Across 2018-2023, the Asia Pacific region saw polarised growth rates in packaged food sales across markets. This was largely due to economic challenges, the volatility of the industry’s supply chain and demand during the pandemic years. Most categories within leading markets such as India (8.8% increase in retail sales value), Vietnam (7.3%), Indonesia (6.8%) and the Philippines (6.6%) experienced a huge expansion of emerging brands beyond the leading players, indicating a vibrant competitive landscape and a bright spot for new entrants, bringing the increased diversity of choice that consumers have grown accustomed to in 2024.
Consumers also experienced intensified pressures on the cost of living, however, shaping thrifty attitudes that are continuing to stick in 2024. This is paired with generally low sentiment towards the economy, with knock-on effects for brand loyalty and greater mindfulness of consumption. Consumers have also become more cognisant of functional food, where they are better able to balance between nutrition and the joy of eating to face new economic and health realities.
Identifying pockets of growth from life stage nutrition
Life stage nutrition is a growing segment. Consumers in Asia are increasingly sophisticated in seeking products that cater to their specific health needs. There are also different purchasing habits in evidence for different life stages, indicating unique strategies that must be put in place.
In Asia Pacific, 33% of parents say they plan their children’s meals in advance, while only 22% of adults do the same for themselves – indicating the importance of brands providing convenient meal solutions for busy parents and being present for pre-planned purchasing occasions
Source: Euromonitor Voice of the Consumer: Health and Nutrition survey, fielded February 2023
The shrinking consumer base of children is typically perceived as a challenge for brands focused on this segment; however, this has birthed new potential in value-driven innovation. There are massive opportunities beyond milk formula, such as in other baby food (eg rusks, sauces etc for children) and prepared baby food.
The acceptance of such products reflects the increasing familiarity with, and dependence on, packaged food such as ready meals in Asian consumers’ daily lives – ie they are increasingly prepared to make similar purchases for their children. These are particularly bright spots for mid-paced growth markets like Malaysia and Thailand, where brands are seeking new opportunities to differentiate from other competitors.
Balancing price and health for comfort food
In Asia, emerging markets have experienced the greatest rise in the cost of living, partly as a result of their relatively low base compared to international standards.
For most Asian markets, the most significant jump in the cost of living occurred between 2022 and 2023. Vietnam’s cost of living index saw the biggest leap within those years, up 10 points, followed by Indonesia (seven points)
Source: Euromonitor International Economies
This has effects on the way consumers seek comfort food and indulgent experiences through eating. On the far side of the spectrum, consumers seek functional foods that offer claims of mental and emotional wellbeing such as stress reduction through the addition of ingredients like ashwagandha and GABA. These products are typically priced higher than average with a strong health positioning.
At the other end of the spectrum, there has been a greater focus for affordable staples and local food to highlight their signature SKUs, familiar flavour profiles, and attributes that appeal to consumers’ sense of familiarity.
Despite a stable negative price movement (most Asian markets showing some degree of price drops throughout the year) positive retail value growth has still been achieved for instant noodles, indicating the importance of affordability
Source: Euromonitor International Staple Foods
In Indonesia, for instance, leading instant noodle players introduced smaller packs at lower prices, or larger pack sizes at lower unit prices as a value for money offering. These strategies will have lasting effects in 2024 and shape consumer expectations of price and value.
Long-term opportunities
Focusing on emerging markets such as Indonesia, Thailand, and India will pay dividends, as these are populous nations with fast-growing packaged food markets and a growing share of consumer expenditure as a percentage of total GDP. Markets like Vietnam and the Philippines also present vast opportunities, but certain categories may still be too nascent for complex innovations and will take a longer time to penetrate given a challenging distribution landscape and the leadership of incumbents.
To learn more about future trends for foods, please see Euromonitor’s report, Opportunities Positioning Premium Food in Asia, for more analysis and insight.