Asia Food & Beverages Report (May/June 2021 issue)

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Investment NewsSwiss craft beer producer eyeinghuge China marketAsia Food & Beverages 14BEERSwiss traditional brewery Appenzeller Bier,known locally for its specialty beers, is lookingto enter China market amidst the pandemic.Established since 1886, Brauerei Locher AG,the company behind Appenzeller Bier, has 6%share of Swiss beer market and is the country’sleading independent brewery.Aurele Meyer, Managing Director of BrauereiLocher said, “We recognise that China isrecovering very quickly, much faster than we dohere in Europe, so this is a great opportunityfor us that the market is getting better muchquicker than here in Switzerland.”The brewer participated in China InternationalConsumer Products Expo in Haikou held from7-10 May to gain further insights on the hugemarket.Appenzeller Bier is brewed with hops, maltand spring water from the Alpstein massifin Switzerland. The brewery also producesunusual ‘innovative’ varieties such as harvestmoon beer, oakwood barrel beer or rice beer.According to Meyer, “We have started witharound 6 different types of beers in China andwe would love to launch new products as we doalso in our home market.”He added, “We also see a lot of opportunitiesfor our specialties, especially for the nonalcoholicbeers, for example, with apple andpear juice from the region or for our ginger beer,which is very well accepted in China. We alsosee potential in our craft beer, which you cannotfind in the international market.”The brewer is planning to sell both online andin physical stores in China in the future.The global market for craft beer has animpressive CAGR of 18.9% from 2020 to 2027with an estimated market size of US$164.8billion as of 2020, according to Research andMarkets.SAUCES/CONDIMENTSKraft Heinz to up capacity,innovations for both Western, LocalSauces in China marketUS-based food conglomerate, Kraft HeinzCo, is localising innovations and expandingits product offerings to penetrate China’scondiment market.The company, which also owns Chinesebrands Master and Guanghe, has investedUS$100 million in a new factory last year inYangjiang, Guangdong province, to boostcapacity for Chinese sauces. The 2 brands,currently popular only in Guangdong and Fujianprovinces, are slated to go national this year.Rodrigo Wickbold, President of Kraft HeinzAsia said that in the next 2 years, the companyis going to transform its portfolio offering arange of both local and western products.Meanwhile, the company also plans to boostinvestments in e-commerce, especially in infantfoods and cereals, and expects to scale up itssauces business. Wickbold said that Westernsauces penetration in the country is still lowat 40%. This year, the company is expandingproduction capacity for its Western tomatosauces and ketchups, with new factoriesplanned in the medium term.China offers a huge US$40 billion marketfor sauces and condiments and is one ofthe company’s priority markets as Chineseconsumers seek high quality, healthy foodproducts especially during the ongoingpandemic. In-home consumption of sauces,condiments and spreads grew during the periodas people spent more time at home cooking.Wickbold relocated to China from Singaporelast year to set up the company’s Asiaheadquarters.Kraft Heinz is building a database of recipesand plans to tap into the growing demand byencouraging people to experiment differenttypes of cooking at home. The company haslaunched recipes for Western food, includingvideos showing an easier way of usingingredients found at regular supermarkets.It has also worked with the food services(restaurants) on new recipes.ALTERNATIVE PROTEINSBelgium investment group seeksto invest in high-potential ChinaventuresVerlinvest, a Belgium-based investmentcompany backed by the family that controls beergiant AB InBev, is planning a big push into Chinawith the aim of building the next generation ofsuccessful brands and entrepreneurs in thecountry’s food and beverage (F&B) sector.Verlinvest is owned by the De Spoelberchfamily, one of the 3 Belgian families thatfounded Interbrew and AB InBev. It managesabout US$2 billion in funds.Verlinvest Executive Director Raphael Thiolonsaid, “We are very keen to back Chineseentrepreneurs, helping them build newsuccessful food and drink brands of tomorrow.”Verlinvest aims to build on its successfulexperience with Swedish-based Oatly, theworld’s largest oat milk producer which hasmade tremendous success in China market.Oatly’s sales in China has contributed toaccount for 13% of its global total since itentered the market in 2018.Thiolon added, “We are seeing excitingstructural