According to a report by Frost & Sullivan, the region’s food industry is among the fastest growing in the world. This comes as a result of increased urbanisation, a growing need for health and wellness solutions and greater sensitivity by consumers to food safety.
"The [Asia-Pacific] food industry has been growing persistently even through the 2008/2009 economic downturn… [and] is projected to be a key economic driver," said Natasha D'Costa, regional research manager at Frost & Sullivan.
"As the region's food industry dominates, it is expected to experience staggering growth. The key product growth areas within the Asia Pacific will be in beverages, dairy and the fortified commodities markets.”
Different beverage focus
Whereas in the West, where growth is strong in the alcoholic and carbonated soft drink sectors of the beverage industry, the Asia-Pacific region is already experiencing a boom in non-alcoholic and fortified beverages, while key growth areas will be in bottled water, juices, and ready-to-drink tea and coffee.
In countries like Vietnam and Indonesia, demand for ready-to-drink tea is growing strongly, presenting a huge market opportunity in flavoured and green teas. Bottled water is also experiencing huge growth, particularly in Indonesia, Thailand, and the Philippines. According to D’Costa, water scarcity and the lack of clean water supplies are the main factors that drive this market.
Australia, however, is not part of this water trend, on account of its ample clean supplies and rising awareness among consumers there of the long-term environmental impact of bottles.
Frost & Sullivan, the dairy industry will grow faster in Asia-Pacific than in mature markets due to the increasing awareness of health benefits associated with dairy consumption.
“China is the forerunner in this demand as its younger population increasingly incorporates dairy into its daily diet,” said D’Costa.
“India is the world's largest producer of milk with most of its production used domestically as South Asians typically consume a dairy rich diet. There is a growing demand for fortified dairy products as manufacturers aim to add value to this commodity.”
In Asia Pacific, the probiotic cultures market is continuing to grow strongly, with revenue projected from US$310 million in 2011 to US$523 million in 2018.
Ageing populations in Japan, Australia and Singapore will drive this growth, along with the increasing affordability of probiotics and greater consumer confidence that has come from research validating the health claims of improving gut health and immune system.
The growth of skim milk powder markets, especially for infant nutrition in Thailand, China and Singapore, will define the dairy industry’s boom, although the demand for cheese is also predicted to grow, particularly in South Korea and Japan.
Fortified foods is presenting increased product opportunities with more governments aiming to introduce greater fortification in areas where there are micronutrient deficiencies, especially in terms of iodine, iron and vitamin A. The Philippines, for example, has introduced iron-fortified rice, while China promotes fortified soy sauce and India supplies wheat fortified with iron.