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Predicting The Near Future
BY ELIZA LEUNG
What can we expect in the South-East Asian food-and-beverage industry, and beyond? Read more to fi nd out what our experts have to say.
1 November 2006
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Q: What trends do you see for 2007?
Today’s consumers are looking more and more products from natural and organic sources, since the negative-health impacts of chemical contaminations and residues have become clearer.
MR. SERMPONG TAPTIPAKORN THAI ORGANIC AGRI COMPANY OWNER
IT and Operations managers are now specifying that all devices must be mobile to increase employee productivity and reduce errors and the cost of re-fi ts. This means that printers must be operated either from the belt, the fork-lift, or the transportable cart. It also means that 802.11b/g wireless connectivity as a must for all devices, especially bar code label printers, in warehousing and manufacturing.
PAUL VOGT ZEBRA TECHNOLOGIES DIRECTOR OF GLOBAL RETAIL OPERATIONS
Customers are ready to spend their money for high-trend foods in the kid and teenager segments.
DWI SIAGA ALFA LAVAL INDONESIA MARKET UNIT MANAGER - PETROCHEMICALS & NATURAL RESOURCES
WalMart and other retailers will continue to expand RFID but it will not become a major compliance item yet due to limited retail-wide roll-out. However governments around the globe are trying to fi gure out how to provide greater integrity and security to our food sources; so expect an increase in track/ trace/recall legislation and requirements, which will also lead to an increase in technology to try and handle the exponential increase in information.
HENRI JUVANON INTERMEC MANAGING DIRECTOR, ASIA-PACIFIC
Tinghsin, a major local manufacturer of instant noodles, recently announced plans to open a chain of fast-food outlets. Chinabased convenience store, supermarket, and hypermarket franchises are springing up overnight in major cities to meet consumer needs for choice and convenience. Sales from franchised businesses of all types are currently estimated at less than three percent. Fueled by China’s continued urbanization, franchise sales are expected to grow to a reported 30 percent of total retail sales by 2010.
TOM MORENO SPI POLYOLS GENERAL MANAGER, ASIA AND EUROPE
The cost pressures on our customers from their buyers like the quick service restaurants and retailers continue to be immense. This drives the need to process and preserve the food cheaper and safer, with comprehensive data collection, less energy waste, and a minimization of product rejects. The need for line optimization and traceability will grow, given that Avian Flu is a continuous threat.
PER FRIBERG FMC FOODTECH ASIA-PACIFIC MARKETING MANAGER
Singapore food manufacturers have been quick to respond to market demands. A survey conducted by the Singapore Manufacturers’ Association in 2005 showed that 150 new products were developed a year by 170 of the association’s members. However, many food manufacturers indicated lack of know-how and funds as reasons for not going into new product development. To encourage more food companies to develop new products, SPRING Singapore will provide support to set up a Food Innovation and Resource Center at the Singapore Polytechnic next year. This center will offer a range of services such as technology consultancy and advice to help companies in product development, all the way from concept to market.
LEUNG WAI LING SPRING SINGAPORE DIRECTOR, FOOD DIVISION
Streamlining administrative processes right down to the plant fl oor itself will determine the future continued profi tability of many companies. Why is one factory scoring better than another? Measuring, displaying and using realtime information shows real benefi ts in continuous-improvement initiatives within the plants.
SCOTT DRUERY CITECT MANAGING DIRECTOR, SOUTH-EAST ASIA
There is real scope for personalized nutrition. Within our personal DNA there are predispositions for certain diseases. If we can adjust our dietary intake to regulate genes that are responsible for these health conditions, then this is the ultimate in personalized nutrition. Five years ago, nutrigenomics sounded like science fi ction, but it’s a reality today.
TOM BRUYNEL DSM NUTRITIONAL PRODUCTS AREA MANAGER
Using distributor data and third-party sales data for demand determination will evolve to enable demand-driven supply networks. Globalization is increasing so managing more complicated transport challenges for both import and export will be crucial. A one-percent improvement in customer service brings about signifi cant margin benefit.
PHIL DUFF ORACLE ASIA-PACIFIC INDUSTRY DIRECTOR FOR CONSUMER GOODS
The use of probiotics has to have both quantitative and qualitative effects on modulating the immune response (increased sensitivity, eczema, allergies). We have the task now to continue our research and to translate these research fi ndings and transform the needs of consumers into natural ingredients that food manufacturers can use in the production.
PETER OLESEN CHR HANSEN EXECUTIVE VICE PRESIDENT, GLOBAL RESEARCH AND DEVELOPMENT
One trend is to fi nd the most cost effective production to reduce the costs of the products. It is important to leverage technology to manage the cost of production. This is driving the utilization of the best technology and industry expertise in the design and implementation of projects at the beverage production plants. This has led to the increase in the domain expertise of Asia companies. Many of the new plants that are being built are utilizing engineering and equipment that are from the local countries.
