Beverages Deep Dive: Low Sugar, Wellness Drinks, and Untapped Opportunities in Asian Markets
Consumer and Retail Trends in ASEAN's Drinks Categories
The low and no sugar category is growing in mature ASEAN and North Asian markets, including Singapore and Hong Kong.
The Singapore Government recently introduced some very strong regulations on packaging claims and the need to declare the amount of sugar in pre-packaged grocery drink products to combat rising health issues, such as diabetes. Brands with high sugar content will be more heavily regulated and encounter restrictions with advertising and marketing. The region is starting to wake up to the perils of high sugar content in beverages, which is putting pressure on manufacturers.
In terms of positive trends, demand for healthy and functional drinks is on the rise. Drinks containing protein and pre and probiotics are gaining attention as part of the overall trend towards wellness.
The alcohol industry is mostly traditional across Southeast and North Asian markets. Typically, it's still the big multinational brands that are dominating. Independent gin, rum and whiskey companies are making some gains, however, volume can be challenging as the multinationals generally compete for deals with larger on-premise groups to cover all their requirements for spirits, wine and beer.
The palate for good quality coffee is improving as coffee remains an underdeveloped category in grocery across the region. Quality products with unique packaging, affordable pricing and longer shelf life do well across the ASEAN region and there is still plenty of opportunity for imported brands. Tea is a mature category in Asia, however, there has generally been little innovation in the category presenting an opportunity to those who can bring something new to the market.
the Beverage Landscape
Whilst we have seen the growth of low and no-alcohol products skyrocket in Western markets, the developing trend is lagging in ASEAN markets. There have been gains and we expect these categories to become more popular in the coming years.
Different varieties of plant milk (other than soy and rice based) have become more popular in recent times through the incorporation of marketing messages of sustainability and environmental impact.
As previously mentioned, health and wellness trends have had an impact on the beverage category. For example, Singaporean consumers are increasingly health-conscious and are seeking alternative beverage products that are "better for you" and have less sugar and more functionality. Like many other countries, consumers in Singapore are becoming more aware of the significance of protein intake in their lives, as their work hours become longer, their lives become more active, and they also understand the importance of regular exercise in a balanced lifestyle.
Innovation
We are seeing international suppliers use the following strategies to better appeal to consumers in ASEAN markets:
1. Using localised digital marketing strategies that resonate with local consumers, including the use of local language, local key opinion leaders, and recipes and competitions that appeal to local consumers.
2. Introducing smaller pack formats that enable the brand to hit a more competitive price point and align with local consumer consumption habits.
3. Product reformulation and the introduction of new SKUs to better cater to local taste preferences.
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