EUROMONITOR INTERNATIONAL

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Understanding Packaged Food Trends In Asia Pacific

By Farzana Mohsin May 2005

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Presentation Outline
Euromonitor - An introduction Food Product Coverage Asia Pacific - Country Coverage Emerging Food Trends Food - A Global Overview Packaged Food Market

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Understanding Euromonitor International & Its Definitions

- An Introduction - Packaged food sectors - Asia Pacific countries

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Euromonitor - An Introduction
Business info provider & analyst since 1972 Regional Offices in London, Chicago, Singapore, Shanghai Global network of researchers (70+ countries) Independent & privately owned Hardcopy report, directories & online systems Client-driven consultancy projects Client base:
International FMCG manufacturers, Retailers, Packagers, Ingredient suppliers, & Banks/ Consultancies

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Product Coverage - Packaged Food

19 Packaged food categories, 250 sectors:
Baby Food Bakery Products Canned Food Chilled Food Confectionery Dairy Products Dried Food Frozen Food Ice-Cream Meal Replacement Drinks Noodles Oils & Fats Pasta Ready Meals Savoury Snacks Snack Bars Soup Spreads Sauces, Dressings, Condiments

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Country Coverage - Asia Pacific

12 major countries + 33 minor countries:
China Hong Kong, China India Indonesia Japan Malaysia Philippines Singapore South Korea Taiwan Thailand Vietnam

NB. Euromonitor has covered Australia & New Zealand separately under Australasia. For list of minor countries, please approach us after conference.

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Emerging Trends in Packaged Food in Asia Pacific

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1) Convenience
Packaging plays a huge role
Increasing hectic lifestyles Consumers seeking convenience in all forms (e.g. Shopping habits, Clothing, F&B etc) Increasing number of individual portions packaged to be consumed on the move or outside the home Increasing need for packaging that are easy to open and can be re-sealed

Easy to prepare
Rise in easy to prepare food products Instant soup, greater variety in cup noodles

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2) Health
Emphasis on Functional/FortifiedFood
Rising consumer health consciousness Gum fortified with vitamin supplements such as multi vitamins (8 types), royal jelly, blue berry extract, amino-acid Instant noodles/soup fortified with collagen

Emphasis on ingredients & traceability

Result of food scandals & health crisis Organic, all natural, additive free Food safety is a priority

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3) Taste
Products with poor taste will not sell
Manufacturers receive support from ingredient suppliers New flavors developed to make end-product > attractive Exotic flavors successful as people travel more & want to try new cuisine at home Adult-oriented flavors play a greater role

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Packaged Food Trends In Asia Pacific

- Biggest Sectors - Strongest Growth - Key Growth Drivers

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Total sales 2004 US$ million Per capita spend 2004 US$

1,600,000.00

1200

Global Packaged Foods Retail Sales 2004

1,400,000.00 1000 1,200,000.00 800 1,000,000.00 800,000.00 600,000.00 400 400,000.00 200 200,000.00 0.00
a fic rl d pe ca ca pe asi ast er i aci eri Wo u ro ral u ro P m m E le E E st A ia n i dd Au in A ern ast er As rt h Lat dM e st No E n W aa f ric A

600

Leading global players: 1: Nestl SA 2: Unilever Group 3: Kraft Foods Inc

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%value sales

Asia Packaged vs Unpackaged Foods Sales

100 90 80 70 60 50 40 30 20 10 0

Unpackaged Packaged

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Total sales (US$ mn) - Retail

Japan: Total sales US$170,000 mil (2004) Per caps expend. US$1,370 Market value growth 3.3%
South Korea

400
Per capita sales 2004 (US$)

350 300

Hong Kong Singapore

Taiwan

Asia Packaged Foods Sales 2004

250 200 150 100

Philippines Thailand Malaysia

Developing countries (Strong growth) DD factors: consumer sophistication, health consciousness, working mothers SS factors: Introduction of new food products, growth of modern retail outlets > Developed countries Slower growth but willingness to pay for value-added, premium products
Indonesia

China

50
India

Vietnam

0 -50 0 2 4 6 8 10 12 14 16
% value CAGR

Source :Euromonitor International - Packaged Foods Database 2004

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Leading players - Asia

Nestl SA Ting Hsin International Group Lotte Group Unilever Group Uni-President Enterprises Corp Indofood Sukses Makmur Tbk PT Kuok Oils & Grains Pte Ltd Danone, Groupe Seoul Dairy Cooperative Nong Shim Co Ltd

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Asia Pacific: US$297 billion Mainly processed meats & fish, concentrated in > developed countries

Others 21%

Chilled food 16%

Packaged Foods in Asia by Type 2004

Frozen food 3% Ready meals 4% Canned food 5% Confectionery 5% Sauces, dressings and condiments 8%
Strong CAGR in 1998-2004 (value) : Indonesia +17% Vietnam +12% India +9% Philippines +9% Strong CAGR in 1998-2004 (value) : Vietnam +16% Indonesia +15% China +15% Philippines +12%

Bakery products 13%

Dried food 13% Dairy products 12%

Breakfast cereals Small but dynamic niche, posting high growth rates

Biggest sectors - Global 1) Bakery 2) Dairy Products 3) Chilled Food 4) Confectionery accounting for 60% global sales

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Distribution Trends in Packaged Food in Asia Pacific

Distribution Trends in Packaged Foods

55 25 35 45 15 5

% Value sales 2004

Supermkts/hypermkts

Independent stores

Std convenience stores Petrol/gas/service stations

Internet sales

Discounters

Others
5% 15% - 5% 55% 2 5% 3 5% 4 5% 6 5% - 15%

-5

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Value growth 2004

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Contact Details
Farzana Mohsin Research Manager, Asia Pacific 3 Lim Teck Kim Road #08-02 Singapore Technologies Building Singapore 088934 +65 6429 0590 farzana.mohsin@euromonitor.com.sg