Concentrate-d cuppa: Nestle banks on convenience trend in Vietnam to launch new Nescafe products
Nestle Vietnam banked on the rising demand for convenient beverage options in the country to drive the growth of its Nescafe ready-to-serve liquid concentrate.
Thank you for reading this post, don't forget to subscribe!According to the firm, Nescafe’s core strength lies in its instant powdered coffee business which continues to remain its keystone coffee range throughout Asia, but it has also stepped up its new format and product innovation to keep up with the latest trends and consumer demands.
“Vietnam in particular is a country with a very rich coffee culture, and there have also been some novel popular trends emerging over the past few years,” Nestle Vietnam Business Executive Officer Mostafa Youssef told FoodNavigator-Asia.
“Cold coffee tends to be more popular here, and interestingly there has also been a movement towards liquid coffees – which is why we have recently launched a new innovation in the form of a coffee concentrate in a stick.
‘Best year ever’: Mondelez sees cocoa inflation, political tensions as ongoing major challenges despite record profits
Confectionary giant Mondelez highlighted earlier in the year that inflation affecting cocoa and sugar, as well as ongoing political tensions in the Middle East were major challenges it needed to overcome in 2024 despite having announced ‘record’ profits for 2023.
Mondelez International reported 14.7% year-on-year net revenue growth to US$36.1bn and 18.8% year-on-year gross profit growth to US$13.3bn for the overall firm during its FY2023 full-year financial results.
It also reported 11.7% yoy revenue growth to US$7.1bn for the Asia, Middle East and Africa (AMEA) region in particular – Mondelez classifies AMEA under its Emerging Markets portfolio, and a deep dive into the numbers for this region showed growth was primarily driven by price hikes.
“We can see that the strength of our brands in Emerging Markets continues, so we do feel good [about this region] as we enter 2024,” Mondelez CEO Dirk Van de Put told the floor at the company’s most recent financial results conference.
“[That said], there have been some tensions in the Middle East which has had some effect on Western brands which we of course carry a good number of.”
Forever young? PepsiCo China on how localisation and indulgence appeals to younger snack consumers
PepsiCo China revealed its snacking strategies based on localisation and indulgence that have successfully captured and retained the interest of younger local consumers in the market.
It is well-known that China is a unique market in the Asia Pacific region that requires specific localisation efforts to appeal to consumers here, largely due to the huge size and diversity of the population.
But not all localisation is made equal, as beverage and snacking giant PepsiCo discovered in the Chinese market where it needed to rely on very different types of localisation strategies for its various products.
“One of our major brand Quaker has been around for over 100 years and has a very mature supply chain, but in China consumers are simply not familiar with oats as a daily diet staple,” PepsiCo Greater China Foods CMO Nina Mu told the floor at the Food and Beverage Innovation Forum (FBIF) 2024 event in Shanghai, China in June.
“We needed to find a way to make oats more acceptable to local consumers and realised we had to tackle it from first a mouthfeel angle, i.e. making the oats softer in comparison to regular oats to meet the local palate.”
Consolidation concerns: Australian dairy sector highlights worries over Fonterra sale of local business
The dairy sector in Australia has highlighted concerns of ‘yet another blow’ to the industry as a result of Fonterra’s strategy change announcement earlier this year that included plans to divest its consumer brands.
Fonterra recently announced that it would be making a major change to its business strategy by both divesting its well-known consumer brands such as Anlene, Anchor and Fernleaf on a global level to concentrate fully on its B2B and ingredients business despite having seen the consumer sector deliver a stellar financial performance in the past year.
The local dairy sector has voiced concerns over the sale as it indicates a shift towards a concentration of the market.
““The announcement by Fonterra that it intends to sell its Australian dairy processing assets is yet another blow to dairy farmers and a reminder about the precarious nature of our food security when staples like milk are passed around like commodities,” Australia’s Business Council of Co-operatives and Mutuals (BCCM) told FoodNavigator-Asia on behalf of local dairy producers.
Beverage barriers: Yeo’s predicts challenging year ahead after mixed 2023 financial results
Singapore-based beverage heavyweight Yeo Hiap Seng (Yeo’s) predicted a challenging 2024 after reporting a near doubling in profits but a significant overall drop in revenue, citing ongoing inflation and soft consumer spending as key factors.
Yeo’s reported a -7.1% decrease in total revenue to S$332.7mn (US$247.7mn) in FY2024 from S$358.1mn (US$266.6mn) in FY2022, but a 179.2% increase in net profits to S$6.7mn (US$4.99mn) from S$2.4mn (US$1.79mn) the year before.
“The decrease in revenue for FY2023 was mainly due to the movements in foreign exchange rates, which more than offset sales growth in markets such as Malaysia and Indonesia,” Yeo’s stated in a formal document.
“In addition to the movements of foreign exchange rates, subdued consumer sentiments worldwide are also having an effect, particularly in Cambodia and in China.”
Sales in Yeo’s other key markets all showed negative results including in home base Singapore which was down -3.3% year-on-year in revenue due to poorer Chinese New Year festive sales.
“All in all our outlook for the market based on these results is that operating cost inflation and softening in consumer spending amidst economic uncertainties will continue to pose headwinds to operations,” the company added.
APAC adjustments: Coca-Cola Europacific bets on Philippines acquisition and Indonesia realignment to boost growth
Coca-Cola Europacific Partners (CCEP) have bet on its Philippines acquisition and portfolio realignment in Indonesia to stand it in good stead to capitalise on future growth in Asia Pacific.
