Food & Beverage Market
Functional foods and drink are in demand globally, driven by individuals who are becoming aware of the importance of a healthy lifestyle. Although functional foods and drink are typically more expensive than conventional food and beverages, global sales were up 3% in 2013, reaching a healthy US$749.6 billion. This value is equivalent to 34% of the total beverage and packaged food sales globally, according to Euromonitor International.
Although there are many emerging markets that are driving the growth in the global functional foods and drink market, Asia continues to be the top player in the market. Euromonitor International’s Health and Wellness data shows that out of the top-10, fastest-growing countries in Health and Wellness in 2013, five of them were in Asia. China—including Hong Kong—was first on the list, followed by Vietnam (3rd), Indonesia (5th), Thailand (8th), and India (10th).
Asia saw double-digit growth in medical health in 2011, increasing consumer awareness that prevention is better than cure. In China, pre/probiotic yogurt consumption is becoming increasingly popular, taking up one-quarter of the total pre/probiotic yogurt sales in Asia. Although functional foods and drink are becoming increasingly popular in Asia, they are still largely targeted at the higher income group in many countries. The middle & low-income consumers are very interested in drinking and eating well. Therefore, in order to expand the market further, companies will have to reduce prices and look into expanding their consumer segment.
Asia has a surging population over the age of 65 that have not been fully addressed when it comes to marketing functional foods and drink. Matthew Incles—market intelligence manager at Leatherhead—stated that, in particular, there are opportunities for businesses and developers to prosper if they target the aging population. Functional products that include fortified fatty acids, such as omega-3 and omega-6, would prove to be extremely popular in Asian markets due to the aging population.
All-in-one products with multiple functions incorporated in their product have not been properly introduced to Asia and will likely become very marketable as long as such products can be integrated into the consumer’s daily budget. Saving consumers time and money by incorporating many different key ingredients into one product will benefit manufacturers and retailers. Focusing on packaging could also be a useful tool when integrating into the Asian marketplace. Developed Asian countries like Singapore, China, Hong Kong, Taiwan, and Japan are attracted to family pack size or multi packs to push consumers to consume. However, developing countries like Indonesia and the Philippines would benefit from single-serve or smaller packaging so that the cost per purchase is lower, thus fitting into their daily or weekly budget.
The Asian functional foods and drink market will likely move towards polarization. The existing consumers will likely grow to become more sophisticated, willing to spend more money for innovative, new products. At the same time, we will likely see existing functional foods and drink products being repositioned to target the middle-class consumers. Because Asia is realizing the importance of eating and drinking well, it is likely that the market will continue to thrive as long as the manufacturers and retailers ensure products fit into the consumer’s ideals and budgets.
