The Asia Food Challenge: Understanding the New Asian Consumer

The report looks at six key trends highlighting the evolving tastes and demands of Asian consumers. Coupled with changing demographics, rising affluence and growing incomes, the food choices of the new Asian consumer will drive USD 2.4 trillion (55%) of the USD 4.4 trillion incremental food spend in the next decade. The evolving behaviors can be summarized into the following six consumer trends, which often overlap and significantly influence each other:

• Healthier diets – Replacing processed foods, red meat, and sugar with healthier alternatives

• Fresh foods – Choosing quality products associated with freshness

• Safe and traceable sources – Requiring greater food safety and product validation measures

• Sustainable consumption – Tackling the environmental impact of food consumption

• Alternative proteins – Growing interest in innovative plant-based and cultured meat alternatives

• Online purchasing – Increasing use of e-commerce to enable convenient food purchasing and delivery

Ping Chew, Asia Head of RaboResearch Food & Agribusiness, commented on the need for companies to look at their route to market strategy to serve the new Asian consumer. He said: "Supply chain transformation will be a central theme across Asia to serve the needs of a growing population and emerging ESG concerns from both regulators and consumers. Simultaneously, as the distribution and last-mile infrastructure become digitalised, F&B companies will also need to adapt their route to market strategy to serve the new Asian consumer. This will require partnership across the value chain between companies, investors, research labs & innovators, and of course, governments."

The investment opportunity highlighted in the report comes in spite of a big increase in Agri-tech investments, which have almost quadrupled between 2014 and 2020. It shows bountiful opportunities for investors and business owners, who will play a pivotal role in the future of the industry when addressing the needs of Asian consumers.

When considering the key trends, this research indicates that companies with a broad emphasis on health, digital and sustainable offerings have enjoyed valuation premiums over the last five years, compared with companies that did not.

In conclusion, serving the new Asian palette, adopting new business models in the digital era, and investing in emerging agri-food trends will act as an essential guide for those investing in this space. Feeding Asia’s 4.5bn consumers in 2030 will be a challenge, but for those who invest creatively in trends driving the future of Asian food, it will be a rewarding one.

The report and other materials can be accessed at www.asiafoodchallenge.com (external website)