“We have progressed our long-term transformation strategy in Indonesia and also completed the acquisition of Coca-Cola Beverages Philippines together with Abolitz Equity Ventures (AEV) – henceforth, this will have a 60:40 ownership structure with 60% to CCEP and 40% to AEV,” CCEP CEO Damian Gammell said.
“We are well placed for FY24 and beyond [being] stronger and better, more diverse and robust, and our categories remain resilient despite ongoing macroeconomic and geopolitical volatility.
“We continue to actively manage our pricing and promotional spend to remain relevant to our consumers, balancing affordability and premiumisation [and] have the platform and momentum, now including the Philippines, to go even further.”
Beverage elevation: Kirin, Yili, Yeo’s and more APAC leaders weigh in on functionality, convenience as key drivers
Major brands from Kirin to Yili have highlighted an increasing need for the APAC beverage sector to innovate with added functional and convenience benefits for consumers, especially in a time when the industry is seen as increasingly costly.
It is no secret that the prices of many FMCG products were revised upwards in 2024, given the increased inflationary costs coming as an economic aftermath of the pandemic as well as global geopolitical instabilities having had major impacts on commodities from wheat to sugar.
This affected many if not most food product prices as these are of course reliant on food ingredient costs – beverages were been severely affected by these, with even large multinational brands such as Kirin having had to implement multiple rounds of price hikes in the past year or so.
“Many companies [including Kirin] have had to revise prices in stages to cope with the rising costs of raw materials,” Kirin Corporate Communications Manager Yuka Itoh told FoodNavigator-Asia.
“In general, the external environment surrounding the market for soft drinks [and other non-alcoholic beverages] continues to be challenging, as costs for raw materials, energy, and logistics continue to rise, and we believe it is a significant challenge to address these issues throughout the supply chain.”
Faced with the need to raise prices, many beverage companies are attempting to tap on the simultaneous rise in consumer demands for wellness-enhancement, convenience and experiential novelty, which has in turn led to the rise of beverages containing a variety of added functional benefits from either a heath or format angle.
Polarised patterns: Fonterra, Yili and more big APAC dairy firms on how wellness and enjoyment trends are driving industry
The twin trends of health and wellness alongside indulgence and enjoyment have been driving APAC dairy industry growth and opening up a raft of new innovation opportunities, according to industry leaders including Fonterra, Yili, Parag and more.
The popularity of dairy in APAC has not traditionally been uniform, with markets such as Australia, New Zealand and India dominating production and demand. But in recent years more Asian markets including China and Vietnam have gained in interest in this sector.
One of the key drivers is wellness and nutrition, particularly in China where the government and industry associations established consumer guidelines for daily dairy consumption in 2020 amid the COVID-19 pandemic.
“New Zealand is of course a long-time dairy consumption market, whereas China is a newer one, and we have definitely seen how consumer preferences in both of these markets differ quite substantially,” Yili Innovation Centre Oceania Head Philip Wescombe told FoodNavigator-Asia.
“In New Zealand, consumers are very conservative in their dairy preferences and place very strong emphasis on the quality and the traditional dairy experience – they view dairy sort of like they view wines, and have a connoisseur-like approach to it.
“In China though, consumers are all about seeking out new experiences when it comes to dairy – this means that we have a lot more scope to play in and more opportunity to combine different ingredients.
Cycling up collaboration: Nestle and KosmodeHealth looking at product innovation to boost valorisation partnership
Nestle Singapore and upcycling specialist firm KosmodeHealth have been looking at new product innovations with valorised ingredients in an effort to move forward with their award-winning upcycling collaboration.
When we first spoke to KosmodeHealth in 2021, the firm had just embarked on its milestone collaboration with firms such as Nestle to collect spent barley grains on a small scale, transforming these into its zero-GI, high-protein W0W Noodles.
This collaboration has taken home the SICC Most Transformational Award 2023 from the Singapore International Chamber of Commerce (SICC), awarded to local collaborations that have resulted in the ‘biggest gains in the areas of increased capacity, value creation, productivity improvements, revenue growth and/or return on investment’.
KosmodeHealth Co-Founder and CEO Florence Leong told us earlier this year that the team was preparing to embark on an even more collaborative partnership with Nestle.
“Nestle is the largest producing of Spent Barley Grains (SBG) after their malt production [in Singapore] providing KosmodeHealth with this SBG [which we] then extract protein and fibre from to make into valorised barley protein fibre products,” she told FoodNavigator-Asia.
OATSIDE’s rapid growth in Asia fuelled by ‘comprehensive marketing strategy’ and targeted flavour innovation
OATSIDE has attributed its meteoric rise in Asia to a marketing strategy encompassing targeted campaigns and strategic partnerships, and constant innovation of flavours to satisfy myriad consumer preferences.
Founded by CEO Benedict Lim during the pandemic, the oat milk brand has steadily grown across the Asia-Pacific region, and is now sold in 18 countries, including China, Indonesia, Malaysia, Japan, South Korea, Thailand, and the Philippines.
“Our rapid growth in Asia is fuelled by a comprehensive marketing strategy. This includes targeted campaigns, strategic partnerships with like-minded brands such as fashion retailers UNIQLO and Good Addition, and collaborations with Singapore Airlines. At the heart of this strategy lies our commitment to creating memorable and engaging experiences that resonate with consumers around the world.
“We’ve cultivated a vibrant community where we work with content creators who share our passion for healthy lifestyle without compromising on great taste. A prime example is our partnership with South Korean actress Go Min-si, who serves as our brand ambassador in the country. Her natural charm and dedication to a healthy lifestyle perfectly embody the OATSIDE brand,” Cindy Lin, Marketing Director of OATSIDE, told FoodNavigator-Asia.
