Changing dietary preferences and increasing health awareness are the key factors propelling the demand for functional food products in Asia-Pacific (APAC). Meanwhile, the growing awareness of lifestyle-related diseases and the importance of preventive healthcare are also encouraging consumers to seek out foods that promote better health outcomes and overall well-being, which will lead to the reshaping of the APAC food industry, according to GlobalData, a leading data and analytics company.
Priyanka Jain, Consumer Analyst at GlobalData, comments: “Despite the waning of COVID-19 concerns, APAC consumers are gravitating towards natural, organic, and functional food products that are perceived to help in alleviating health concerns. This aligns with GlobalData’s 2023 Q4 consumer survey finding that the food purchases of 62% of APAC consumers are often or always influenced by how well the product/service impacts their health and well-being*.
“The health trend is also spurring demand for probiotic and nut-based snacks. As a result, the APAC food market with health & wellness attributes expanded at a value compound annual growth rate (CAGR) of about 7–9% over 2017–22**. With consumers reverting to their hectic pre-pandemic lifestyles, they are seeking foods that boost physical stamina and cognitive alertness, alleviate fatigue and stress, and aid in relaxation and sleep.”
Tim Hill, Key Account Director, GlobalData Singapore, notes: “Premium prices remain a key barrier to the penetration of health & wellness attributed foods in the highly cost-conscious retail market. Moreover, amid high inflation and the prolonged Russia–Ukraine conflict, food manufacturers are under pressure to pass on these high input costs to consumers to conserve their margins. Notably, GlobalData’s survey reveals that 49% of APAC consumers are concerned about the impact of inflation on their household budgets*. Owing to the cost-of-living crisis, these frugal consumers are switching to cheaper brands and labels or cheaper stores. The limited product awareness is also undermining the segment’s growth prospects.”
Jain adds: “Manufacturers are thereby compelled to strike a fine balance between price and health benefits. Moreover, increasing participation in physical activities will stimulate demand for functional on-the-go offerings, particularly for snacking and mealtime accompaniments. For instance, ProV Foods launched a range of pre-soaked nuts such as almond, pecan, and walnut, under the ProV Lite Activated Nuts brand name in India. As macroeconomic conditions improve, consumers can be encouraged to trade up to premium food products more frequently. Manufacturers need to create awareness of these products through marketing initiatives.”
Hill concludes: “Functional/fortified food products have remained a niche segment in the APAC region due to their above-average prices compared to regular variants. To expand their consumer base, manufacturers must highlight the benefits associated with product consumption. Leading companies are also leveraging alternative ingredients and production techniques to develop healthier alternatives with more personalized claims, such as ‘promotes gut health and blood circulation’ and ‘energy-boosting’.”
* GlobalData Q4 2023 Consumer Survey – Asia-Pacific, with 6163 respondents, published in December 2023
** GlobalData Retail Intelligence Center – Market Analyzers, accessed in January 2024
