In a recent report, GlobalData highlights the transformative impact of functional snacking on the Asia-Pacific (APAC) food industry, driven by increased health awareness, changing dietary preferences, and the growing concern for lifestyle-related diseases.
Priyanka Jain, Consumer Analyst at GlobalData, emphasized that despite diminishing COVID-19 concerns, consumers in the APAC region are increasingly drawn towards natural, organic, and functional food products perceived to address health concerns. The report aligns with GlobalData’s 2023 Q4 consumer survey, revealing that 62% of APAC consumers base their food purchases on how well the product or service impacts their health and well-being.
The health trend has given rise to a demand for probiotic and nut-based snacks, contributing to the expansion of the APAC food market with health and wellness attributes at a value compound annual growth rate (CAGR) of approximately 7–9% from 2017 to 2022.
Tim Hill, Key Account Director at GlobalData Singapore, noted that while premium prices pose a challenge in the cost-conscious retail market, the impact of inflation and geopolitical conflicts adds pressure on food manufacturers to pass on high input costs to consumers to protect their margins. The survey indicates that 49% of APAC consumers express concerns about the inflation impact on their household budgets, leading to a shift towards cheaper brands and stores due to the cost-of-living crisis.
Priyanka Jain emphasized the need for manufacturers to strike a balance between price and health benefits. The report suggests that increasing engagement in physical activities will drive demand for functional on-the-go offerings, particularly in snacking and mealtime accompaniments. For instance, ProV Foods introduced a range of pre-soaked nuts under the ProV Lite Activated Nuts brand in India.
Despite functional and fortified food products being considered niche in the APAC region due to above-average prices, Tim Hill suggests that manufacturers should highlight product benefits to expand their consumer base. Leading companies are exploring alternative ingredients and production techniques to develop healthier alternatives with personalized claims, such as promoting gut health, blood circulation, and energy-boosting. The report underscores the importance of manufacturers creating awareness through effective marketing initiatives as macroeconomic conditions improve, encouraging consumers to trade up to premium food products more frequently.