We created this report a couple years in anticipation of introducing an imported brand of Sweetened Condensed Milk (SCM), which is hugely popular in Myanmar due to the teashop culture and is a major contributor to the alarming rates of diabetes. The only thing that is recent is the key recommendations section at the end.
The market here is very competitive. Some suppliers even give gold to tea shops that hit certain targets. I even had a tea shop request that I do about $1000 in renovations to his tea shop on the promise that he would buy $100 of SCM per month.
Our Strategy is to quickly penetrate and dominate the market for sweetened condensed milk through simultaneous multiple channel penetration to create the perception that the product is already well established in Myanmar as a trusted product for quality, flavor and price.
Sweetened condensed milk is the preferred milk to be added to coffee or tea in Myanmar. Also a popular treat in Asia is to put SCM on toast or pancakes like jam or syrup. Nestle has even produced a squeeze bottle similar to Smucker’s jam squeeze bottles for this very purpose. Condensed milk is also a major ingredient in many Indian desserts and sweets which are popular in Myanmar.
Without a doubt, the largest proportion of milk is consumed as sweetened condensed milk in tea in Myanmar (although other sectors, such as bakery and confectionary are growing). SCM is bought in plastic bags, card board boxes and plastic bins. Tin cans of are also ubiquitous. The total urban milk consumption can be estimated at 1.5 million metric tons per year based on an assumed daily consumption of 1.5 cups of tea with 0.08 kg condensed milk and half this amount of evaporated milk. Myanmar imported 18 081 MT of SCM in 2010/11 as well as 5,081 metric tons milk powder and 18,577 metric tons evaporated milk (nearly $48 million USD). Tea shop customers are willing to pay higher prices for tea with imported condensed milk, such as Dawn and OK. A tea shop in Mandalay uses about 50g of SCM, equal to about 130 kyats, per cup of tea. Singapore is the main source of SCM imported SCM along with Malaysia and Thailand.
There is a large variety of imported and domestic brands in the Myanmar marketplace. We conducted research and found the following:
The largest selection of SCM are the imported brands, which are coming from Thailand, Singapore and Malaysia (predominantly). The smaller sized My Boy (Thailand) is priced at 760 kyats per can (361 ml) or roughly 2/1 Kyats per milligram. Dawn and Tea Pot came in the highest at 900 kyats for 380 mls or 2.3 kyats per milligram. Falcon, Marigold and OK were somewhere in the middle. When it comes to SCM, local consumers are not nearly as price sensitive. Tea shop operators indicated three influencers in shaping their SCM purchasing decisions: First was flavour and smell because it was important for them to build a reputation among their clientele for good quality tea. Second was thickness. They prefer the thicker Dawn brand over Ok, which was too thin. And third was price.
One of the best selling dairy products in Myanmar, OK Condensed Milk and Evaporated Milk is a product of Malaysia Diary Industries (Pte) Ltd., the first company in Singapore to produce sweetened condensed milk and evaporated milk, which is a leading dairy and beverage company in Malaysia and Singapore.
Prices for locally produced SCM are considerably lower, along with the quality. Accordingly, Disko is the lowest priced and purchased by consumers based on price alone. Disko cost 580 kyats for a 435 ml or 1.3 kyats per milligram. There is a local distrust of anything domestic, so even though the local products are cheaper, consumers will still pay higher prices for better quality SCM and go to tea shops that advertise imported brands. Alpine is another recent domestically produced SCM. The flavor and quality of Alpine is very nice and competitive with imported brands.
Key Recommendations for Market Entry:
- Make sure you have a strong distribution system with channels reaching into smaller towns and villages.
- expect to spend a lot of money on buying your way into tea shops. You will need to spend money on umbrellas and store awnings (at least $1000 per store). In return, tea shops will sign contracts for 1-year or more.
- If you run consignment, expect that the tea shop will order from other suppliers to delay paying your last invoice. Make sure you have exclusivity in your contract and check up on tea shops from time to time.
- Get a stall in the wholesale markets, especially Naung Pyin Leh Zay downtown.
- Make sure your product, if it is imported, is clearly perceived as an imported product.
- Its good to work with some local sub distributors or partners and reward them generously. Introducing a new product into this market is hard work.