ASEAN health and wellness boom spurs Australian innovation potential: CSIRO and KPMG

18 Sep 2018 --- The ASEAN region’s growth prospects and market conditions, coupled with an increased interest in health & wellness, have created a fertile ground for Australian food innovators and companies to do business in the region, according to a report by Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) and professional service company KPMG.

ASEAN, or the Association of Southeast Asian Nations, currently has ten full membership countries – Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – as well as one “observer” member – Papua New Guinea.

The report, titled Food for health: Trends and opportunities in health and wellness in the ASEAN region, highlights that ASEAN is a key growth market for “Health & Wellness food and beverages,” one of the fastest growing food segments globally, accounting for 20 percent of the US$2.181 billion global packaged food market. According to the report, daily protein consumption in ASEAN has grown by 50 percent over the past 30 years.

“With a population of 643.5 million in 2017 and an expected GDP of A$7,317 billion by 2028, ASEAN presents a high growth opportunity for Australian food producers,” Ben van Delden, KPMG Australia Partner and Agtech Sector Leader, tells NutritionInsight. “However, success will be underpinned through taking a country-specific approach when accessing these markets. Products, market entry strategies and marketing campaigns must be designed to reflect the consumer within individual countries – mapping these successfully is challenging due to the diversity across ASEAN.” 

“ASEAN is not a uniform market, so it is important to understand the unique consumer segments within each country and tailor products accordingly. However, at a high level, countries that have relatively high or growing populations and a high or growing GDP per capita, should be considered. This would indicate that the market has scale and that consumers can afford premium Australian products,” van Delden continues. 

Considerable market opportunities lie in Singapore, Malaysia and Indonesia, van Delden notes, with Vietnam also showing potential as a high growth market for Australian food producers. 

Key selling points of Australia’s food producers are the country’s “clean and green” credentials combined with an ease of doing business – including access to reliable and efficient logistics and security of supply, according to Professor Martin Cole, Deputy Director of CSIRO Agriculture and Food.

“It is of paramount importance that we maintain our high food safety standards as this is a key selling point within ASEAN markets,” Cole tells NutritionInsight.

Personalized approach
As is the case in the wider Asian region, the market for probiotics in ASEAN is growing by 7.1 percent per year. On top of this, over a third of ASEAN consumers are reportedly interested in personalized nutrition solutions. The rise of lifestyle-related diseases is putting a spotlight on the importance of nutrition for overall health & wellness.

“For the ASEAN region, the links between nutrition and health are increasingly under the spotlight. The region is forecast to experience a sharp rise in chronic health conditions such as obesity, Type 2 diabetes, cardiovascular disease and cancer. The role that food and diet can play to prevent these illnesses becomes crucial,” says Cole.

“Using emerging science and Australian innovation in areas such as functional foods, alternative protein, and CSIROs capabilities in digestive testing and modeling means, as a nation, we have a compelling offer to meet the needs of the ASEAN market,” he adds.

The report suggests three core approaches for Australian businesses entering the ASEAN market in health and wellness products:

Personalizing to local consumer preferences to specific markets 
Producers need to ensure that they meet the specific local needs relevant to preferences in a specific market. Incorporating popular Asian ingredients, marketing and branding products in a tailored way. Utilizing emerging channels to market, such as e-commerce, will enable Australian success when looking to success in ASEAN.

Leveraging consumer awareness on health and wellness and increasing affluence 
As the ASEAN consumer becomes educated on health & wellness, they are likely to seek out products that align with their requirements. They also have an increasing ability to pay for premium products, demanding healthier options that concurrently meet the needs of modern lifestyles. The segment is significant and growing – presenting opportunities for stakeholders that can build targeted food solutions with health and wellness at the core.

“Australian companies need to understand the nuances of the consumer taste preferences in these markets where cultural eating habits have had a big influence on food choices,” van Delden tells NutritionInsight. “ASEAN is a very big market (or rather a collection of submarkets) and one size will not fit all in terms of product market entry. To succeed, careful consideration is needed to think as much about the new products for delivering better health outcomes as we do about the packaging of these and language and promotional mechanisms to get consumer buy-in.”

Partnering for success 
Global players, across industries, are recognizing the region’s potential for premium health & wellness, according to the report. Australia has a strong reputation across ASEAN for being trusted and competent business partners. Using existing relationships and partnering with local stakeholders can drive mutual gain.

“Australian food, health and wellness businesses are well-placed for success in ASEAN. Australian businesses and researchers are known for their strengths in this area and can apply expertise and creative development to form products and business models that meet the complex needs of the ASEAN consumer. However, there is work to be done to finesse market entry approaches and ensure alignment to the complex region and its dynamic base of consumers,” van Delden notes.

Edited by Lucy Gunn