asia

Emerging Trends in Southeast Asia

<p>With an increasing gross domestic product (GDP) and a growing middle class, the diverse Southeast Asia region is quickly becoming a land of opportunity for the natural products market.</p>

With an increasing gross domestic product (GDP) and a growing middle class, the diverse Southeast Asia region is quickly becoming a land of opportunity for the natural products market.

In Indonesia, for example, there are 90 million people in the middle class, which makes up 40 percent of the population. But within the next four to 10 years, this group is expected to grow to more than 150 million with 58 percent of households having annual disposable incomes between USD $5,000 and USD $15,000, according to PricewaterhouseCoopers LLP.

Following the overall global trend, focus on health is increasing in Southeast Asia. Consumers are more concerned about the health profile of foods and beverages, and they are seeking more ways to improve their health through the products they purchase. Supplements that improve brain function, support longevity or promise better skin are more popular than ever. Though consumers are eager to improve the health and wellness of themselves, and especially of their children, we see this expressed differently between what we consider first-tier and second-tier countries in Southeast Asia.

First-tier countries, such as Singapore and Thailand, have fairly developed economies where consumers are already used to the availability of products to improve their diets. Increasingly, consumers in these countries are concerned with longevity and slowing the effects of aging. One offering that reflects this trend is UHT (ultra-high temperature) value-added milk products aimed at adults. Popular in Thailand, these products often focus on enabling mature women in particular to maintain their active lifestyles, delivering high levels of calcium, phosphorous, vitamin D, A and B2, as well as collagen to help maintain healthy and young-looking skin.

In second-tier countries, such as Indonesia and Vietnam, middle income and poorer families are seeking ways to improve their diet and wellness through access to more diverse and healthier products. Commonly, as countries increase their available disposable incomes, consumption of milk increases, particularly among children. As the trend continues, consumers begin to look for healthier versions of milk with specific aims, like aiding the academic performance of school-aged children. Milk varieties fortified with omega-3 and -6 to improve brain function, as well as vitamin B3 and B6 to improve healthfulness, and available in flavors attractive to children, are growing in popularity. However, creating palatable enriched dairy products often requires the aid of ingredients that can help improve texture, suspension, stability and mouthfeel.

As in Western nations, increased consumer scrutiny is calling into question synthetic food ingredients. In particular, countries such as Malaysia, Vietnam and the Philippines have started to encourage the use of natural alternatives to synthetic colors. Demand will likely continue to increase for naturally derived food coloring to replace synthetics.

In areas familiar with supplements and functional foods, such as Malaysia and Singapore, the nutraceutical market is growing. Consumers are looking for new products that will deliver health benefits, such as age-fighting antioxidants and enhanced brain function. The appetite for these types of products is also growing rapidly in Thailand and Indonesia.

Fish oil as a dietary supplement is likely to see continued growth. FMC has conducted collaborative studies with local institutions to determine which omega-3 ingredients would be most relevant in particular countries.

Overall, converging factors have dramatically increased the appetite for healthier foods and beverages, creating a market for products that promise to improve health and function. To accommodate for the recent growth, companies such as FMC are expanding their scopes in this region.

Southeast Asia is an area with tremendous opportunity. Understanding the drivers of growth allows companies to put sincere efforts toward building capacity in these regions, bring state-of-the-art facilities with a focus on research and development to these areas, deliver better service, support and innovation, and support unique customer needs.

Also check out INSIDER’s report on Vitafoods Asia 2014, which comes packed with information on the Asia Pacific region and its market opportunities.

Ian Robinson is marketing manager at FMC Health and Nutrition Asia Pacific region, and Penny Zhang is commercial development manager, FMC Natural Colors Asia Pacific region. FMC is extending its business in Asia, opening an Asia Innovation Center to elevate its research capabilities and drive customer collaboration, and breaking ground in Thailand for a plant dedicated to producing microcrystalline cellulose (MCC).

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