[Opinion] Southeast Asia will Become a Global Dietary Supple
A new study reports that with the increase of the middle class, Southeast Asian dietary supplements, functional foods and high-value nutritional products have great potential for development, and the report refers to the industry in which these products are located as “sunrise industry”. The report was written by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and focused on the 10 member countries of the Association of Southeast Asian Nations (ASEAN), Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
According to the research report, ASEAN had the third largest population in the world in 2016 and is expected to become the fourth largest economy in the world by 2030, with economic growth exceeding the global average.
The largest demand for high-value nutritional products in the ASEAN region may come from the rapidly expanding middle class market. It is estimated that by 2020, the number of middle class in Indonesia will rank eighth in the world and fourth in the world by 2030. The number of middle class in the Philippines, Vietnam and Thailand is expected to increase significantly by 2030. At the same time, countries such as Singapore and Vietnam are facing the medical burden of an aging population and growing chronic diseases.
Despite strong demand, the production of high-value nutritional products is still in its infancy within ASEAN, but there are some potential production centers in the region. Thailand is a leader in organic agriculture and its organic food sales were growing at a rate of 7% per year in 2010-2014. As to high-tech functional foods, the Singapore Clinical Nutrition Research Center, established in 2014, is expected to make Singapore a centre for research and commercialization of nutrition in the region. Considering the high market demand in the region, ASEAN in the field of high-value nutritional products has plenty of room to work with mature research institutions, such as CSIRO’s Food Innovation Center, which can help manufacturers develop high-value foods. Increased health awareness, rising incidence of chronic diseases, and food safety scandals have also created more market opportunities for high-value nutritional companies in the Asia Pacific region (APAC).
In China, the world’s largest population, about 80% of deaths are caused by chronic diseases, and about 50% in Thailand. Nearly half of the world’s diabetes patients live in China or India, and it is expected that cases of type 2 diabetes will increase by more than 150% between 2000 and 2035. At the same time, APAC consumers are increasingly aware of their health. According to the report, 93% of APAC consumers are willing to spend more on health foods, and consumers are willing to pay for food safety. It’s found that Chinese dairy products with quality management certification can be sold at a price of about 5% higher than ordinary dairy products. At the same time, the growing demand for organic foods in the ASEAN region has prompted ASEAN governments such as Thailand and the Philippines to implement organic labeling or implement organic farming policies. The research report pointed out that the recently established ASEAN organic agriculture standard is expected to accelerate the development of ASEAN organic agriculture. In the search for more organic food options, Asia Pacific has the highest proportion of consumers in the world, reaching 51%, compared with 44% globally. When making purchasing decisions, these consumers are more likely to list “materials that are procured fairly or sustainably” as an important factor. According to the report on the demand for aged products, the market share of global health and health products sales in the Asia-Pacific region is expected to increase from 20% in 2002 to 31% in 2018. In particular, the Asia-Pacific nutraceutical market is expected to grow at a compound annual growth rate of 7% between 2014 and 2019.
There is also an aging population problem in the Asia-Pacific region. In ASEAN alone, 6.6% were over 65 years old in 2016. It is expected that by 2020, this proportion will rise to 7.8%. The average life expectancy in the region has also increased from 63.5 years in 2007 to 72.8 years in 2015. The increase in life expectancy means that the demand for older products will continue to increase. The report pointed out that population aging is one of the main drivers of ASEAN’s disease burden from infectious diseases to non-communicable diseases. Between 1990 and 2010, the incidence of coronary artery disease in the Asia-Pacific region increased by 76%, the incidence of lung cancer increased by 86%, and diabetes increased by 76%.
These conditions and higher drug development costs have resulted in a 250% increase in health care spending between 1998 and 2010. However, due to the lack of hospital infrastructure in the Asia Pacific region, the demand for preventive solutions is increasing. Supplements designed to support cognitive health and joint health and promote anti-aging have been introduced in the region and remain the largest category of aging health products. In addition, personalized nutrition products are becoming more popular in the Asia Pacific region, with some companies providing DNA testing to older people and tailoring their nutrition programs. Australian food supplement companies have consistently performed well in Asia, especially in China. China’s aging population is helping to further boost Chinese manufacturers’ investment in Australia’s healthcare and supplements sector, with an investment of 1.58 billion Australian dollars last year.