GlobalData has just released its Beverages Tracker for 2nd quarter 2020 for Southeast Asian countries. COVID-19 will certainly affect consumer buying pattern in terms of their choice of products, and GlobalData has identified several trends which will emerge in the Southeast Asian beverage space in 2020:
Functional beverages – As consumers become more conscious of the their health/wellness, there is an increased preference for beverages that offer functional benefits. In Indonesia, Otsuka Group launched Oronamin C carbonated drink, which claims to fulfil the daily requirement of vitamins C, B2, B3, and B6. The product is free from preservatives, artificial colors, flavors, and sweeteners.
Similarly, new to consumers in Thailand is a Woody brand ‘Health Beverage’ in a C+Lock (Carabao Group) variety featuring a cap designed to help prevent the decomposition of vitamin C. Presented in a green glass bottle so that the vitamin C does “not decay from being exposed to sunlight”, this “good for health” drink contains nitrogen to help maintain the freshness. The drink also claims to be suitable for all ages to boost the immune system and claim to be able to counter respiratory diseases; particularly relevant under the current COVID-19 pandemic.
Weight management – Rising obesity levels are an increasing concern across the region. Asian governments are pushing for producers to aid consumers in reducing sugar consumption. For example, the Singapore government’s recent measures to promote healthier lifestyles included the introduction of Nutri-Grade; a new grading system for pre-packaged beverages to be implemented by the end of 2021. The Nutri-Grade system aims to increase consumer awareness of the ingredients of the sweetened beverages.
Traditional and plant based ingredients – A focus on traditional beverages and ingredients leverages heritage and provenance, and offers healthier and lower cost beverage alternatives, especially for the lower-middle income consumer segment in Southeast Asian countries. There are also strong opportunities for premiumisation – and export to Western countries where there is a growing interest in products containing ‘herbal remedy’ claims. Heightened interest in traditional drinks is predicted to drive sales in plant/oriental-based beverages – if the price is right – in Southeast Asia.
Herbal drink Wedang Uwuh (Konimex) has recently been launched in Indonesia. Wedang Uwuh is a traditional-based drink containing spices and claims to warm the body and relieve cold symptoms. This targets consumers who prefer to try such traditional remedies rather than opt for western medicines. According to GlobalData’s 2019 Q4 global consumer survey, 47% of consumers in Indonesia are encouraged to buy food and drinks that contain natural ingredients – much higher than the global average of 35% – suggesting a potential audience for this product – especially given the evolving COVID-19 situation.
Affordable Single-Serve Packs – The implementation of the sugar tax and consequent rise in price for soft drinks pushed some of the price-conscious consumers out of the market in the Philippines. Many manufacturers subsequently launched affordable single-serve packs in the juice, fruit powders, and carbonates categories. For example, in 2019, Zest-O launched Juicy Lemon, Fruit Soda, and RC Cola in 24cl PET bottles in the Philippines.
Sustainable packaging to address environmental concerns
Sustainable innovative packaging solutions are receiving more attention from manufacturers as well as from consumers. Danone Group’s Aqua brand launched the first 100% rPET (recycled polyethylene terephthalate) bottles in Indonesia. This sustainable move is paving the way for other players to focus on recyclable materials. Similarly, despite the downtrend in carbonates, Coca-Cola Indonesia established a production plant to produce affordable small package bottles to reduce its plastic footprint. Bottles made in this plant are in line with the rising sustainable packaging trend in Indonesia.
With some of these innovations, companies are seeking to move towards solving the real life environmental and health concerns which consumers are facing in Southeast Asia. Companies must connect, not only with empathy, but also show meaningful action. Building trust and a relationship with consumers during the crisis period should translate into loyalty down the road in a post COVID period.
(To buy GlobalData Beverages Tracker 2nd quarter for various countries in ASEAN, please go to Syndicated Report section)
