The Southeast Asian market is mainly dominated by 3 segments, namely functional foods, functional beverages and nutritional supplements. Let’s take a closer look at these three segments and their market drivers.
In addition to covering the basic need for nutrients, functional food offers additional health benefits. They contain ingredients like fiber, probiotics, carotenoids and vitamins. The Asia-Pacific functional food market itself is projected to reach $ 71 billion by 2025.
The main drivers of this market are:
- Increase in consumer disposable income.
- Better sales channels that lead to increased product availability.
- Increase in chronic diseases.
Yakult Honsha Co. Ltd., BASF SE, PepsiCo., Kellogg Company, Nestle, Agro Tech Foods Ltd., GlaxoSmithKline Company and General Mills are some of the major market players in the industry who are using strategies such as mergers and acquisitions and bringing new products to market bring to.
Functional beverages include beverages such as energy drinks, milk supplements and their alternatives, and fortified beverages. In addition, flavors and their blends are one of the most demanding trends on the market, resulting in numerous combinations that market participants formulate in order to remain relevant in the market. The CAGR of the Asia-Pacific market is estimated to be around 7.5% by 2025.
- Clean labels: This is one of the major drivers in the Southeast Asian functional beverage industry as it instills consumer confidence. According to one report, 20.09% of products contain one or more ingredients that are natural and organic in nature. In addition, there is a growing awareness among consumers who have understood the importance of organic ingredients.
- Great market potential: The Asian market has a robust beverage market that offers growth opportunities. The increase in consumer disposable income and the desire for healthy lifestyles make the market even easier.
Key players include: PepsiCo. Inc .; Monster Drink Company; Fonterra Cooperative Group; Red Bull GmbH.
Preventive health care and the urge to consume food for a healthier lifestyle have made this segment the most demanding segment of the Southeast Asian nutraceutical market. The dietary supplement industry was valued at around $ 6.9 billion in 2018 and has a forecast of over $ 10 billion in 2026 with a CAGR of 5.6%.
Important market participants
Key players include: Pfizer Inc .; Nestlé SA; Herbalife Nutrition Ltd; Abbott; GlaxoSmithKline company.
Some of the market drivers of the Dietary Supplements Market are as follows:
- Increase in health care: Sedentary lifestyle and hustle and bustle, global pandemics and the aging of the population are some of the factors due to which diseases of civilization are on the rise and this has led to a preventive mindset among consumers. Food supplements, especially plant-based products, are in demand.
- Consumer awareness and increase in sports-based products: Consumer awareness of dietary supplements is increasing. The benefits of energy boosters and sports nutritional supplements are particularly popular.
As we can see, the nutraceutical industry in Southeast Asia is robust. Also, let’s take a look at some of the Southeast Asian countries that excel in nutraceuticals.
The nutraceutical market in Vietnam ranks second in terms of functional beverages. In addition, the consumption of milk supplements took second place in 2019. Energy drinks are one of the strongest segments in the country. According to a report, the growth rate of the Vietnamese functional food segment is the highest of any Southeast Asian country. In addition to dairy products, herbal food supplements are the most demanding products on the Vietnamese market. Covid-19 has led to increased health awareness among consumers, which has also led to an increasing demand for probiotics. The probiotic industry has shown an annual growth rate of 10% even during the pandemic.
Consumer addiction to organic and natural ingredients is the main driving force behind Singapore’s herbal supplement industry. Ingredients like garlic, biloba and ginseng are in demand and will drive the market in the future. In addition, increasing digitization has increased sales through digital commerce and online marketing. This will lead to an increase in sales of vitamin supplements as well as functional foods and beverages. In addition, lifestyle changes and digestive health concerns have increased demand for fortified dairy products.
Source: Research CMFE
Malaysia has some of the oldest rainforests in the world, which has resulted in an increasing demand for herbal supplements. The potent medicinal plants and the abundant raw materials offer the country the advantage it needs to remain relevant in the market. It is clearly shown by the fact that over 50% of the registered medicinal products are of natural origin.
Additionally, the Malaysian government has introduced various policies such as National Key Economic Areas (NKEA), National Biodiversity Policy and National Agro-Food Policy (NAP) to promote the local herb industry and improve the country’s R&D sector.
The way ahead
The market for dietary supplements in Southeast Asia suffered an initial slump due to the pandemic. However, the market has picked up and is doing well. It is important to monitor the authenticity of the product in the current scenario. As the market grows rapidly, various counterfeit products are affecting the health of consumers. As the Southeast Asian market will reach great heights, strict regulations must be followed to prevent counterfeit products from entering the market.
(The author is CMD, Interlink and VP, HADSA)