Changing Consumer Tastes: Seeking Regional Opportunities in an Evolving Beverages Market

© Euromonitor International

1

AUSDRINKS ASIA PACIFIC REGIONAL BEVERAGES SUMMIT 2016

CHANGING CONSUMER TASTES; SEEKING REGIONAL OPPORTUNITIES IN AN EVOLVING BEVERAGES MARKET

MARCH 2016, SYDNEY


2

REGIONAL SNAPSHOT

NATURAL, HEALTH & WELLNESS

FORTIFIED / FUNCTIONAL

EXPORT OPPORTUNITIES IN ASIA


3

Global soft drinks growth entering steady state

Global soft drinks total volume grows by 3% during 2015. Global soft drinks consumption growth continues to surpass that of any other drinks industry. With a significant portion of this growth coming from often extremely low-priced bottled water, the need for sustained, profitable growth remains acute.

REGIONAL SNAPSHOT


4

Asia Pacific accounts for a larger share of throat

REGIONAL SNAPSHOT


5

Leading geographies in Asia Pacific

REGIONAL SNAPSHOT


6

Leading soft drink categories in Asia Pacific & Australasia

REGIONAL SNAPSHOT


7

REGIONAL SNAPSHOT





8

Natural, health & wellness trends & growth drivers

What are the major growth drivers for natural and health and wellness?

Authenticity

Back to basics (traditional ingredients)

Awareness of allergies / food intolerances

Provenance

Increasing access to information through technology

Prevalence of lifestyle diseases (obesity, diabetes etc)



9

What is “natural”?

No strict definition of natural

Naturally Healthy Beverages naturally contain a substance that improves health and wellbeing beyond the product’s pure calorific value.

Naturally Healthy Beverages are usually a healthier alternative such as 100% fruit/vegetable juice, Superfruit juice (including cranberry juice), natural mineral water, spring water, RTD green tea, RTD oolong tea.



10

What is “better-for-you”?

Better-for-you products refer to products where the amount of a substance considered to be less healthy (e.g. sugar, caffeine or fat) has been actively reduced or removed during production.

The “less healthy” element forms part of the positioning and/or marketing of the product.

Better-for-you includes reduced sugar, reduced caffeine and reduced fat.



11

Health & wellness soft drinks in 2015 – regional variance NATURAL, HEALTH & WELLNESS

Asia Pacific (2015, million litres)

BFY Soft Drinks FF Soft Drinks NH Soft Drinks Organic Soft Drinks


12

Asia Pacific challenges Western European dominance NATURAL, HEALTH & WELLNESS

In Asia Pacific, NH soft drinks accounts for the largest volume share (71%) of health & wellness soft drinks. This is

compared with organic soft drinks, better-for-you soft drinks and fortified/functional soft drinks.


13

Bottled water and RTD tea feature heavily in NH soft drinks NATURAL, HEALTH & WELLNESS


14

RTD Green Tea NATURAL, HEALTH & WELLNESS

Ichi Ocha

RTD green tea product from Indofood Asahi

launched in 2014. Made from Ichiban tea.

Increasing number of Japanese restaurants

in Indonesia have boosted the popularity of

“Ocha”, Japanese green tea.

Indonesia

Source: http://www.indofood.com/product/beverage

Real Leaf Slim

RTD green tea product by Swire Coca-Cola

Taiwan Ltd. This is a fortified extension to

an existing successful brand of Japanese

style RTD tea. The tea claims to improve

digestive health.

Taiwan

Source: 7net (www.7net.com.tw

Everyday Morning Healthy Double Fibre

RTD green tea by Vitalon Foods Corp

launched in 2015. Fortified with chicory

fibre, positioned for digestive health.

Taiwan

Source: http://www.everymorning.com.tw


15

Bottled water

Asia Pacific bottled water total volume sales grew by 10% CAGR between 2010 and 2015 to reach 87 billion litres.

Asia Pacific accounts for more than double the size of North American bottled water sales in 2015.

China drives growth in Asia Pacific, representing 48% of Asia Pacific volume sales in 2015.

Water safety issues boost sales in China as consumers trade up to premium products.



16

UK Chancellor signals sugar tax

Mexico

Mx$1/litre tax implemented in 2014 for all drinks with added sugar content. Legislators are currently considering reducing this by 50% for beverages that fall below the 5g of sugar per 100 ml threshold.

United Kingdom

Levy to be imposed on soft drinks with more than 5g of sugar per 100ml. Higher rate for drinks with more than 8g per 100ml. Fruit juice and milk-based drinks are exempt.

