The Evolution Of Snack Trends In Asia-Pacific
Tuesday, March 17th, 2020
APAC consumers seek a balance of healthfulness and sensory pleasure from their bakery and confectionary brands. As a result, manufacturers face the challenge of formulating products with more natural and nutrient-rich ingredients with less artificial additives, without compromising on the consumption experience. By Bobby Verghese, Consumer Markets Analyst at GlobalData.
Seismic Shift In Consumption Frequency And Occasions
While snacking is a traditional lifestyle habit in the Asia-Pacific, there has been a seismic change in the way that consumers relate to snacks in recent years. Snacking frequency has risen in-line with increasing household disposable incomes and 24/7 access to products, owing to the explosive growth of online/offline retail. Lifestyle changes have led to an evolution of snacking occasions with, for instance, hectic routines have led to shorter food-prep times and fragmented meal times. Time-pressured consumers are also propelling the ‘on-the-go’ consumption trend.
Bakery and confectionery are the most popular snack foods in the region, with 60 percent of respondents saying that they typically snack on biscuits/cookies, and 56 percent saying the same for chocolates as per GlobalData’s Q3 2018 Asia-Pacific survey. The APAC market for Bakery and Cereals is forecast to grow from an estimated USD$115.2 billion in 2019 to USD$145.9 billion by the year 2023. The confectionery market in APAC is pegged at USD$44.4 billion in 2019, and is expected to rise to USD$55.1 billion by 2023.
According to a survey conducted by GlobalData in 2018, 61 percent of respondents said they enjoy snacking between meals, with female consumers taking the lead. While the majority (52 percent) of respondents stated that they tend to snack between lunch and dinner, a significant number like to snack on other occasions. This implies opportunities for “meal replacement” snacks that are loaded with protein and energy boosters, snacks such as lotus seeds (fox nuts) for entertainment occasions, and snacks with ingredients such as ginseng, matcha or turmeric to aid in relaxation and rejuvenation.
Pertinent Snacking Trends In Asia-Pacific
Unusual Flavour Experiences For Experimentative Millennials & GenZ Consumers
Millennials/Gen Y consumers (born 1981-1999) who are entering their peak earning years are influencing every aspect of the food and beverage industry. Millennials and their successors, the GenZ/iGen are at the helm of the evolution of the snacks market. These well-heeled and net-savvy youth are demanding products with a fusion of international and local flavours and ingredients. In fact, GlobalData’s 2019 survey states that 23 percent of Millennials say they typically choose unusual flavours of chocolate, confectionery and desserts.
Manufacturers are keeping the bakery and confectionery category fresh by taking inspiration from the beverage industry to create new and uncommon flavour experiences for this curious and experimentative cohort. Examples include Halls blue-soda-flavoured candy launched in Thailand, which captures the flavour of blue soda soft drinks, and Skittles Sweet Heat Candy, a product launched in Australia, which provides a “hot twist” with flavours such as Scorchin‘ Pineapple, Fiery Watermelon, Sizzlin’ Strawberry, Lemon Spark, and Picante Passionfruit.
Pulse Candy, a product launched in 2016 by the Dharampal Satyapal Group in India became an instant success with its indigenous ‘Kacha Aam’ (raw mango) tangy flavour, which struck a chord with local consumers. By the following year, the product garnered about INR 300 crores (~USD$46.9 million) surpassing several leading confectionery brands in the country.
Brands Are Going Glocal—Think Global, Act Local
Localisation is a key topic for MNC confectionery manufacturers, with brands exploring new ways of aligning themselves with local tastes. Kit Kat continues to release exclusive Japanese flavours (e.g. volcanic and ruby) to the locals. Competitors have begun mimicking Kit Kat’s strategy, with Mars recently releasing its M&M line of confectionery with sweet & spicy flavour in China to allure local palates. Similarly, Kaiser Bob Chocolate, launched in Taiwan, is infused with the taste of Bubble Tea, a drink that originated in Taiwan and is now trending in the Chinese market.
Hybrid Or Crossover Snacks Leveraging Strengths Of Multiple Product Categories And Brands
Market leaders are experimenting with cross-category products that blend the strengths of their leading bakery goods and confectionery brands to entice consumers with out-of-the ordinary consumption experiences. For instance, Mondelez International recently introduced the ‘Cadbury Dairy Milk Silk Oreo’, a Cadbury chocolate bar embedded with pieces of the Oreo biscuit to provide an extra crunch. They also launched an Oreo Moments biscuit range, which comprises Oreo biscuits coated in Cadbury chocolate for the Indian market.
Nutrient-Fortified Products With Functional Benefits
Bakery and confectionery makers are exploring new options to endow products with a healthy halo to appease concerned parents. Products fortified with nutrients such as vitamins, protein and antioxidants are poised to gain favour among these shoppers.
For instance, Fanette Enriched Snacking Chocolate—introduced in the Indian market—is positioned as a healthy snack as it incorporates “superfoods” such as goji berry and chia, which are packed with nutrients and bioactive compounds. Similarly, Fruits and Roots brand of cookies, which claims to contain real fruits vegetables such as beetroot, and Darrell Lea branded chocolate with a ginger nougat centre made with real ginger, were rolled out in Australia. Em’s Power Cookies, a protein cookie launched in New Zealand, is enriched with hemp protein, while Cadbury BournVita cookies unveiled in Australia and India claim to be rich in iron. These fortified products are thereby positioned as an ideal nutritious breakfast option for children.
Personalised Snacks With Targeted Health Benefits
In a bid to differentiate their offerings from the plethora of products in retail shelves, manufacturers are developing custom-tailored products that address the distinct health and dietary needs of specific consumer cohorts. For instance, the Indian market witnessed the launch of Ketofy Keto, positioned as a low-carb and low glycaemic index cookie suitable for consumers adopting the Keto diet, and the Early Foods brand of protein cookies for pregnant and breastfeeding women with ingredients such as dry fruit and seeds that could help boost protein intake during pregnancy or while breastfeeding.
Hitting The Sweet Spot With Less/No Sugar
With sugar concerns beginning to influence the purchase of bakery and confectionery products, in the soft drinks sector, manufacturers are formulating products with less sugar, natural sweeteners, and artificial sweeteners for increasingly mindful consumers who are seeking guilt-free indulgences. For instance, Tic Tac Gum, a sugar-free chewing gum product with the iconic shape and packaging of Tic Tac mints, is one option for sugar-sensitive consumers.
Indulgence, Health & Wellness: Striking A Balance
While Asia-Pacific lags behind North America and Western Europe in terms of per capita consumption of bakery and confectionery, the region presents a treasure trove of opportunities given its large consumer base. The relatively youthful demography is fuelling innovation in snacking products.
APAC consumers seek a balance of healthfulness and sensory pleasure from their bakery and confectionary brands. As a result, manufacturers face the challenge of formulating products with more natural and nutrient-rich ingredients with less artificial additives, without compromising on the consumption experience. Sugar taxes and rising commodity prices also pose a challenge to manufacturers operating in price sensitive markets in the region.
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