07 May 2020
Posted in Consumer
Despite COVID-19, APAC provides opportunity for soup manufacturers, says GlobalData
Amidst the coronavirus (COVID-19) outbreak, soup segment has been witnessing growth in the Asia-Pacific (APAC) region due to its long-shelved life, offering an opportunity for manufacturers to capitalize on the trend, says GlobalData, a leading data and analytics company.
GlobalData forecasts the APAC soup sector to record a compound annual growth rate (CAGR) of 4.74% from US$3.64bn in 2019 to US$4.39bn by 2023.
Khushboo Jain, Consumer Insights Analyst at GlobalData, says: “Over the past couple of years, APAC has been experiencing a steady rise and strong preference for soup products, which has encouraged food manufacturers to launch a variety of soups to help consumers cut down on cooking time without compromising their dining experience.
The volume consumption of soup in the APAC region is set to record a CAGR of 2.58% from 290.10 million kg in 2019 to 321.17 million kg in 2023. Consumers’ busy lifestyle and rising disposable income are set to further boost the consumption of soups (a staple of most Asian meals), which is likely to benefit the region’s manufacturing companies to expand their product portfolios to meet consumers taste and preferences.
This increasing demand can also be attributed to the growing inclination towards healthier and convenient food products. During the COVID-19 lockdown period in the APAC, consumers find these attributes attractive enough to continue purchasing soup products. The leading players in the soup market in APAC region are Unilever, The Kraft Heinz Co, Campbell Soup Company, Nestle, Ajinomoto Group and Pokka Corporation, which together account for 40% market share.
Soup is also seen as a comforting, healthy and nutritious meal among consumers. The sales of soup, in particular canned, dry and instant soups, continue to rise since they last for a long time and are easy and quick to prepare when needed. The soup market before COVID-19 was projected to grow at a CAGR of 4.02% and after COVID-19 the market is projected to grow at a CAGR of 4.74% where the fastest growing countries in APAC will be India (CAGR 9.33%), China (CAGR 7.36%) and Japan (CAGR 5%). One of the leading players operating in the soup market Ajinomoto Group in Japan has stepped up its production capacity to cater to the increasing demand and prevent supply chain disruptions.
Jain concludes: “Rising demand of staple foods like soup during COVID-19 lockdown in APAC is likely to continue due to the added benefits such as long-shelved life and user convenience. Thus, it is imperative for firms to create innovative and cost-effective products, which more or less replicate the taste of the conventional products to tap the high growth potential market.”