high protein and energy dense food has  increased, especially dairy products such as milk, cheese, and yogurt (Jaccar, 2008; Pingali, 2007; Dong, 2006). In recent years,  the  Vietnamese  dairy  industry  has  become  one  of  the  fastest  growing  in  the food industry  in  Vietnam.  Vietnamese  dairy  demand  has  increased  rapidly  over  the  last  years (BMI, 2011; Cuong and Nga, 2011). According  to  report of Business Monitor  International (2011), Vietnamese milk  consumption  has  been  driven  by  increasing  domestic  demand,  as well  as  rising  income.  In  fact, milk  consumption per  capita  in Vietnam  has  doubled  in  the period  from  2000-2009  to  12  kg/year.

        Euromonitor  international  (2013)  reported  that Vietnam’s milk products market  is potential and  strong. The  young population  continues  to create  a  stable demand for consuming  dairy  products, while  awareness  of  consumer  about health benefits related  to milk  products  is  increasing,  especially  the with  older generation (Euromonitor  international, 2013). However,  compared with  regional countries, Vietnamese per capita consumption is still relatively low (Anh et al. 2010).  The price of  foreign milk  in Vietnam  is one of  the highest  in  the world  (Tuan et  al., 2013; BMI, 2011). The price of  imported milk  is also higher  than  in other developing countries  in the  region  such  as  Thailand, Malaysia  or  Indonesia  (Tuan  et  al.,  2013). Vietnam  mainly depends on imports to meet domestic demand for dairy products. The country is the 20th most important  importer  of  dairy  products  in  the  world  and  it  is  foreseeable  that  the  demand continues to rise. Vietnam’s dairy production is able to provide only 22% of domestic demand (Cuong and Nga, 2011). Most of imported dairy products are UHT (Ultra High Temperature) milk, yogurt, condensed milk,  and  formula  (GSO, 2010). This  implies  that Vietnam’s dairy products market has high potential  for  future growth, both  through domestic production and imports (Dong, 2006; Cuong and Nga, 2011; Euromonitor international, 2013).  High demand for milk and milk products  in Vietnam also  creates opportunities  to investors. Yet,  it  is not clear which factors and the level of the individual household effect on expenditure behavior of dairy products.  

       Several  studies  used  household  data  to  examine  socio-economic  and  demographic  factors affecting food consumption and household expenditure on food products. Su and Yen (1996) utilized the data of the 1987-88 US Nationwide Food consumption survey to investigate pork households’ consumption in the United States. Mihalopoulos and Demoussis (2001) used data from the 1993–1994 Household Budget Survey to analyze factors effecting on probability of participation and expenditure in the market for food away from home in Greece.   Thiele and Weiss  (2003)  analyzed  consumer  demand  for  food  variety  in Germany  by using Consumer Panel Research Data  that  record  the expenditure behavior of households  for certain product groups.  Ates  and Ceylan  (2010)  examined  the  effects of socio-economic factors on  the consumption  of  milk,  yoghurt,  and  cheese  using  their  household  survey  in  Turkey.  

       In addition, many studies have also been found in Vietnam using data from household survey to analyze  food  consumption  pattern. Minot  and  Goletti  (2000)  estimated household  food demand in Vietnam based on data of Viet Nam Living Standard Survey 1998. Le (2008) used data  of  VHLSS  2004  to  investigate  food  consumptions in Vietnam  that  focused  on  three categories of food:  rice  food,  non-rice  food  and  meat/fish.  Meat  consumption  pattern  in Vietnam  is  analyzed  by  Phuong  et  al. (2014)  by  using  VHLSS  2010  data.  However, no specific study is found that has paid attention on household’s expenditure on dairy products in Vietnam. The major objective of  this  study  is  to  identify  and examine factors  that  affect Vietnamese households’  consumption  behavior  for  dairy  products.  The  study  contributes  to the understanding of Vietnam’s dairy products consumption patterns. Specific objectives consider in this study are: 
-  To examine the factors affecting the decision to consume dairy products. 
-  To determine the drivers of expenditure on milk products.