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

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Market NewsASEANDuring a recent virtual event Fi Global CONNECT – Regionsin the Spotlight which took place from 12 to 23 April 2021,Siriporn Chunkao, a Researcher at Thailand Institute Scientificand Technological Research (InnoFood) highlighted the growingimportance of plant-based proteins in the production of functionalfood and beverages in the ASEAN region.Siriporn showed in her presentation that from 2012 to 2016,there was a remarkable 440% growth in veganism in this region.And this growing movement is also contributing to the rise inconsumption for plant-based food and beverages.She also presented a chart showing the development of plantbaseddrinks in Asia by categories from 2016 to 2019. It is clearthat functional beverages made from soy saw greatest numberof launches during the study period followed by almond, coconutand oats.Chart 1.0: New Product Launches for Plant-based Drink in Asia(2016 – 2019)Source: InnoFoodPLANT-BASED FUNCTIONAL BEVERAGESGROWING IMPORTANCE OF PLANT-BASED PROTEIN INFUNCTIONAL BEVERAGESAccording to Siriporn, functional foods and beverages have3 major functions i.e. as immunity food, mental food and focusnutrition food and these are targeted for 3 major age groupsnamely kids from the age of 8 to 15 years old; working adultsfrom 18 to 35 years old and seniors aged 55 upwards. For thekids, product innovation focuses on bone development as wellas immune and brain development whereas for the busy workingadults, products focusing on fortified nutrition that support theimmune function like vitamins, proteins and other minerals areof paramount importance. For seniors, functional food/beverageproducers focus on new products that prevent muscle loss aswell as those that provide higher protein.Recent developments also saw the introduction of beverageswith probiotics and prebiotics. One good example is the newC1000 Vitamin Lemon Lactic Acid Bateria L-137 drink whichcombine probiotics with other immune supporting ingredients.Plant-based functional beverages like Oat Milk, Almond Milkand Rice Milk have always been considered as a good calciumand protein alternative to dairy milk. Soy Milk, on the other hand,has a much older history as a functional beverage in the Asianregion.Bottled water, once considered as a simple thirst-quenchingdrink, has also seen innovations and repositioned as infusedwater or as soda water enriched with botanical ingredients.The development of plant-based beverages with health propertiesis still far from maturity, and with the ongoing pandemic, moreproducers are ramping up their production to offer beverageswith immune boosting properties.CHINAMILKINFANT MILK POWDER PRODUCERS FACE CHALLENGINGDEMOGRAPHICS AMIDST FURTHER CONSOLIDATION INCHINAChina’s milk powder producers are facing a challenging marketdue to the country’s declining birthrate. Latest official datashowed that the number of births fell for the 4 th straight year to12 million in 2020.Maternal and baby care businesses reported seeing a fallingnumber of customers to their stores, with a notable impact onmilk powder sales. There were reports on social media thatHoney-lovely store chain operated by Guangzhou-based LexinMother and Baby Products, with over 6,000 branches in China,had suspended its operations.There are a large number of infant milk powder playerscompeting in what is called a stagnant or declining market. As aresult, many producers have resorted to aggressive price cuts tomaintain market share.With the current uncertain economic times, as well as Chineseconsumers becoming more affluent with busy work-lifestyles,analysts expect China’s birthrate to continue to plunge. This isnot surprising as similar trend can be seen in more developedcountries in Europe and the US.To survive in this market, milk producers need to raise theirbrand awareness apart from fortifying their products with addednutrition to attract Chinese mothers who are becoming morehealth-conscious. There is also an increasing need to make theproducts more traceable by giving more information on sourcesand contents in the product packaging.According to Gordon Yang, Senior Vice President of CorporateAffairs at Royal FrieslandCampina China, further consolidationin this sector is likely which will impact on brands ranking belowthe Top 10.Latest market development include the US$2 billion saleof Reckitt Benckiser’s infant nutrition business which sawboth foreign and domestic infant milk producers competing toacquire the stake. This shows that the market is becoming morecompetitive, as domestic producers are now hoping to penetrateinto the high-end (premium) markets in the 1 st and 2 nd tier citieslike Beijing and Shanghai. On the contrary, foreign infant formulabrands like Nestle are accelerating their expansion into the 3 rdand 4 th tier cities, while taking advantage of the online saleschannels (e-commerce).Since the baby milk scandal affecting domestic producers in2008, demand for domestic brands has grown particularly from2017 onwards as domestic players started to invest more onstate-of-the-art technology as well as sprucing up their brandawareness by giving mothers more information on their products’contents and traceability.Euromonitor estimated that the market for China infant formulamilk is nearly US$32 billion accounting for almost 50% of theglobal market. Amazingly, within quite a relatively short periodof time, domestic brands’ shares have skyrocketed from 30%in 2013 to 60% in 2020. Even in terms of pricing, Ministry ofCommerce data showed that the average retail price of domesticinfant formula brands is Rmb 209 (US$32.82) per kg which is22% lower than foreign brands. In 2011, the gap was 39%.The success of domestic infant milk producers could beattributed to their successful penetration in the 3 rd and 4 th tiercities where birth rate is still comparatively high compared to themajor cities in China.Asia Food & Beverages 6
Market NewsCHEESECHINA’S CHEESE MARKET TO REACHALMOST US$2 BILLION BY 2025With the growing popularity of cheeseamong Chinese consumers whomincreasingly view it as a nutritious snackfood, GlobalData projected this market togrow rapidly from US$1.06 billion in 2020to US$1.96 billion by 2025.Cheese is a natural source of calciumand protein, and these 2 nutrients areviewed as important for a child’s heightand muscle growth. In fact, most cheeseproducts that are aimed at children comewith high calcium and protein taggingand in a stick-shape or even on a stick(like an ice lolly) for easier child-friendlyconsumption.China has a huge growth potential asits average cheese consumption is stillrelatively low compared to neighbouringcountries like Japan and South Korea.Latest data from OECD showed thatChina per capita consumption of cheeseis 0.30kg, far lower than Japan’s 2.35kg.Demand for cheese in China is alsogrowing rapidly for institutional and foodservices, with the rapid growth of fast foodchains serving pizzas and burgers withcheese as an important component.GlobalData research showed that in thepast few years, demand for cheese hasaccelerated in China and this translates togood news for producers of cheese andrelated products.WEBINARS ON-DEMANDWatch Webinars post-videorecordings atwww.asiafoodbeverages.comIn May 2021, AFBR has launched our ownwebinar/web events page on our websitewhere you can watch post-webinar videorecordings directly by a few click of thebuttons, or via registering if required by theorganisers.With the current pandemic which limitsbusiness travels as well as exhibitions,AFBR aims to provide readers with as muchinformation relating to the food and beverageindustry, by posting past, current and futurewebinars/web events on our website landingpage.Past webinar topics that you can watch andnow available online include those relatingto plant-based meat, real meat, chocolateconfectionery, dairy, sustainability, probiotics etc.You can also register for the upcoming HPPInnovation Week organised by Hiperbaric.This event on High Pressure Processing(HPP) Technology will take place from 14to 18 June 2021. The online conferencewill bring together manufacturers, retailers,food service and packaging companies,regulatory, academic leaders and others inthe HPP industry to discuss the latest trendsand innovations.To watch or register for the webinars, go toour homepage at www.asiafoodbeverages.comIf you would like to share your web eventsor webinars to the business community inthe F&B industry, please feel free to send usan email at info@asiafoodbeverages.com7 Asia Food & Beverages
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