Non-dairy, low sugar, functional and sustainable: Suppliers take on the four trends driving APAC’s beverage innovation
According to insights from Kerry, Sweegen and DSM, consumers in APAC are increasingly demanding beverages that taste good and support a healthy lifestyle, but are also sustainable and kind on the environment. The COVID-19 pandemic has also accelerated these trends.
FoodNavigator-Asia spoke to these companies to better understand the trends, and solutions offered to their customers.
Trend 1: Non-dairy and plant-based
The plant-based food industry is growing exponentially, including in the non-dairy beverage space.
In the APAC and MENA regions, this trend is driven by growing numbers of flexitarians, the large number of lactose intolerance consumers in the region, and younger consumers, according to Jie Ying Lee, senior strategic marketing manager (beverage) at Kerry APMEA.
The region accounts for around 60% of global dairy-free beverage sales, with China, Thailand and Australia taking the lead.
Markets such as Japan and Saudi Arabia are also gaining traction, especially with alternatives such as oat milk, which was non-existent in Japan a few years ago.
According to Kerry’s recent proprietary research, 10% of Japanese are now drinking oat milk two to three times a week.
DSM’s vice president of human nutrition and health, Anand Sundaresan, added that plant-based milk such as oat milk and almond milk are growing exponentially, moving past soy milk which has traditionally been the more popular dairy-free alternative in the region.
“As demand for more plant-based milk increases, we expect to see companies tailoring these products to better suit Asian consumers' taste profile as well as making it taste and have feel as similar to its dairy counterpart,” Sundaresan said.
According to Szu Lyn Ng, RD&A director at Kerry APMEA, about 30% of consumers in the region say that current dairy alternatives are lacking the taste and texture that they associate with regular animal dairy.
“We have also recently launched the Radicle Solution Finder, a web-based tool designed for food and beverage manufacturers to quickly find and access solutions to some common challenges in developing plant-based products.”
Trend 2: Low sugar
Concerns over diabetes from overindulging in sugar and other lifestyle diseases have driven innovation in beverages with low or no sugar, and additional nutritional value.
About 60% of all diabetics live in Asia, and consumers are demanding beverages with reduced artificial sweeteners, switching for clean and natural solutions such as plant-based natural sweeteners.
“We are seeing an innovation trend for healthier carbonated soft drinks that have a focus on sugar reduction and functional benefits in premium beverage launches in APAC,” said Luca Giannone, senior vice president of sales at Sweegen.
Sweegen’s zero-calorie stevia sweeteners, rebaudiosides M, D and E were recently approved by the Malaysia Ministry of Health for use as ingredients in food and beverage products.
Malaysia joins many other countries in the world, including APAC countries such as Thailand, Philippines and Brunei where, governments are enforcing sugar or soft drink taxes.
In mid-July of 2019, a tax on pre-packaged sugar sweetened beverages went into effect, and all ready-to-drink sugar sweetened beverages whether imported or manufactured within Malaysia were subjected to a duty.
Sweegen’s rebaudiosides M, D and E have also been approved in Singapore, Australia, New Zealand and it hopes to receive 80 to 90% of approvals within APAC by this year.
Sweegen is planning on opening a food and beverage innovation studio in Singapore to collaborate with brands and develop products suited to the regional tastes, when COVID-19 conditions gradually ease.
Trend 3: More functionality
Beyond lower sugar beverages, consumers in APAC are also seeking better-for-you drinks, with functionalities ranging from digestion, energy and stress.
For DSM’s Sundaresan, the firm has observed that consumers are more interested in food and drinks that benefit their immune health, accelerated by the COVID-19 pandemic.
“The pandemic has caused a fundamental shift in human behaviours and needs. It has propelled consumers to regard wellbeing in a broader context, challenging the notion of healthy living today and in the future,” added Lee from Kerry.
Beverage manufacturers have developed fortified juices with added micronutrients and dairy-based drinks with added ingredients like fibre and prebiotics to improve immune health.
In India, DSM has created Nu-Shakti, a range of fortified food powders for flours and beverages accessible to consumers.
Trend 4: Sustainability
While consumers in APAC are growing more conscious about their health, they are also increasingly aware of the environmental footprint of the food they are consuming.
“Food and beverage products produced ethically with a commitment to support communities and protect the planet are moving to the forefront as well. Ultimately, brands must integrate their purpose with their products to meet the needs of consumers,” said Lee.
“The growing millennial and Gen-Z demographic care a lot about social change and entrepreneurship. We believe that these trends have been both a by-product and accelerated because of the pandemic,” said Sundaresan.
For DSM, it observed increasing upcycling of unused, unexpired food products to create beverages.
Through its Bright Science & Innovation Hub initiative, DSM has partnered with several food start-ups such as the Crust Group to create beverage products that are not only sustainable for the environment but are tailored to fit local taste profiles.
Singapore-based Crust Group uses surplus bread to create beer, although the company also produces a range of non-alcoholic beverages upcycled from discarded fruit rind.