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Look East: Three F&B trends in Asia this year

COCA-COLA announced in March that, for the first time in its 125-year history, it plans to launch an alcoholic drink. The sparkling water and shochu concoction is designed specifically for Japan, to help one of the world's most recognisable brands tap into a very local trend.

This is just the latest in a series of moves by large food and beverage companies that are recognising the importance of localisation to conquer the Asian market. As Asia's urban middle class continues to grow at breakneck speed, there's a lot to play for, particularly in South-east Asia's emerging markets. Increased overseas travel means that consumers are generally more receptive to Western food and drink trends, but as the Coca-Cola example shows, local tastes still reign supreme.

Brands looking to enter, grow or thrive in this complex market this year should take heed of the following three trends that look set to dominate in 2018:

CATCHING THE NEXT KOREAN WAVE

Korea continues to be the dominant F&B trendsetter for Asia. The immense popularity of the hallyu, the Korean cultural wave, means millions of Asian consumers outside Korea are watching K-dramas and are highly influenced by all aspects of Korean culture, from make-up and music, to fashion and food. Speed to market is key when everyone is on the lookout for the latest craze from Korea, and it pays for brands to keep a finger on the pulse of Seoul's cafes and kitchens.

Kimchi-inspired flavours are already a well-developed market in Asia, so brands looking to capitalise on the "next big thing" need to think instead about more sophisticated flavours that are still relatively uncommon outside Korea - like gochujang, a fermented hot pepper paste.

While spiciness is a welcomed and integral part of the large majority of Asian cuisines, fermentation is a trickier act to replicate. South-east Asian countries are more open to fermented flavours and smells from belacan, an intense umami shrimp paste, as seen by the successful gochujang-inspired burger released recently by a fast food chain in South-east Asia, whereas kimchi is still often served with minimal fermentation in countries such as India. There is a very fine line to walk when playing with fermentation flavours in Asia, and while some can be shared as is, others have to be adapted carefully to appeal to local tastes.

SAY CHEESE

Cheese is seeing huge growth in Asia. Although this region still accounts for only a sliver of global cheese consumption, the exceptional growth of cheese consumption, and for dairy products as a whole in Asia, means there are massive opportunities for companies to tap the myriad uses of cheese as a premium or upgraded addition to a product, especially as palates open up to richer, more diverse and more intense mature cheese tastes.

However, there is an even greater need to localise products featuring cheese to fit with the differing maturity and affluence across countries in Asia. The general trend we are seeing is that more affluent countries such as Japan and Korea are typically more open to "acquired" cheese flavours popular in Europe like blue cheese, whereas markets such as China, that are still in the infancy of cheese appreciation, prefer creamier and lighter tasting cheeses such as mozzarella. In South-east Asia, the taste of cheese is often associated with the "American cheese" slices adorning the top of burgers and widely available at supermarket chains, instead of European cheeses, but we expect that to change as the middle class continues to grow and this market matures.

In Asia, there is also a unique business case to look beyond traditional formats of cheese. Consumers here are open to trying cheeses in new formats such as in beverages, especially given the popularity of dairy caps on bubble tea products. A consumer survey by IPSOS found that integrating dairy with beverages leads to a 29 per cent improvement in the brand image, and a 34 per cent increase in the desire to purchase a product.

We have been watching this trend closely - some tea shops in the region have already introduced cheese caps to differentiate from the mainstream dairy caps on bubble tea by leading brands, and the next opportunity is to introduce a variety of cheese flavour profiles. Based on our research, we found that the profiles of cheesecake and fresh and creamy mascarpone appeal the most to consumers here due to the preference for sweeter tastes and the association with desserts.

FRESH CUP OF COLD BREW

Another Western influence that presents a big F&B opportunity in 2018 is coffee, as the coffee culture in Asia matures. While tea remains the dominant beverage of choice, the region has experienced the most dynamic growth in coffee consumption in the world since 1990 and new opportunities still abound. Although Asia already produces a large majority of the Robusta coffee beans available in the world, commonly characterised by a harsher, bitter and more acidic flavour, the growing popularity of the other main coffee bean, Arabica, which is used in most Western-style coffee, means this is set to change.

The prominence of coffeehouse-style coffee from the West, especially among younger generations in Asia, which form 60 per cent of the global youth population, means the demand for Arabica-based coffee is set to grow on an exponential trajectory in tandem with the purchasing power of this demographic group. A key example on the seminal shift afoot away from Robusta beans is the popularity of Cold Brew coffee, which is positioned as an even-less acidic product from other Arabica-based blends.

Cold Brew coffee stresses the pure, natural and authentic taste of the beans and eschews milk and sugar, often requiring extended "brewing" times - many times that of hot-brewed coffee. This is a challenge to the conventional coffee formulation in Asia, particularly for ready-to-drink and instant mixes meant to be ready in seconds, and overwhelmingly geared at traditional coffee profiles favouring the stronger tasting Robusta beans. The turn towards more artisanal blends of coffee grounded in Arabica beans suggests that a reckoning between Robusta and Arabica coffee is on the horizon for Asia.

OPEN TO OPPORTUNITIES

Openness should be a two-way street. As mature markets such as North America and Europe reach saturation point, this region offers tremendous opportunities that in many cases are still untapped. Apart from leveraging the rapidly growing purchasing power of consumers in Asia and the huge populations, food and beverage companies should also be open to experimenting to match local taste preferences and profiles, especially with the growing openness to try new flavours and tastes outside the familiar. While the diversity in Asia can be daunting, these three big taste trends show the huge potential for growth in 2018.

  • The writer is president & CEO of Kerry Asia Pacific, Middle East and Africa