Asian Functional Health: Creating Value through Food Innovation

Asian Functional Health: Creating Value through Food Innovation


In an era where health and wellness are paramount, food companies are discovering that the concept of health varies significantly across different Asian markets. This diversity presents a wealth of opportunities for businesses to cater to the unique health needs and preferences of consumers in each region.

In Thailand, mental wellbeing and emotional health take center stage in the definition of health. Thai consumers prioritize balance, harmony, and emotional wellness, making mental and emotional wellbeing top health concerns. Additionally, getting enough sleep is recognized as vital for overall health, acknowledging the importance of rest for physical and mental well-being.

In stark contrast, South Koreans view health through a lens focused on the absence of disease, prevention, and a robust immune system. The emphasis on preventive medicine and healthcare practices has led to a different set of priorities in South Korea.

This diversity in health priorities offers food companies a spectrum of opportunities:

1. Customized Functional Ingredients: Food companies can develop and integrate functional ingredients tailored to the specific health concerns of each market. For instance, products aimed at promoting mental and emotional well-being may find a receptive audience in Thailand, while immune-boosting components could be favored in South Korea.

2. Cultural Sensitivity: Sensitivity to local traditions and dietary habits is paramount. Food companies must respect cultural nuances to build trust and acceptance among consumers.

3. Education and Marketing: Effective communication is essential. Food companies can educate consumers about the health benefits of their products within the context of each market’s unique health priorities.

4. Product Innovation: Ongoing innovation and adaptation are vital. Staying responsive to changing consumer preferences and emerging health trends is key.

5. Regulatory Compliance: Companies must ensure their products meet local regulatory and safety standards. Adherence to health claims and labeling regulations is critical.

6. Sustainability and Ethics: Environmental and ethical considerations increasingly influence consumer choices. Companies aligning their products with sustainability and ethics may gain a competitive edge.

7. Market Research: Thorough market research is indispensable. Understanding local health trends, dietary patterns, and consumer behaviors informs product development and marketing strategies.

8. Collaboration: Collaborating with local experts, health professionals, and influencers provides valuable insights and enhances credibility.

The diverse health priorities in Asian markets create a dynamic landscape for food companies to explore and innovate. By tailoring products and strategies to align with the specific health and wellness needs of each market, companies can tap into new opportunities, better serve their customers, and promote overall well-being. This adaptability not only benefits businesses but also enriches the health and lifestyle choices available to consumers across the region.

Immune support: Pre/probiotics move beyond gut health

Immune support food and beverages, which totalled USD16.8 billion in Asia Pacific in 2022, is the largest type of health benefit. Yet, its penetration into categories has room for improvement – the highest across all packaged food in the region in 2022 came from baby food.

12% of Asia Pacific’s baby food market is positioned for immune health support

Source: Euromonitor International Health and Wellness

Dairy categories like yoghurt and sour milk products, powder milk and flavoured milk drinks are among the top 10 categories with sizable immunity boosting claims. This is partly due to strong nutritional reputations, but also due to the rise of probiotics during the pandemic as an ingredient beneficial to gut health and immunity. In fact, the market size of yoghurt positioned for digestive/gut health in Asia Pacific (USD560 million) is greater than that for immune support (USD515 million) in 2022, highlighting the ubiquity of probiotics as an ingredient in the region.

Mental balance and sleep: Tea flavours and dark cacao

Tea has traditionally been perceived as a beverage that can aid in relaxation and sleep due to ingredients such as chamomile, ashwagandha and ginger. Flavours inspired by tea have thus been borrowed for packaged food innovation for mood enhancing positioning. Indonesia’s Greenfields, for instance, launched a series of flavoured milk drink SKUs in June 2023 with flavours like Vanilla Chamomile Milk (“No more stressful days!”) and Honey Earl Grey Milk Tea (“Extra mood booster is coming!”) as part of its flavoured milk tea portfolio. Besides tea, dark cacao, known to promote feel-good emotions, has also been a focus. Guylian announced in July 2023 that it was cutting out some SKUs in Asia Pacific, focusing on dark chocolate variants.

China is expected to experience the strongest increase in Asia Pacific in the retail value share of  plain dark chocolate tablets (chocolate confectionery) between 2019 and 2023 – a gain of 3.5 percentage points equal to USD23 million, according to Euromonitor International Snacks.

Overall, however, there is a lack of functional ingredients being utilised to provide consumers with mental and emotional wellbeing benefits, opening up an area of opportunity. Initial progress has been made by Ezaki Glico, which improved on its existing Mental Balance Chocolate in 2019 with an “aids sleep” positioning through the use of GABA (Gamma-Aminobutyric Acid). In 2022, it added a new SKU – a bitter chocolate flavour.

Identify growth markets and channels

In order to make an impact, producers should look into the growth potential of nascent health benefits such as mental balance and mood enhancement in markets like China and Japan, where a majority of survey respondents claim that mental wellbeing defines health. Products that address physical health and wellbeing (such as energy and endurance) may have stronger demand in markets like Indonesia, while the use of ingredients that overlap with other health benefits adds to the multifunctionality of the product, such as skin health, etc.

The application and development of well-known functional ingredients also has room for improvement. For example, pre- and probiotics hold massive potential, while there is intense research and development ongoing for synbiotics and postbiotics. Besides dairy products, confectionery and baked goods are expected to have optimistic growth in future as a vehicle for probiotics fortification.

Probiotics-fortified baked goods in Asia Pacific are expected to grow by a 9% CAGR between 2022 and 2027 (in retail value terms), outpacing yoghurt and sour milk products at 5%

Source: Euromonitor International Health and Wellness

Lastly, increasing the number of opportunities for consumers to gain understanding of specific positioning and ingredients is essential. Not only is extensive retail presence important, but so is collaboration with retail partners to communicate the value of such products.

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