The Future of Functional Food and Beverages in Asia Pacific

September 2023

In Asia Pacific, consumer need states in food and beverages cut across physical, mental and emotional wellbeing. Food and beverage companies can unlock opportunities in addressing consumers’ health goals by utilising functional ingredients and positionings that address consumer need states. The report highlights various innovations in Asia Pacific, reflecting the competitive landscape of functional food and beverages.

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Key findings

Consumers in Asia prioritise mental wellbeing, sleep and immunity in their health

Understanding consumers’ desired physical, mental and emotional wellbeing goals helps food and beverage companies select suitable ingredients and positioning. In Asia Pacific, three health concerns to prioritise are mental wellbeing, getting enough sleep and having a healthy immune system, although priorities tend to vary across the different markets.

Physical need states are focused primarily on immune support and energy boosting

Food and beverage products with physical need states in Asia Pacific are predominantly positioned for immune support and energy boosting. This is largely because functional ingredients tend to overlap with immune system health, in addition to specific benefits, while ingredients like caffeine have both flavouring and energy-boosting benefits.

Mental and emotional need states offer new opportunities for functional ingredients

Awareness of mental and emotional wellbeing, such as stress relief and sleep, has gained traction as consumers become more self-discerning and adjust their diets for benefits beyond physical health. Ingredients like GABA (gamma-aminobutyric acid), camomile and ginger incorporated into food and beverages address mood management and achieve mental balance.

New health positioning opportunities await through meeting consumer need states

Adopting an end-goal approach in catering to consumer need states may unlock new health positioning opportunities. This includes exploring growth segments within nascent need states, and understanding potential consumer profiles. Nevertheless, it is also necessary to understand existing preferences in mature functional food and beverages markets, such as Japan.

Scope
Key findings
Identify key need states that lead to functional health and wellbeing opportunities
Achievement of health goals varies by market, due to different definitions
A broad view of how current need states are addressed through food and beverages in Asia
Need to match functional ingredients with consumers’ health goals
Physical need states are primarily focused on immune support and energy boosting
Immunity: Well-established immune support health claims present in both food and drinks
Bottled water is the leading category for immune support health claims
Case study: C-vitt 0% sugar widens product portfolio beyond immune boosting ingredients
Pre/probiotics are focal to immune support but also applies to multiple need states
Case study: I’m Alive Kombucha jellies extend fermentation into confectionery
Energy: Beverages with energy claims continue to appeal to consumers in Asia Pacific
Case study: Red Bull Energy Soda launched to appeal to young consumers
Case study: Vitaday functional vitamin energy water serves to recharge consumers
Protein is a key ingredient in energy restoration and refuel
Case study: Heal Nutrition continues its expansion into food with breakfast protein bars
Case study: Amul’s protein series launch for buttermilk and lassi positioned for energy
Hydration: More brands enter as consumers regard hydration as a top health priority
Case study: Indonesian sports drinks brand Isoplus launches coconut water variant
Case study: Danone launches an electrolyte drink in China
Case study: Kirin Plasma appeals to consumers with new functional ingredient LC-Plasma
Memory: A need to expand functional products beyond the senior age group
Rising concerns of memory issues call for a need to penetrate more categories and formats
Case study: Memberry milk positions itself as healthy and flavourful
Emotional and mental need states span across cognition/focus to mood modulation
Relaxation and sleep: A shift from less-preferred ingredients towards functional indulgence
Tea is traditionally known for its strong health claims in relaxation
Case study: Greenfields Extra targets younger consumers with feel-good vibes
GABA has a growing reputation for mood/sleep enhancement
Case study: Mengniu continues to broaden its range of sleep aid dairy products with NOPA
Focus and clarity: Great opportunities for beverage functionality
Case study: Sappe Keaf CBD water seeks to enhance brain focus and concentration
Case study: Shine+ nootropic energy drink appeals to enhance mental performance
Immune support, energy boosting products set to lead health claims
Pricing remains a key challenge for food and beverage products with health claims
Learning from the Japanese market: Ease consumers’ selection challenges
Case study: Leading convenience store chain in Japan sells snacks with chrono-nutrition
Case study: Yoghurt giant Yakult gains further with its new brand offering triple functionality
Recommended actions to leverage the need states framework in Asia Pacific

Health and Wellness

Health and Wellness encompasses a number of key claims made on a food or drink products that suggest a health and/or wellness positioning. It comprises positionings relating to better for you, dietary and free from, fortified/functional, health benefit, natural and organic. Please note that data is not available at this level or other aggregated claim levels.

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