2023 Export Predictions
Reflecting on 2022, here are our observations, predictions and suggestions for Asia export markets in 2023.
Opportunities for F&B brands
Non-alcoholic drinks, dairy, plant-based proteins, and healthy foods were the top 4 in-demand categories revealed in our 2022 Annual Distributor Survey of 1900+ importers and distributors across Singapore, Malaysia, Thailand, the Philippines, Vietnam, Indonesia, Hong Kong, Taiwan and South Korea.
The mega trend towards meat protein alternatives is also visible across Asia with 7.5% of distributors actively on the lookout for brands in this category. Sweet and savoury snacks are also very popular, reflecting that even while consumers are trying to do better by their bodies, impulse snacks are still very appealing. Predictably, dry goods and canned food remain popular given their long shelf life and easy handling.
86.1% of the distributors surveyed told us they are currently reviewing new F&B distribution opportunities. As at September 2022, around half currently work with food and beverage brands from the UK (41%), Australia (55%) and New Zealand (51%). This tells us that there is still room for imported brands from these markets in high-growth Asian markets – distributor portfolios are not yet saturated.
Taking advantage of these opportunities
To cut through the noise it is important for brands to present commercially attractive opportunities to target distributors. Importers across Asia are always on the lookout for new and innovative brands, but they need to be confident that a new brand will fit within the current category landscape in their market.
With distributors having a steady stream of suppliers to choose from, for brands to stand out they need to find ways to get potential importers to take notice of them.
We suggest investing time to understand each target market and create a tailored compelling commercial pitch that takes into consideration local market dynamics, including current competition, category pricing structures and promotional mechanisms. While brand and product are important, the proposition must make commercial sense for the distributor.
Make it easy for your target distributors to say "yes, I’m interested" by ensuring that you can compete within your category with a realistic pricing structure and be prepared to invest in the market to build your brand.
Brands should consider going over and above to win their target distributors by carrying out and presenting a commercial feasibility study for their brand, rather than relying on the distributor to do this. It shows you are serious, and it saves the distributor time, which they will appreciate.
The main challenges
As discovered in our 2022 Annual Distributor Survey, the top 5 challenges (as seen by leading importers and distributors) are:
1. Price
2. Logistics + Freight
3. Marketing Support
4. Unfavourable FX
5. Lack of awareness
Relatively high product and supply chain costs mean that brands from the UK, Australia and New Zealand generally hit the shelves at higher retail pricing than that of some competing export nations.
This said, gaining an in-depth understanding of how the supply chain works in each target market allows exporters to ensure that stakeholders (distributors and retailers) get the margin they need to ensure commercial viability, but that the cost build does not blow out. Brands that allow distributors and retailers to set the pricing strategy in a market without any strategic input risk the product landing on the shelf at an unsustainable price position. Having the knowledge of what a fair deal is for all parties along the chain, allows a compromise to be reached.
It’s not about being the cheapest in the market but commercial viability is important for every party in the supply chain. Importers and retailers need to make a margin to cover their costs and provide a profit.
There are many strategies that brands can use to provide marketing support to their distributors, from financial support tied to a percentage of sales, to volume rebates and trade tasting support, and the provision of attractive marketing collateral that distribution partners can use to talk to customers in the trade.
Need support?
We will help you quickly determine the right markets and entry model for your products, understand the local regulations and develop the perfect pitch to take your product to market. Then, we will partner you with the right distribution partner and get sales moving.
You’ll benefit from our commercial experience and insights gained over 12 years of successful food and beverage product launches across Asia.
Email us at getincite@exportincite.com