‘Main priority’: IGH highlights localisation to be major Asian market challenge as it gears up for expansion

The Spanish company has admitted that ‘a lot more market research’​ is needed for the region as localisation is a big focus for the markets in this part of the world.

“We already have some presence in some Asian countries such as Vietnam and Malaysia, and are also going into China, Thailand and the rest of Asia. Basically, we are looking to expand into Asia as a priority,” ​Marina del Estal from IGH Marketing told FoodNavigator-Asia​ at the recent Fi Asia Thailand 2019 show in Bangkok.

“Localisation is a big thing in Asia, and the flavours here are very different from those in Europe, so we have to do a lot more market research here.​

“For example, some flavours we are accustomed to being popular in Europe may do very well in a certain Asian country such as Japan, but other Asian markets [like India] may not like it, so we really have to investigate properly.”​

An example of a flavour which would require further research and investigation before an Asian launch can be considered is the company’s ‘star flavour’ in Europe, a biscuit flavouring based on traditional Spanish Maria biscuits, which is common in yoghurts and other snacks over there.

“IGH is popular for our sweet flavourings such as strawberry and banana, but the biscuit flavouring is very much our ‘star flavour’,”​ said del Estal.

“Although it is so popular in Europe, people here [in Asia] may not even know the Maria biscuit, so we don’t yet know how they will react to this flavour, thus more research is needed.”​

That said, one thing that she is confident that the company has going for them when trying to successfully move into Asian markets is its flexibility and range, as this would allow a high level of customisation that is likely to appeal to Asian food and beverage manufacturers.

“We have thousands of flavours available, and we can customise just about anything for companies, down to slight differences in acidity sweetness and so on,”​ del Estal said.

“In terms of production, we also have an edge as we don’t do minimum orders or set a minimum time period prior to orders (e.g. must order two months in advance) and can help companies in ways that other firms might not be able to.”​

Savoury challenges​

Although IGH’s forte is mostly in sweet flavours, the firm is also looking to widen its variety of savoury flavours, an effort that is shaping up to look like a particular challenge in Asia.

“So far, from what we have seen we don’t have many savoury flavours that would work in Asia,” ​said del Estal.

“We need to increase our variety in this area before properly entering the market with such a range.”​

As such, widening its selection into categories requiring savoury flavourings such as for the meat or chips industries is also a major area of focus for the company at present, and to better tackle such demands in Asia it is also hoping to increase manpower on the ground.

“Another most important challenge right now is to up manpower for this location (Asia). Although we are also looking at Africa and the United States, Asia is definitely the main focus at this time.”​

New developments​

In addition to flavourings, IGH also produces private label health-related products for brands what do not have the relevant equipment and supply chains set up for production.

“We mostly do these products in pouches, and one of these is an acidified milk drink or drinkable yoghurt that is enriched with DHA and Human Milk Oligosaccharides (HMO) which is good for kids,”​ said del Estal.

Other products in this range carry health claims such as fat-burning, anti-ageing and collagen-rich, but these are not yet being retailed in the Asian region.

As for the company’s general direction, she said that natural and clean label were major trends for them.

“Spain is moving towards a natural and vegan trend, and we are moving in line with this as well,”​ said del Estal.

“Free-from and vegan options are very big, as is clean label for us – our R&D lab is looking at ways to eliminate allergens from our products in line with this.”​

IGH currently has three laboratories – two in Spain and one in Turkey – and has plans to establish a factory in Asia along with their expansion goals.

“Having a local plant makes sense, as it would make the timing to reach Asian destinations so much shorter than delivering them all the way from Spain or anywhere else,”​ said del Estal.