Asia Pacific Food & Beverage Market 2022

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Asia Pacific Food & Beverage Market 2022

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saric.kevin

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Food, Beverages and Tobacco in Asia Pacific

December 2022

© Euromonitor
© Euromonitor International
International 2021.
2022. All rights
All rights reserved.
reserved.
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The data included in this report are accurate according to

Euromonitor International’s market research database,
at time of publication: December 2022
Contents

Introduction

Production outlook

Competitive landscape

Foreign trade

Country snapshots

Scope
Asia Pacific remained the largest global
producer of food, beverages and tobacco in
2021, with sales valued at USD3,809 billion.
With the release of pent-up demand, the
industry’s turnover witnessed an increase in
2021. Going forward, expanding domestic
markets and rising productivity are expected
to stimulate the industry’s growth. However,
with tightening global food supplies amid
climate change and geopolitical conflicts,
challenges persist, especially for major
regional food importers.

Disclaimer
Much of the information in this briefing is of a
statistical nature and, while every attempt has
been made to ensure accuracy and reliability,
All values in this report are stated in US dollar terms, using a fixed 2021 exchange rate. All data Euromonitor International cannot be held
are expressed in constant terms, inflationary effects are discounted. responsible for omissions or errors.
Figures in tables and analyses are calculated
The regional data represented in this report include all countries that fall within Asia Pacific. from unrounded data and may not sum. Analyses
The countries in the region researched by Euromonitor International are highlighted in light found in the briefings may not totally reflect the
blue, and Country Snapshots are available at the end of the report. companies’ opinions, reader discretion is advised.

Key findings
Rapidly expanding populations and projected significant economic growth will strengthen Asia
Asia Pacific to continue to Pacific’s position as the largest food producer in the world. Between 2021 and 2030, the food,
lead global food beverages and tobacco industry’s turnover in Asia Pacific is forecast to increase by more than USD1
production value growth billion and reach USD5.1 billion. Growing middle classes are set to stimulate domestic demand for
animal proteins, such as meat, fish and dairy products.
Fishing is forecast to lead the food industry’s absolute value growth over the forecast period in Asia
Pacific. The fishing sector’s growth will mainly depend on growth in demand in domestic markets,
High seafood demand to
as millions of people in the region rely on seafood for protein intake. However, overexploitation of
drive the fishing sector’s
the region’s fisheries remains a major threat to the sector’s future development. According to the
expansion
Indonesian Marine Affairs and Fisheries Ministry, 90% of Indonesian fish catch come from areas
that are already overfished.
While soft drinks are set to remain the largest beverages category in Asia Pacific through to 2030,
Growing importance of
changing consumer attitudes to health and wellness are expected to encourage companies to offer
healthy living resonates
a greater selection of low sugar alternatives. Meanwhile, spirits are forecast to grow at the fastest
with increasing demand
pace, supported by reopening of social gathering places and urban consumers’ searches for varied
for low-sugar beverages
experiences.
Asia Pacific remains among the largest food importers globally, driven by expanding demand from
growing populations and changing dietary preferences among more affluent population segments.
Asia Pacific remains a With global food commodity markets facing considerable turbulence, given the ongoing impact of
significant importer the war in Ukraine and climate change, some emerging Asian countries might face growing food
security concerns. Emerging economies remain the most vulnerable to supply shortages and price
increases, prompting the need to diversify supply markets and enhance industry productivity.
© Euromonitor International
Production outlook

Asia Pacific to lead food, beverages and tobacco production value growth globally
Asia Pacific remains the largest food, beverages and tobacco producing
region globally, accounting for nearly half of global production value in
2021.
Food, beverage and tobacco production value per capita in Asia Pacific
nevertheless continues to be among the lowest globally, outpacing
only that in the Middle East and Africa, as of 2021. Undernourishment
is still prevalent among the poorest population cohorts in some
countries in Asia Pacific. For example, in Pakistan, more than 20% of
population is undernourished, according to the UN World Food
Program.
Given intensifying food insecurity issues due to the war in Ukraine,
supply chain disruptions and adverse climate change impact, the Asian
Development Bank is preparing to allocate USD14 billion in Asia Pacific
over the period to 2025. The funds will be devoted to strengthening
farming practices and resilience to climate change, food production
and distribution programmes, and water resources management.
Going forward, Asia PacificMiddle
is expected to demonstrate the fastest
East and Africa
growth in the food and beverages industry globally. Growth is
expected to be supported by the modernising of farming practices,
with rising productivity and crop yields. Source: Euromonitor International from national statistics

Revenues of food and beverages producers to rise over 2022

The post-pandemic recovery across the region accelerated the
food, beverages and tobacco industry’s growth in 2021.
Nevertheless, the recovery process has varied across the region’s
markets, due to uneven containment of COVID-19 and contrasts
in vaccine distribution timelines.
In 2022, Russia’s invasion of Ukraine, coupled with adverse
weather events, contributed to further disruption in global raw
material supply chains, pushing food prices up to record-
breaking heights. Due to strong trade demand and high domestic
demand for lower priced local produce, the production value of
Asia’s food, beverages and tobacco industry increased year-on-
year in 2022.
China, which remains the largest food and beverages producer in
the world, and accounts for more than half of the industry’s
production value in Asia Pacific, is set to lead the industry’s
absolute value growth over the forecast period. Rising income
levels, productivity growth and food security concerns are
expected to contribute to the industry’s growth in China.
Meanwhile, Bangladesh is forecast to record the fastest growth
rate, thanks to a rapidly increasing and urbanising population,
which will increase demand for processed foods. Source: Euromonitor International from national statistics
© Euromonitor International
PRODUCTION OUTLOOK 10
10

