ASEAN Nations Present Excellent Market Prospects for the Food and Packaging Industries

Nutrition in Asia means not only food, but also everything from food processing and the equipment used in the packaging industry. The food market, the consumption as well as the packaging sizes have a greater meaning when it comes to “generating good business.” DR. KLIPPE CONSULT gives the background from many years of experience in the ASEAN Nation - how they were able to take advantage of a decisive market advantage for themselves.

1. Historie ASEAN

ASEAN was established in 1967 by Thailand, Indonesia, Malaysia, the Philippines, and Singapore. The goal was to further economic improvement, social progress, and political stability. Successes of the economic open-door policy were evident right away and today, to some extent, the member states rank among the so-called Asian tigers and Asian panthers [Wikipedia].

Today the ASEAN consists of ten member states with about 575 million inhabitants (about eight percent of the world population). In 2007, the gross domestic product (GDP) was around 1200 billion USD. The average growth rate of the GDP is four percent per year (2003).

Under the name “ASEAN Economic Community” there is a series of summarized agreements and initiatives put into place in order to promote strong economic initiatives and the breaking down of trade barriers between member states and to promote a prosperous economic region.

The growth rates in the ten ASEAN nations are all in a clearly positive position and are reminiscent of the growth rates of the EU accession countries of eastern and central Europe. Even though there is prosperity in part, this prosperity is even still far unequal in the ASEAN context as compared to the European Union as a result of the lack of a system of financial compensation between rich and poor countries.

There is a large variety of religions. Thailand, Myanmar, Vietnam, Cambodia, and Laos are predominantly Buddhist, while Vietnam has a large proportion of atheists. Indonesia, Brunei, and Malaysia are predominantly Muslim. Indonesia is the country with the largest Muslim population worldwide. The Philippines are predominantly Roman-Catholic.

2. Trends – Eating Habits in the ASEAN Countries

The different religions influence eating habits on a large scale and therefore consumer behavior when it comes to the food industry.

The 10 countries in the ASEAN with 575 million consumers represent great potential for the European packaging industry. The need for quantity and the quality of food is constantly rising. Staple products for everyday needs like rice, fish, meat, etc. will, due to the varied income of the population, be purchased in considerable amounts at traditional market places.

As opposed to European the eating habits of three meals per day in large portions, ASEAN nations eat between 6-7 times per day. In parallel, over the last decade well known supermarket chains in the US and Europe have been established in the ASEAN countries. These meet the rising needs and demands of the population for international high quality products and the corresponding packaging costs thereof.

3. How Does the Food Market Represent Itself in the ASEAN Countries?

In general, it should be noted, that the individual countries of the ASEAN have various import and export needs due to a large population, in particular. Furthermore, there are multinational affiliated groups like, for instance, Nestlé, Unilever, and Cargill that have been in Asia for decades in order to cover market needs with their range of products.

Sometimes production takes place in other Asian countries and production locations. Because of constantly rising needs it is not expected that there will be a negative trend in this market – in fact, quite the contrary!

Every year there is extensive investment taking place in packaging industry capital goods and the processing technology sectors. The constantly rising commodity prices like those of sugar or cacao have impacted the time of investment only slightly.

In the ASEAN states the demand for food and beverage industry machinery is enormous and the local engineering industry will, in the end, be able to face the challenges of the international standard and need. Machinery from the ASEAN states is sometimes purchased at only a fraction so that the market price of the products is maintained.

Because of this reason, packaging machinery manufacturers have been exporting successfully for many years. In addition, many midsized companies from the food processing sectors in Europe are increasingly exporting in the ASEAN states in order to meet the constantly increasing need.

One must notice furthermore, that there has been an immense transition in way goods are presented. In many Asian supermarket chains one can find more and more packaged products on the shelves and with this comes criticism from customers.

At the same time as requirements change for the packaging industry like consumer habits which means updated packaging needs to be produced. Small package sizes are particularly popular with the population. On the whole, this is the same as in Europe- a feast for the eyes, but the package has to be practical too.

4. Market Entry into the ASEAN States – Things to Consider

For these reasons, in order to enter the ASEAN market detailed market research should be prepared for relevant products that are to be put into the market.

Promotional material at one of the numerous trade fairs in Asia with an information stand under the care of an Asian partner expert is also a constructive measure to be able to better assess the markets, the culture, and purchasing trends. However, these aspects should already be clarified in relation to the exhibition “all those customer contacts should be pursued.” Secure your local partners first to guarantee sustainability.

An old Chinese proverb says:

„It is easy to open a business; it is hard to keep it open.“

7. Conclusion –“ASEAN Food and Packaging Market”

ASEAN is a region with nearly 600 million consumers, a constantly growing market for food and therefore the food processing and packaging industries. Modern supermarkets and malls provide a starting point for massive consumption. The entry into these Asian markets is achieved through endurance. A local partner will ensure stability and presence at trade fairs promotes confidence building.

© DR. KLIPPE Consult 2010