The East Asian Food Ingredients Market
Australia’s geographical position combined with its ability to produce high quality food ingredients, should ensure that it is well positioned to take advantage of the growth and changing trends in the Asian food industry. Dairy products, for example, are not a traditional food in many Asian countries, especially where the Chinese culture influences diet and eating habits. However, consumption of dairy products is rising steadily in many Asian countries. In Vietnam for example, where dairy products have never been part of the traditional diet, the market is expected to exceed 460 million litres by the year 2000, more than six times its size in 1990 (APFIBR 1997). Dairy product consumption in Asia can be linked to economic development and increased exposure to Western-style foods. The medium term outlook for these products in Asia is positive, with strong growth in demand apparent not only for low value products, but also for yoghurt drinks, ice cream, and soft and hard cheeses (Horsburgh 1997).
Opportunities for niche products are increasing in East Asia. The results of a recent survey of major food ingredient suppliers based in Asia reveal the following prospects (APFI 1996b):
Chocolate: Producers are expected to emerge throughout Asia, primarily selling through street stalls or shopping malls (such as delicatessen chocolates, served with coffee and ice cream). Initially this segment initially will be serviced primarily by foreign imports. Rising consumption of chocolate throughout Asia is due mainly to sustained economic growth in the region.
Ethnic foods: Demand for ethnic foods is on the rise worldwide, as Asian manufacturers have begun to produce these products away for the consumer markets as well as the specialty segments. This trend has resulted from increased overseas travel by Asian consumers and thus increased exposure to foreign foods. As a result the number of ethnic food service establishments across the Asian region has grown rapidly. The retail store sector has also responded, offering a wide range of ethnic foods in supermarkets.
Premium ice cream: Along with growing markets for low-fat ice cream and yoghurt, demand for premium ice cream has increased with rising consumer affluence and spending power. Multi-nationals such as Haagen Dazs have led the way by expanding the number of outlets throughout Asia.
Food flavourings: Demand for beverages in general has been increasing at approximately 20 per cent per year, with emphasis on natural ingredients such as tea, herb, fruit and flower extracts. Overall, ‘nature identical’ flavours (products which can be produced from chemicals which are already found in nature) will be more popular in the near future because of their reliability, cost-effectiveness, and flexibility in the production process. For example, the ‘Living Flavour’ technology, which replicates the flavour of ripened fruits is growing in popularity.
Health foods: Innovative companies are already catering for future increased demand for these products as consumer affluence and spending on food continue to rise. However sales of low-fat products are not expected to grow at the same rate as those of low-cholesterol products until health consciousness in Asia assumes greater importance with consumers.
Instant noodles: One of the major trends in Asia is the boom in consumption of instant noodles. Japan is the largest market, with sales valued at $US560 million in 1993, closely followed by Indonesia with $US500 million. On a per capita basis however, South Korea leads the field with 70 packs of instant noodles per person per year in 1993, followed by Japan with 50, Taiwan with 35 and Hong Kong and Thailand with 30 (see Figure 0.1). China is the smallest of these markets on a per capita basis, with just 15 packs per urban resident.
When the potential growth of markets such as China with its 1.2 billion people is considered, the amount of flour and other food ingredients required to meet demand is staggering. Already the rising demand for grain products is leading food flavouring companies to capitalise on the demand for
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