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Shift towards healthier beverages in Southeast Asia
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Thursday, 16 August, 2018, 08 : 00 AM [IST]
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Mamta Thakur
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Southeast Asia is an area with tremendous opportunity. One of the largest trends in the beverage market in Southeast Asia is hydration. This has been apparent since 2016, when sales of products like bottled water and coconut water grew strongly across the region. Consumers are becoming more conscious about their health, and as a result, seek either water or water-like options. In Southeast Asian markets, soft drinks players are tapping into this trend by launching products such as sports drinks and functional bottled water. Some countries, such as Thailand, have implemented sugar taxes, therefore driving consumers towards beverages that have less sugar.
Now-a-days the consumers 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. 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 ageing. One offering that reflects this trend is UHT (ultra-high temperature) value-added milk products aimed at adults.
High levels of calcium
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. Other countries like 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 flavours 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.
In areas familiar with supplements and functional foods, such as Malaysia and Singapore, the nutraceuticals 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.
According to research from global market intelligence agency Mintel, as many as three in four (75%) metro consumers in Indonesia and two in three (66%) metro consumers in Thailand say they aim to have a healthier diet in 2017. One massive trend underpins the success of almost everything else in the healthy food and beverage market. It’s the key driver of most innovation—from plant-based products to the rebirth of full-fat dairy, the rise of green juices, blueberries, almonds, seaweed snacking and tens (perhaps hundreds) more healthy propositions. This single, most-powerful trend is consumers’ desire for foods and ingredients that are “naturally functional.”
The biggest opportunities lie with snacking products that are explicitly plant-based, dairy-free and gluten-free, such as the many brands based on seaweed, beans, chickpeas and others. People often “feel better” if they eat less meat and sometimes only consume plant-based foods.
Growing popularity of turmeric
The strongest growth potential of a naturally functional product for 2017 and beyond lies with turmeric, which—having proven its strength in the dietary supplements—is starting the transition into foods and beverages. With more than 580 published human studies on its benefits (with inflammation the single-largest area of research) it is not surprising that this traditional culinary ingredient in curries and other Asian dishes has grabbed consumer attention.
The surge in interest is fueled partly by consumers’ growing anxiety to reduce their sugar intake. When people search for information about sugar, one of the key negative health effects they discover is its role in causing inflammation. Search for foods that are protective against inflammation and turmeric usually comes close to the top of the list. The number of products using turmeric as an ingredient doubled in both the US and Europe in the period 2014-2016. A sign of growing momentum is that “turmeric-centered” startups are beginning to gain traction, such as Temple Turmeric, a beverage brand that is heading above the $10 million annual sales threshold.
Trends towards protein-rich beverages
One of the key ways in which consumers in Southeast Asia are looking to adopt a healthy and balanced diet is by consuming drink that is high in protein. Indeed, there has been an increased interest in protein offering across the region.
Mintel research shows that 64% of metro consumers in Indonesia and Thailand respectively say that as part of their daily diets, they prefer to get their protein from foods that are naturally high in protein, thus reflecting a growth of interest in protein consumption of Southeast Asian consumers.
One of the biggest opportunities is in broth, where the Asian market shows how large this business can be. Broth is made by slowly cooking bones so that the marrow, cartilage, gelatin, collagen, amino acids, vitamins and minerals are released into the water. Chilled for a few hours, it resembles Jell-O in the refrigerator because of the many binders broth contains. Cooks have always considered it a key component of many dishes.
But the new manifestation has foodies eating warm broth from a bowl (like drinking miso soup) and even drinking it chilled for breakfast or for a post-workout snack. As with many better-eating developments, it is on-the-go foodservice outlets that are making consumers familiar with the concept. Inexpensive to make and packed with vitamins, minerals and proteins, some of the benefits may include promoting strong bones and reducing joint pain and inflammation. It may also help inhibit infection and help the gut by promoting healthy digestion.
The market leader in broths in Southeast Asia is Suntory-owned Brand’s Essence of Chicken, with more than $600 million in sales. The brand is found in 19 countries, with its main market in Thailand—the largest market for Brand’s broth, with more than $175 million (€156 million) in sales—Taiwan, Singapore, Vietnam, Indonesia, Hong Kong and Malaysia.
Strong growth in bottled water
Bottled water continued to observe resilient growth in Southeast Asia, with Vietnam recording the highest growth of 12% in 2017. Manufacturers have focussed their efforts on launching new products with hydration benefits. In the Philippines, new functional bottled water brands emphasising hydration have been gaining traction. An example is Gatorade G-Active, which comes in various flavours and does not contain sugar. By incorporating flavours and natural ingredients in bottled water, manufacturers seek to widen product variety and excite consumers seeking fizz.
Other healthier variants
The healthier beverages are in trend especially those featuring natural and functional ingredients. F&N Seasons Ice Lemon Tea with reduced sugar is an example of this from Singapore, which was launched in the second half of 2017. The company highlighted the reduced sugar levels on its packaging, providing consumers greater transparency and awareness of their health positioning.
Moreover, other initiatives undertaken by manufacturers include infusing superfoods in their products. Fuzetea + Peach tea is one example of this which was launched in Vietnam. Containing chia seeds that serve to provide health benefits like being rich in antioxidants, its strong health positioning, not only sparked consumer interest but also served as a point of differentiation from competitors. Furthermore, the price points of these products remain mid-priced relative to the category.
In 2017, carbonates observed volume decline in countries like Malaysia, Indonesia, Singapore and Thailand where consumers have become more educated about the impact of sugar consumption on their health. As consumers shun carbonates due to strong association with sugar, manufacturers seek to retain consumer loyalty by launching zero sugar or sugar-free alternatives. Furthermore, manufacturers have introduced fruit juice in carbonates such as C&C Sparkling Juice in the Philippines, generating consumer interest, especially among those looking for a fizzy drink with minimal sugar intake.
Product innovation in Southeast Asia
Firstly, healthy ingredients infused in beverages are expected to increase along with natural sweeteners such as stevia that replace the sugar in beverages. At the same time, oat-based and dairy-based beverages are expected to gain prominence, as consumers perceive these beverages to be highly nutritious.
The product like Nestum Cereal with Milk was launched in September 2017 in Malaysia and Singapore. This ready-to-drink product contains multigrain consisting of brown rice, wheat and oat, which appeals to busy consumers seeking quick breakfast solutions while not compromising on benefits. Secondly, flavours are set to widen across various categories such as flavoured bottled water, exciting consumers that are seeking more choice and fizz.
In particular, local flavours extracted from natural fruits such as the Mandarin Orange, are popular, as seen in the launch of Heaven and Earth Mandarin Orange Flavoured Black RTD tea in Malaysia. Such products are set to distinguish themselves from beverages with sweetened flavours, differentiating themselves as healthy beverages. Thirdly, manufacturers are expected to place greater emphasis on their packaging, launching new packaging designs and sizes. Small pack sizes are set to increase due to consumer demand for on-the-go consumption and portion control for beverages with sugar.
(The author is PhD research scholar, dept of food engg & tech, SLIET, Longowal, Punjab. She can be reached at thakurmamtafoodtech@gmail.com; mamta.ft@gmail.com)
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