Fishing to spur the food industry‘s growth, with Indonesia in the lead
Fish and fish products, and vegetable and animal oils and fats
are forecast to lead the food industry’s absolute value growth
over the period to 2030 in Asia Pacific. The fishing sector’s
growth will mainly be driven by demand growth in domestic
markets, due to low exports in this category, while vegetable
and animal oils and fats growth will be supported by
increased demand in both domestic and foreign markets.
According to the UN Food and Agriculture Organization,
global consumption of vegetable oils is predicted to outpace
production, and animal fats and vegetable oils are expected
to be the single biggest contributor to higher import bills over
2022 globally.
The fishing industry’s growth over the forecast period is
predicted to be largely concentrated in Indonesia. Indonesia is
the world’s second largest producer of fish after China, and is
set to almost double its revenues from fishing by 2030.
However, rapidly depleting fish stocks pose a threat to the
industry’s future development. Although the country has set a
goal to make the fishing industry sustainable by 2025, illegal
fishing practices, lack of monitoring, and subsidies that
enhance overexploitation may impede any improvements. Source: Euromonitor International from national statistics

Sweetened beverages to drive soft drinks growth in Asia Pacific

In 2021, Asia Pacific was the largest beverage producing
region in the world, accounting for nearly 40% of global
production value in that year.
Soft drinks accounted for the majority of beverage production
in 2021, and is set to remain the largest beverage category in
terms of production value by 2030. Growth in soft drinks is
projected to be driven by sweetened and flavoured waters
(such as lemonade, orangeade, cola, fruit drinks and tonic
waters). However, an increasing consumer preference for
sugar reduction may encourage suppliers to introduce more
low-sugar products. According to Euromonitor International’s
Health and Nutrition survey 2022, nearly 40% of Indonesian
consumers prefer limited sugar or no added sugar products.
Asia Pacific’s second largest beverage sector by value, spirits,
is set to record the highest value growth over the forecast
period. Although the sector experienced a dip in sales during
the COVID-19 pandemic, the lifting of restrictions on bars,
clubs and karaoke clubs, coupled with the reopening of
countries’ borders to inbound tourism, should help to fuel
sales of spirits.
Source: Euromonitor International from national statistics

Growth to be driven by expanding fish, vegetable oils and animal fats production

Source: Euromonitor International from national statistics

Food industry’s structure remains diverse across Asian countries

Source: Euromonitor International from national statistics

China and Indonesia to lead tobacco production in absolute terms

Source: Euromonitor International from national statistics

Growing input costs will fuel acquisitions in food industry in Asia Pacific
Asia Pacific’s food and beverage industry has a relatively high
concentration of large national and international companies,
accounting for the majority of the industry’s production revenues,
especially in developed economies, such as Japan and South
Korea.
The beer industry in Asian economies is highly concentrated
among the top five companies in terms of turnover in each
market. The highest concentration levels were recorded in
Indonesia in 2021, with the top five companies accounting for
more than 90% of total production value.
Soaring energy and raw material costs may squeeze some smaller
food producers out of the market, further increasing
concentration levels within the industry. For example, Nestlé
India acquired the pet foods business of Purina Petcare India
effective from October 2022, allowing the international
conglomerate to enter the fast-growing pet foods market in India.
Due to high input costs and the need to strengthen supply chains,
integration with agricultural businesses may intensify over the
near term, allowing companies to achieve low feedstock prices.
Source: Euromonitor International

Large companies dominate the industry in China and Japan

Source: Euromonitor International from national statistics

Asia Pacific exports growth to be driven by Southeast Asian economies

Asia Pacific’s exports of food, beverages and tobacco grew
over the review period, with a considerable jump in total
exports in 2021 amid the release of pent-up demand globally.
Some Southeast Asian countries, such as Indonesia,
Singapore and Malaysia, are net exporters of certain
commodities. Vegetable oils, animal fats and coffee, tea,
spices and ready meals are Southeast Asian economies’ main
exported goods, thanks to the region’s strong focus on
agriculture.
According to the Food and Agriculture Organization of the UN
(FAO), Malaysian and Indonesian palm oil exports have
already reached 90% of the world’s palm oil exports.
Meanwhile, Vietnam remains the second largest producer of
coffee globally after Brazil, exporting 739,000 tonnes of
coffee during the first four months of 2022 alone, according
to Vietnam’s news agency.
The adoption of new technologies in agriculture, increased
food processing capacity and rising agricultural productivity
are set to be the main growth drivers of future food exports
from Asia Pacific. Source: Euromonitor International

China’s dependency on food imports continues despite efforts to increase production

Over the review period, Asia Pacific recorded the second
highest import growth among global peers, after Eastern
Europe, boosted by rising middle class demand for animal
products such as meat, fish and dairy. In 2021, Asia Pacific was
the world’s second largest importer of food, beverages and
tobacco products, after Western Europe. Meat, vegetable oils,
animal fats and fish remained the most imported food groups in
the region.
China remains by far the largest region’s importer, with the
country’s imports value doubling over the review period.
Although China is actively striving to achieve food self-
sufficiency, growth in production output lags behind rapidly
rising demand and changing dietary preferences among Chinese
population.
Severe droughts in food exporting countries, such as Argentina
and Brazil, in 2022, coupled with Russia’s invasion of Ukraine
triggered a major supply shock, leading to a wave of food
commodity export restrictions globally. Due to these challenges,
some Asian countries might seek to diversify food imports and
strengthen food self-sufficiency efforts going forward. Source: Euromonitor International