Flavouring companies looking to expand across Asia should forget China. That’s the point San-Ei Gen’s David Tan was making as he spoke to FoodNavigator-Asia during Fi Asia-Thailand in Bangkok, adding that the youthful markets of Indonesia and the Philippines are where the future lies.
Tan, the Japanese company’s sales director at its Southeast Asia base in Singapore, had been explaining how a 101-year-old business that has until recently been unknown outside its homeland was making a name for itself in other countries.
Future is for the young
“In Indonesia, 50% of the population is under 30, and in our business, young people are the future,” he said. “With any new launch there is a new opportunity, and the flavour industry is all about fashions, about new trends.
“With more young people willing to try new flavours, there will be more new launches. The market leaders will die and the newcomers will have the opportunity to participate in new markets. It's as simple as that.”
In comparison, the Chinese population is aging, and holds far less potential. “Launches in China in the future will be slower, and it’s not an easy market,” continued Tan.
“When you look at Asia, it is not all China. China is half; the other half is outside China. Obviously, companies want to grow, but where will this growth come from? You can look at Europe, but they are in the shit. You look at America, and they aren't growing. If you want to move into Asia, you don't look at China, you look at Southeast Asia.”
The key is R&D
Warming to his theme, he urged flavour companies to innovate in places like Indonesia and the Philippines because the younger generation is willing to try new tastes.
“If you dare to create, the young people will try it. If they like it, they will come back. Of course, your R&D people have to be smart and create something that is nice for it to gain acceptance.
“If your R&D people are smart enough, they will create something appetising and trendy.
“You have something new, young people will be more than willing to try it—they are seeing the world right now, and the future belongs to them.”
This was not the first time, during the first day of Fi Asia-Thailand, that we have spoken to industry players who share Tan’s opinion that Southeast Asia was one of the food industry’s driving forces at the moment.
Obviously, the show focuses on the region, so many exhibitors will be partisan in this regard. But perhaps as the formerly booming Indian and Chinese economies slow, burgeoning Southeast Asia is on hand to take up the slack.