Philippines

Proposed tax of approximately $0.22/litre to be levied on carbonates, energy drinks and other beverages containing added sugar.


What about fruit juice and milk-based drinks?

Is the sugar tax expected to have a negative impact on soft drink consumption?


17

REGIONAL SNAPSHOT





18

What is fortified/functional?

When identifying fortified/functional products, we focus on products to which health

ingredients (typically those with health claims) have been added.

Fortified/functional beverages provide health benefits beyond their nutritional value and/or the

level of added ingredients wouldn’t normally be found in that product.

The product must have been actively fortified/enhanced during production and the health

benefit needs to form part of positioning/marketing of the product.



19

Fortified/functional trends & growth drivers FORTIFIED / FUNCTIONAL

“hectic consumer lifestyles” “energy boosting”

“endurance”

“overworked consumers”

“general wellbeing” “immune support”

“limits fat absorption from food”

“weight management”

“digestive health”

“bone health”

“fortified with fibre”

“calcium”

“vitamins”

“L-carnitine”


20

Major FF soft drink categories (by volume) FORTIFIED / FUNCTIONAL

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

China Indonesia India Japan NewZealand

Australia SouthKorea

Philippines Thailand

FF Soft Drinks by Category (2015, volume terms)

FF Sports Drinks

FF Energy Drinks

FF RTD Tea

FF RTD Coffee

FF Fruit/Vegetable Juice

FF Liquid Concentrates

FF Carbonates

FF Bottled Water

FF Asian Speciality Drinks


21

Major FF soft drink categories (by value) FORTIFIED / FUNCTIONAL

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

China Indonesia India Japan NewZealand

Australia SouthKorea

Philippines Thailand

FF Soft Drinks by Category (2015, value terms)

FF Sports Drinks

FF RTD Tea

FF RTD Coffee

FF Fruit/Vegetable Juice

FF Energy Drinks

FF Concentrates

FF Carbonates

FF Bottled Water

FF Asian Speciality Drinks


22

China accounts for almost 2/3 of FF volume sales



23

Regulation

Japan - FOSHU

Previously, strict pharmaceutical law in Japan prevented medical claims on product packaging.

MHLW introduced Food for Specified Health Uses (FOSHU) in 1991.

Manufacturers required to gain FOSHU (Foods for Specified Health Use) approval by the Ministry when they wish to claim health benefits on product packaging.

Applications must include scientific documentation demonstrating the medical or nutritional basis for a health claim.

Costly and timely burden for manufacturers to register products as FOSHU.


FOSHU logo


24

China drives growth in FF energy drinks FORTIFIED / FUNCTIONAL


25

FF energy drinks challenges FF flavoured milk drinks FORTIFIED / FUNCTIONAL


26

REGIONAL SNAPSHOT





27

Opportunities in Asia for Australasian businesses

Asia Pacific, particularly China’s growing appetite for high quality products represents an enormous opportunity for Australasian businesses.

Key areas within the soft drinks space highlighted today include bottled water and fortified/functional soft drinks.

Australasian businesses to capitalise on “clean”, “green” positioning as a selling point for bottled water sales in China.

Fortified/functional drinks may also offer a growth opportunity for Australasian businesses

FF energy drinks key to unlocking value

Positioning in Asia Pacific countries may be quite different to the positioning used at home

Regulation in emerging markets



28

Online sales in China, the rise and rise of Alibaba

Online sales in China grew by 53% in 2015 to reach US$293 billion, of which food and drink sales accounted for 7%. Online sales conducted via mobiles (i.e. smartphones) and tablets accounted for 51% of online sales in China during 2015.

February 2014 saw the launch of Tmall Global, a cross-border platform and an extension of Alibaba Group’s B2C Tmall.com business in China.

As of August 2015, around 5,400 overseas brands from 25 countries and regions had opened stores on Tmall Global which is used by a growing number of brands from the US, Germany, Australia, South Korea, Japan, Taiwan and Hong Kong as a stepping-stone into China.

Australia Post partnered with Alibaba in 2014, allowing Australian businesses to use their Australian business licenses and ship their products directly from Australia to China.



29

SUMMARY

Future opportunities & threats for soft drinks in Asia


+ -


30

THANK YOU FOR LISTENING

Erika Sirimanne www.euromonitor.com

Date post:	11-Jan-2017
Category:	Business
Upload:	euromonitor-international
View:	736 times
Download:	0 times

Changing Consumer Tastes: Seeking Regional Opportunities in an Evolving Beverages Market

Business