Get All Access for $5/mo

How Asian Food & Drinks Market Is Diversifying Into Functional Offerings Asian food manufacturers are striving to expand their portfolio of functional offerings, going beyond soft drinks to sectors,says GlobalData, a data and analytics company.

By Shrabona Ghosh

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Canva

In recent years, especially after the pandemic, there has been a growing trend towards functional foods in the food and beverage industry. These foods offer additional health benefits beyond basic nutrition as they are designed to promote good health. However, with the pandemic waning, manufacturers are turning their attention to other functional attributes beyond immunity boosters.

Functional Foods and Natural Food Market witnessed the biggest growth during COVID. The global Functional Food Market grew from $180.59 billion in 2021 to $188.83 billion in 2022 at a CAGR of 4.6 percent and is projected to reach $285.30 billion by 2030.

In India, the health and wellness industry is dominated by the traditional, complementary medicine segment followed by the personal care, beauty, and anti-aging segment which was $124 billion in 2018 and is projected to reach $638 billion by 2025 with a CAGR of 22 percent.

Additionally, Asian food manufacturers are striving to expand their portfolio of functional offerings, going beyond soft drinks to sectors, such as bakery and cereals and savory snacks, as the region's fortified/functional bakery and cereals market alone was worth $2.4 billion in 2022, according to GlobalData, a data and analytics company.

"Despite the disruption to retail and on-premise distribution due to the pandemic, the demand for immunity-boosting dairy and soy food surged annually by 20 per cent in 2020. Similarly, vitamin drink brands, such as QminC and Carabao Group's Woody C-plus, received a positive reception in Thailand in 2021. This is attributed to consumers seeking various means to stave off infections in the absence of effective medications or vaccines against COVID-19," said Tim Hill, key account director, GlobalData Singapore.

"Functional/fortified products have remained a niche segment in the APAC food and beverage industry due to their above-average prices compared to regular variants. Considering the economic slowdown and inflationary pressures, the demand for such products will remain muted in the immediate future. Manufacturers can overcome this consumer resistance to price hikes by rolling out smaller product pack sizes with pocket-friendly price tags," added Hill.

With the fear of the virus dissipating, consumer preferences are changing. For instance, people returning to their hectic pre-pandemic lifestyles are seeking food and drinks that boost physical stamina and cognitive alertness, alleviate fatigue and stress, and aid in relaxation and sleep. "Asian food and beverage companies are exploring the market with various new functional offerings to tap this trend," said Bobby Verghese, Consumer Analyst at GlobalData.

Established brands are now investing in startups who have been able to bring the innovation factor through their venture providing proven health benefits claims, and bringing price viability to established brands. Startups benefit from the big brands' established distribution channels making it a win-win situation for both. Regulatory authorities need a different, innovative mindset for innovative and understanding functional foods. Considering the economic slowdown and inflationary pressures, the demand for such products will remain muted in the immediate future. Manufacturers can overcome this consumer resistance to price hikes by rolling out smaller product pack sizes with pocket-friendly price tags.

Shrabona Ghosh

Correspondent

A journalist with a cosmopolitan mindset. I lead a project called 'Corporate Innovations' wherein I cover corporates across verticals and try to tell stories on innovations. Apart from this, I write industry pieces on FMCGs, auto, aviation, 5G and defense. 
News and Trends

Noida International Airport Partners with Mahindra Logistics for Premium All-Electric Taxi Service

Passengers will have the flexibility to book rides through multiple platforms, including a dedicated mobile app, the NIA website, call centers, airport kiosks, and airline alliances. This multi-channel approach ensures 24/7 accessibility, catering to the diverse needs of travelers.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

News and Trends

Lightspeed Leads USD 40 Mn Series B Funding for SolarSquare

The company plans to use the fresh funding to expand its footprint to 50 cities, enhance its technology, hire talent, and strengthen its brand presence.

News and Trends

RapidCanvas Raises USD 16 Mn to Accelerate AI Innovation in Business Operations

The new capital will fuel the expansion of its innovative offerings and global reach.

News and Trends

growX Ventures Launches Fund II with a Target Corpus of INR 400 Cr

Fund II aims to target early-stage and growth-stage investments, backing 20–24 startups in deeptech sectors. It plans to deploy INR 10 crore in seed and INR 20–30 crore in Series B rounds.

News and Trends

K12 Techno Services Secures USD 40 Mn in Funding from Kenro Capital

The Bengaluru-based firm aims to expand aggressively, with plans to open 8–12 Orchids schools annually and onboard 100–150 schools under the Eduvate umbrella each year.