As we are fast approaching 2025, AFBR foresees new challenges for the food and beverage industry in Asia, with dark clouds on the horizon.
The US election of a new President, whom historically in favor of a more protectionist economic strategy, might lead to many new trade policies which might impact import and export business with Asian countries. Meanwhile, the global political situation is relatively unstable with the Middle East and Ukraine- Russia wars still ongoing, and there is still a slim chance that these disputes might explode into a regional conflict, affecting supply of commodities and energy sources which powered up many of our F&B factories in the region.
Although demand for food and beverages will remain stable as they are considered as ‘essentials’, consumers will be more selective of what they consume. The following are 7 major trends for 2025 which we predict to continue to have a strong impact on demand and supply of food and beverages in the Asia Pacific region
(1) Affordability will remain key to consumers’ purchasing decisions – APAC consumers will spend more time at the supermarket choosing the products based on their affordability as such mass-market products including house brands will become more appealing as long as they remain favorable in terms of presentation, taste, and nutritional content.
(2) Sustainability applies to every aspect of business from being sustainable in terms of production, to sustainable raw materials, packaging to distribution. Growing number of Asian companies are venturing into sustainable food products like plant-based meat and dairy alternatives in recognition of the growing environmental challenges and as we move towards a 10 billion population by 2050. We will see more Asian companies embracing ‘sustainability’ in all aspects and not just one part of the sustainability movement.
(3) Health & Wellness will continue to be a growing trend as APAC consumers will value F&B products with health claims – from mental well-being (see Chart 1.0) to cognitive health, low cholesterol, low sugar, high protein, high fiber, low-fat, and energy and immune boosting functions among others. These will continue to grow as they align with governments’ health programs in many Asian countries. Products with certified health claims but still affordable and tasty will have a better competitive advantage.
(4) There will be growing demand for Convenience not only in terms of ease of preparation of the food products but also in terms of storage (longer shelf life) without compromising its nutritional aspects. With operational and cost challenges, many F&B manufacturers will find ways to extend their products’ shelf-lives while ensuring the nutritional goodness of their products are not compromised. As an example, Yili’s latest ambient probiotic-enriched yogurt launch is an industry’s first and the Chinese dairy giant is also exploring the use of microencapsulation technology for shelf-stable products. Such effort is necessary to avoid wastage, while Asian consumers with busier work lifestyles will support such product innovations.
(5) Packaging needs to be more reliable as food and beverage products will travel a longer distance with the advent popularity of internet shopping and digital market place where consumers in China, for example, can order products from as far as Argentina. New packaging technology can also help to extend the shelf lives of products from previously 1 month and requiring refrigeration, to 1 year or more under ambient temperature.
(6) Lower demand for premium non-essentials like premium wine and high-end chocolates as consumers tighten their purse strings. AFBR expects the Asian economy to face significant challenges in 2025 led by a new political leadership in the US.
(7) Savvy consumers require food and beverage products to be more appealing and innovative in terms of visuals as well as texture and taste. Ingredients companies need to work closely with food manufacturers to co-create prototypes based on individual market tastes and preferences. Products can no longer be ‘uniform’ across regions; they need to be customized to the market to ensure success. The rise of social media has made branding and marketing simpler yet more complicated as consumers can compare products and read feedbacks simply by the touch of the button.
