Food & Beverage Asia Feb/Mar 19

MARKET INSIGHTS 14 FOOD & BEVERAGE ASIA FEBRUARY / MARCH 2019 By Ms. Natasha Telles D’Costa , Director, Agriculture & Nutrition, APAC, Frost & Sullivan H ippocrates famously wrote “let food be thy medicine and medicine thy food”. The relevance of that one sentence has never been more on point than in the Asia Pacific diaspora today where “eating well is seen as a form of self- respect” and yet we are growing a generation of children that continues to battle with inadequate nutrition from both ends of the economic spectrum. As affluence has grown in APAC, the initial splurging has given way to a need for food to have value aside from just being a source of general nutrition. Unlike a generation ago, children today are key influencers of family pantries, leading to companies doubling investment in this sector particularly in the increasingly westernised Asian markets. As APAC ages at a faster rate than the rest of the world, the upcoming economic burden on the children of today will be immense, leading them to work longer than any generation before them and hence driving governments and private enterprise alike to begin looking at their nutrition to enable healthy children to grow into healthier, valuable adults. Better Nutrition as the Source of All Aspiration The APAC market is characterised by a fast-paced education-driven consumer base with growing focus on aspirations that enable success. Children tend to be the focus demographic for this thought process as consumers choose to limit offspring numbers to provide better value to smaller families. Nutrition and food safety tend to trump these aspirations across the region. Below are key themes which influence successful children’s nutritional products across APAC. Traceable stories: As APAC continues to spend between USD$5-10 billion per year on dealing with food scams, the focus on safe food for the young has never been a greater value influencer. Baby food, in particular, is a key area focussing on providing stories of traceability as a premium feature. Exporting countries such as Australia will lead the way by focusing on “free-from” food options targeted at children’s nutrition. Functional beverages will lead the way: No sector will dominate children’s nutrition more than functional beverages. In Asia, these formats will be used as key areas for micronutrient fortified drinks such as those being sold by companies such as Tipco in Thailand. Iron deficiency in particular will be the focus for several manufacturers who aim to address what is seen as a growing epidemic for children. The dairy beverage sector will witness the entry of several non-dairy companies into this space aiming to get a share of this market. Children’s fortified beverages currently account for less than two per cent of the USD$30 billion APAC functional A FUTURE PERSPECTIVE FOR CHILDREN’S NUTRITION

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