Opportunities in Asia’s F&B market

Asia’s total spending on food is expected to reach over US$8 trillion by 2030, from US$4 trillion in 2019, according to the Asia Food Challenge Report published in 2019. Macroeconomic trends such as a growing population and burgeoning middle class are among key factors driving food spending in Asia.

Asia’s growing population

Population growth is an important driver of increased food demand. It also changes the types and quantities of food demanded per person. As the average income increases, diets have changed to include more calories and more varied and expensive food. Asia’s growing population will drive an increase in food spending and demand for larger qualities and better-quality food.

Rise of the Asian Middle Class 

The size of Asia’s middle class is set to increase from 2 billion in 2020 to 3.5 million in 2030. With higher expectations of food quality, this growing market of relatively affluent consumers will lead to a higher spending on food. This demographic will also drive food consumption trends relating to health and sustainability.

Rapid Urbanisation

By 2030, more than 55% of the population of Asia will be urban. As younger generations of educated consumers move to cities, an increasing number will live in smaller households, living on their own or with friends. This changes how consumers buy and consume food, driving food delivery services and online grocery sales.

In China, changes in people’s lifestyles during the pandemic restrictions have led to a booming ready-meals industry. China’s pre-prepared dishes generated about 550 billion yuan, with an expected CAGR of 13% over the 5 years, according to a SCMP report.

The gross merchandise value (GMV) of Southeast Asia’s on demand food delivery market is expected to reach $49.72 billion from 2030, up from $15.15 billion in 2021, according to a 2021 Frost & Sullivan report. The growth is attributed to a surge in internet subscriptions and mobile applications. Major on-demand food delivery operators in the region are also expected to expand their product portfolios to include deliveries of food and beverage, fresh foods and groceries.

Younger, educated generation of consumers 

With a growing awareness of the health benefits of a plant-based diet and desire to reduce their environmental impact, more millennials and Gen Zs are adopting flexitarian diets and are more likely to seek out plant-based meat and milk alternatives.

Research by market research firm Packaged Facts found that younger consumers, especially those between 18 and 44 years old, are most likely to purchase and eat plant-based meat products. Plant-based meat products are gaining popularity with Gen Zs and millennials due to health concerns and a growing awareness of the environmental impact of industrial farming.

GlobalData also found that ASEAN countries had a larger percentage of alternative protein consumers and they have the highest per capita expenditure on meat substitutes.

Aging population  

China and India are set to be the largest ‘silver markets’ in Asia by 2030, leading to greater demand for food, drink, vitamins and dietary supplements targeted towards seniors.

While aging populations have an impact on the economy and society, it also presents business opportunities, especially in the area of elderly food and nutrition. As the elderly have different needs, food products that are modified in areas such as taste, texture, nutrition and ease of preparation can better cater to their preferences and well-being. To address the needs of the elderly, a growing number of F&B companies are turning to fortification, which is the addition of nutrients such as fibre or protein to food.