Asia Pacific is projected to have 237 million tonnes of unmet retail packaged food potential. 60% of this comes from staple foods as Asian consumers gradually trade up for better quality food essentials promising safety and hygiene. Consumers are also seeking value-added product attributes that are both convenient and experiential. Offering product variety across more cuisines and formats could open new opportunities, while stagnant growth could be reversed by embracing more competition.
This report comes in PPT.
The Asia Pacific packaged food market is underserved, with only half of its full potential tapped into in 2024. Most of the consumption gap goes to staple foods, where progress is limited by the abundance of fresh food. Asian consumers are gradually trading up, driving value growth in both fresh food and packaged processed food, as they seek quality and food safety, as well as novelty.
Beyond macroeconomic factors driving Asian economies, it is imperative to assess “soft drivers”. Processed meat brands are innovating to lifestyle changes in Indonesia, and South Korean manufacturers enforce value in baked goods, paving the way for brighter market prospects. Meanwhile, the Philippine instant noodles market faces a bleak future if it fails to embrace competition.
Winning brands that aim to build market share and customer loyalty for the long term introduce varieties that speak to Gen Z consumers. For example, fusion flavours that are exciting yet familiar and products that are versatile to fast-paced lifestyles and inconsistent routines. Novelty will invigorate more mature categories, such as new cuts and types of meat in processed meat.
The race for claiming a larger market share whilst growing the size of the market goes beyond packaged food brands; artisanal products (such as bakery) made fresh and foodservice compete with packaged food players for share of wallet and stomach. Brands that introduce products with differentiated features within an affordable price range are on track to stand out.
Fresh Food refers only to fresh uncooked and unprocessed foods (packaged and unpackaged). Packaged sugar products and natural sweeteners (e.g. brown sugar, table sugar, molasses) are also included. For Fresh Food, we research total sales across distribution channels including retail, foodservice and institutions. For a selected 18 markets, we have a breakdown of total fresh food sales according to the following formats: • Retail • Foodservice sales • Institutional sales Retail Retail sales is defined as sales through all legal establishments primarily engaged in the sale of fresh, packaged and prepared foods for home preparation and consumption. Retail sales excludes sales to hotels, restaurants, cafés, duty free sales and institutional sales (canteens, prisons/jails, hospitals, army, etc). Our retail definition excludes the purchase of food products from foodservice outlets for consumption off-premises, eg grilled chicken/meat/fish bought from counters of cafés/bars. This falls under foodservice sales. For foodservice, we capture all sales to foodservice outlets, regardless of whether the products are eventually consumed on-premise or off-premise. We estimate sales through the following channels: Modern Grocery Retailers • Supermarkets • Hypermarkets • Discounters • Convenience stores • Forecourt retailers Traditional Grocery Retailers • Independent small grocers • Food/Drink/Tobacco Specialists • Other grocery retailers (morning/speciality/open/wet/farmers’ markets, stalls and kiosks, etc) Non-grocery retailers • Health and beauty specialist retailers • Other non-grocery retailers Non-store retailers • Homeshopping • Internet retailing • Vending • Direct selling Foodservice Foodservice sales are defined as sales TO consumer foodservice outlets that serve the general public in a non-captive environment. In other words, this means that the foodservice volumes track sales of all fresh food going into restaurant kitchens, regardless of what the restaurant actually does with that food. Foodservice outlets include cafés/bars, FSR (full-service restaurants), fast food, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Sales to semi-captive foodservice outlets are also included. This describes outlets located in leisure, travel and retail environments. • Retail refers to foodservice units located in retail outlets such as department stores, shopping malls, shopping centres, super/hypermarkets etc. • Leisure refers to foodservice units located in leisure establishments such as museums, health clubs, cinemas, theatres, theme parks and sports stadiums. • Travel refers to foodservice units based in airports, rail stations, coach stations, motorway service stations offering gas facilities etc. Institutional sales Institutional sales is defined as sales to captive foodservice units that serve captive populations such as in hospitals, schools, prisons, military camps, hotels, hostels, nursing homes, homes for elderly people, religious houses, etc.
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