Health is key driver of production

The largest market for food and drink, Asia Pacific represents more than 40% of the world’s retail sales. Its growing preoccupation with health and wellness is a major influence on product development.

IN 2014, the food and beverage industry in Asia Pacific will continue to gain strength, carrying on from the momentum of recent years. Projections of dynamic growth and low production costs attract suppliers and manufacturers from other regions to build their networks and to expand their capability particularly in ASEAN countries, as well as in China and India. Closer to their markets, companies can easily take part in the rapidly expanding food industry which is worth in excess of $2.75 trillion.

According to Frost & Sullivan, the market for food products in Asia is divided into cereals (18%), dairy (14%), fruit and vegetables (26%), meat (29%), fats & oils (6%), and sugars (7%). The main growth areas are beverage, dairy and fortified products.

With 618 million consumers, the ASEAN has a gross domestic product (GDP) per capita that has tripled from 1994 to 2011, with food accounting for a major share. Malaysia’s GDP which was forecast to grow 4% in 2012 is expected to increase by 5.6% between 2013 and 2016, notes the Economist Intelligence Unit. By 2015, the local food and beverage retail industry, will reach $21.17 billion. The packaged food industry is set grow to $5.9 billion by 2016, from $5.5 billion in 2011.

With one of the region’s strongest wage growth, Indonesia offers ample opportunities for food companies in the coming years. The country has the highest consumer spending at 61%, comparable to developed countries, according to the McKinsey Global Institute. Food consumption is forecast to increase from $69 billion in 2011 to $109 billion by 2015.

In the Philippines, the consumer expenditure on food and non-alcoholic beverages amounts to approximately $50 billion, making the country the third-largest ASEAN market for processed and packaged foods. Food is considered the highest household expenditure, accounting for an average of 35%, says the Agriculture and Agri-Food Canada (AAFC).

In Thailand, food consumption increased mainly due to the rise in the country’s tourism in 2013. As one of the world’s top 10 food producers, it sees exports rising by up to 7% in 2014 from 5% this year. In 2012, exports to Asia, the Middle East and the EU reached $31 billion. The Thai Chamber of Commerce sees full-year growth of 3% for the country’s food industry this year.

Health-conscious consumer

The target consumer is younger, and in general, the middle class is the force behind the region’s economic growth. Over the years, their choices have been changing, and food companies have to keep up with demand. But even as Asians have diverse taste preferences, the need for healthier products is one that is shared by consumers across cultures and age group. This is brought on by a greater awareness of the effects certain ingredients, packaging and processing methods have on well-being as well as on the environment. Moreover consumers are going over data on product labels before making a purchase. Knowing what their foods are made of and how these are processed are affecting their choices more than ever, and having several options on supermarket shelves encourages their desire to stay healthy and responsible. Demand for healthier and natural options will also remain high in an attempt to control the rise in number of diabetes, cardiovascular diseases and obesity cases in the region. Studies released by tTienda outlet deportiva