changes with Chinese consumersincreasingly drawn towards healthier nutrition,cleaner products and natural functionality.China offers fantastic growth opportunities.”Verlinvest’s Chinese investments will focuson services, packaging and alternative proteincompanies in the F&B sector.Verlinvest current investments in China arerelatively small compared with those in otherAsian nations like India, as such it will speed upits participation in the country.Verlinvest currently has investments inNasdaq-listed 111.com, a Chinese onlinepharmacy and health services platform. It alsoprovides nursing care services in the Yangtzedelta area through a joint venture with ChinaResources. The firm has a strong track recordof investing in consumer brands and digitalplatforms, such as Vitamin Water, which wassold to Coca-Cola for more than US$4 billion,and Lazada, an e-commerce platform inSoutheast Asia that was later sold to AlibabaGroup Holding.MALAYSIAJohor seeks investors to developJemaluang Dairy ValleyDAIRYThe southern Malaysian state of Johor will bedeveloping a new 275 hectare industrial park,Jemaluang Dairy Valley, in Mersing for theproduction of fresh dairy products.Government-linked company, JohorCorporation (JCorp), has already been taskedto identify strategic partners to invest in theproject, which is expected to require a minimuminvestment of RM100 million (US$24.2 million),with infrastructure taking up 70% of the capital.Johor’s Chief Minister Datuk Hasni Mohammadhopes the new investment will enable Johor tocome up with its own fresh milk products thatare comparable or better than existing productsin the market such as Farm Fresh, which is acollaboration between Khazanah Nasional Bhdand Holstein Milk Company. Hasni also addedthat theinvestment will also produce 20 new satellitefarms that will give a wider economic impactbeyond Mersing to cover Kota Tinggi and PasirGudang as well.Dutch Lady engages RoyalHaskoningDHV to build new milkfactoryDutch Lady Milk Industries Bhd, a subsidiaryof Royal FrieslandCampina, has contractedRoyal HaskoningDHV to develop its newenvironmental-friendly and innovativemanufacturing facility in Malaysia.Royal HaskoningDHV is an internationalengineering and project managementconsultancy. The company’s scope willinclude design, procurement, constructionmanagement, commissioning and start-up ofthe facility, as well as assistance in the transferfrom the existing factory to the new state-of-theartfacility at Bandar Enstek in Negri Sembilan.According to Dutch Lady’s ManagingDirector, Tarang Gupta, “Quality, safety, health,environment and sustainability would be at theheart of the new factory’s design.”The new facility will also boost NegriSembilan’s economy and competitiveness toattract foreign investments in the future.FrieslandCampina, through Dutch Lady, aimsto help Malaysia achieve a fully sustainablemilk supply. Dutch Lady has also establisheda strategic partnership with the VeterinaryServices Department to help dairy farmersenhance the quality and volume of cattle rawmilk. Malaysia aims for 100% self-sufficiencyfor fresh milk production by 2025 as part ofthe National Dairy Industry Developmentprogramme. From 2010 to 2020, milk productionin Malaysia had grown rapidly from 27 millionlitres to 42 million litres.Dutch Lady had been operating in Malaysiafor 58 years and is well-positioned to bethe conduit between Malaysia and theNetherlands to facilitate knowledge transfer.The collaboration will involve Dutch Lady’sdairy development programme (DDP) and theFarmer2Farmer (F2F) programme. Dutch Ladyis the first and only dairy company in Malaysiato actively initiate, lead and develop the DDP.BAKERY/CONFECTIONERYSPC Group to use Malaysia as itsproduction hub for expansion inASEANSouth Korean food and confectioneryconglomerate SPC Group is planning to expandfurther in Southeast Asia by building a globalproduction facility in Malaysia.Apart from launching its popular bakery chainParis Baguette in Malaysia, the conglomerateplans to pursue various businesses in the regionsuch as supplying raw materials for SPC GFSCo Ltd, SPC Group’s subsidiary specialising infood distribution, and launch Samlip GeneralFood Co Ltd’s local business.In the past, SPC Group has used Singaporeas its advanced base to enter Southeast Asianmarkets such as Vietnam and Cambodia. Totake a step further, the South Korean food andconfectionery maker has chosen Malaysia tofurther grow its presence in Southeast Asia.Malaysia is commonly considered as a hub forentering the Halal food market, which sells foodproducts that Muslims can consume and use.SPC Group hopes to expand its business inSoutheast Asia, its 3rd major market after theUS and China.
PLANT-BASED FOODNestle setup production site for ‘Halal-certified’ plant-based meat productsin MalaysiaAs the focus had always been towards Singapore in the past particularly for plant-basedinvestments, Nestle, one of the world’s largest food manufacturers, has taken a different step byinaugurating a 6,000 sq.metre ‘Halal’ production site for plant-based burgers, schnitzels, mince andthe likes in Malaysia.The new RM150 million (US$36.2 million) facility at Shah Alam has the capacity to produce 8,000tonnes of plant-based food annually and will supply both food services and retail in the Asian regionwith the new Harvest Gourmet brand. It is also equipped with state-of-the-art processing machineryand packing lines. It is expected to be fully operational in early 2022.Harvest Gourmet has already inked deals to supply global and regional restaurant chains includingElement Fresh in China, KyoChon in Malaysia and Carl’s Jr in Singapore. It will also supply growingdemand in retail, starting in China with Tmall and Hema.Nestle is also making sure that its local products are designed for the Asian taste and local cuisineapplications such as dumplings, stir fry, braising, katsudon, and more.Chris Johnson, Nestle CEO for Asia, Oceania and Africa said, “We’re really going ‘beyond thebun’ to capture local tastes and convince people to try plant-based options. We believe that themore people embrace plant-based food, the better for them and the planet. That’s why we are atthe forefront of this shift and investing for the future.”Nestle has invested aggressively into the plant-based space in Asia which includes its 2 productionfacilities in Tianjin, China and its Halal-certified plant at Shah Alam, Malaysia.In addition, Nestle has around 300 R&D scientists, engineers, and product developers dedicatedto the research and development of plant-based products. To adapt the products to Asian consumerneeds, the company leverages its R&D centers in Singapore, Beijing, China, and India usingregionally sourced ingredients and local recipes to develop great-tasting yet nutritious products.Nestle is hoping to lead what it called a ‘quiet food revolution’ in Asia in whichmore and more Asians are choosing plant-based options for a healthier lifestyle withless impact on the planet. A recent survey by GlobalData showed that over 40% ofrespondents in countries across the Asia and Oceania region said they were shiftingtowards more plant-based food. Also 11% are now opting for a purely vegetarian orvegan diet, while a third of the respondents said that they are cutting down on theirmeat consumption by going into a ‘flexitarian’ diet.INDONESIAInvestment NewsHALAL FOODIndonesia to acceleratedevelopment of Halal IndustrialEstatesWith the booming global Halal foodmarket, the Indonesia government hopes toquickly capitalise on this by accelerating itsdevelopment of Halal industrial estates (KIH),including the one established in the CikandeModern Industrial Estate in Serang district,Banten.Indonesia’s Industry Minister Agus GumiwangKartasasmita said the KIH ‘Halal Modern Valley’which is being established in the CikandeModern Industrial Estate, has been designedwith systems and facilities to help developthe industry that produces Halal products inaccordance with Islamic principles. It is alsothe first integrated zone and the largest inIndonesia, covering 500 hectares area whichinclude facilities for integrated industrialprocesses, an R&D center, food technologypolytechnic, Halal quality management system,sharia funding institution, port, and customsfacilities amongst others.The KIH is developed by PT Modern IndustrialEstate over 5 years in three stages started fromlate 2019 and once completed in 2024, will beIndonesia’s international Halal hub.KIH is working closely with the Halal ProductAssurance Organizing Agency (BPJPH) andthe Assessment Institute for Food, Drug andCosmetics of the Indonesian Ulema Council(LPPOM-MUI) to develop and design Halalindustry integration at the estate.Cikande Modern Industrial Estate has alsosigned an agreement on establishing a globalhalal network with Cordoba Halal Park, Spain;Iskandar Halal Park, Johor, Malaysia; and,the Penang International Halal Hub Penang,Creative Sweetness SolutionsSweegen’s sugar reduction solutions are customized to meet consumerpreferences for local taste and sweetness profiles.Using proprietary next generation stevia as a foundation, we incorporatethe right combination of proprietary flavors and best-in-class texturantsto create cost-effective solutions for your toughest sweetness challenge.Non-GMO Nature Based Ease Of Use Cost Effective Label FriendlyMake your next sweetinnovation with Sweegenwww.sweegen.com | sales@sweegen.com15 Asia Food & Beverages
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