CHARLEY RASTLE ROCKWELL AUTOMATION MARKETING LEADER, BEVERAGE INDUSTRY
In recent years, we have witnessed an increasing shift from rigid to fl exible packaging formats across the markets we serve. Further, the growing popularity of wholesale retail outlets around the world has led to a trend towards larger, multiserving packaging formats. Our research indicates that when buying a multi-portion package, consumers prefer the convenience of resealable fl exible—they are even willing to pay a higher price for it. In Asia, we are seeing growth in resealable packaging for powdered drink mixes. In the US, sliced meat and cheese remains a core market.
JIM KOHL ZIP PAK PRESIDENT
Expect to see even further developments in the fortifi cation of recipes with vitamins, antioxidants, nutraceuticals and other innovative ingredients. This trend will help overcome defi ciencies and enhance personalized health solutions. Combined with greater awareness of obesity, diabetes and other lifestyle diseases, the region will see an increased market demand for healthier product solutions, be it through fortifi cation or reduction of fat and carbohydrates.
JORGEN LUNDGAARD PALSGAARD REGIONAL DIRECTOR, ASIA-PACIFIC
Heart health, body composition, eye health and brain health will remain the building blocks of our strategy for growth. We anticipate above-average growth in all these areas, as the global wellness trend continues to gain momentum.
NORBERT WEITKEMPER COGNIS DIRECTOR OF STRATEGIC BUSINESS DEVELOPMENT, NUTRITION & HEALTH (N&H)
Flexible packaging continues to gain consumer acceptance and market penetration worldwide because the package format is cost-effective, environmentallyfriendly and products can be put into a package via a hot-fi ll, retort or aseptic process. Aseptically-prepared foods and beverages that are offered in resealable fl exible pouches or bags are easy to use and shelfstable, and take up less space in transit and in the warehouse—resulting in more product units per pallet.
GARY ALLANSON INTERNATIONAL DISPENSING CORPORATION PRESIDENT AND CEO
Heightening product safety concerns among consumers (e.g. baby foods and Infant formula milk), newer and healthier/more natural products in the markets (e.g. health drinks, flavored beverages, and healthy fl avored yoghurts) will continue to be the main issues. Food manufacturers will increase internal focus on traceability, operating performance and productivity to drive profi tability.
CHRIS SHELLEY APV VP GLOBAL BUSINESS DEVELOPMENT
0611pg13_01.jpgProduct wise, all Asian food manufacturers want to keep up with their neighbors. This herding effect signifi cantly increases product adoption, leading to overcapacity and the shortening of product life cycles. Under such circumstances, strong brands are essential if food manufacturers hope to maintain or grow market share. Claims made should be truthful, and a claim should be scientifi cally substantiated by taking into account the totality of the available scientifi c data, and by weighing the evidence.
IR. KOEN VAN PRAET ORAFTI REGIONAL MANAGER, ASIA
We expect several opportunities to explore and participate in consumerproduct reformulations as many of the key ingredient costs, such as sugar and energy, continue to increase or remain high. The right enzyme solutions can save energy, improve ingredient functionality, decrease the environmental impact of a manufacturer, and reduce the total processing costs of fi nished goods.
JOHN SLADE NOVOZYMES MANAGING DIRECTOR
With growing affluence and a more sedentary lifestyle, health issues such as obesity as well as heart-related diseases are increasingly becoming a regional and global issue. Hence ‘heart-healthy’ products and services are areas of great interest to all.
MR JAMES WONG NESTLE SINGAPORE COMMUNICATIONS & CORPORATE AFFAIRS MANAGER
There is a growing demand worldwide for the health benefits from fortifi ed products, particularly those with organic, natural or energy-boosting ingredients. This trend is refl ective of the consumer's desire to maintain and improve energy, reinvigorate and replenish body fl uids, manage weight gain and enhance the nutritional value of popular foods and beverages. A few of the high-demand ingredients being used are taurine, antioxidants and lycopene, which fulfi ll the desire of consumers for added energy and healthier options. Other ingredients poised for growth include fi bers, proteins, soy isofl avones, CoQ10, plant extracts and probiotics. The challenge for manufacturers is incorporating these ingredients and other nutrients into beverages, while avoiding the bad taste, sedimentation and other consequences that often result from ingredient interaction. DR RAM CHAUDHARI FORTITECH SR EXECUTIVE VICE PRESIDENT, CHIEF SCIENTIFIC OFFICER & CO-FOUNDER
Fresh fermented dairy products were worth $ 10 billion in Asia Pacifi c at retail level in 2005. In 2007, this market will be strongly supported by the double-digit growth in China. Freeze-dried cultures will continue to be the preferred format in Asian countries as they remain stable for 18 months at 4°C, eliminating the use of freezers and reducing storage volume. Freeze-dried probiotic cultures can bringing a healthy touch not only to fresh dairy products but also to powder applications, such as powder beverages or infant formulas.
SAADANE OAKS DANISCO CULTURES PRESIDENT
With obesity and diabetes on the rise throughout the region, we expect the demand for sugar-free, low or zero-calorie products to grow even more. We estimate the global confectionery category, for instance, to grow globally by three percent in the next few years, and this estimate can be doubled for Asia Pacific.
PAUL VRIJHOF, PRODUCT LINE MANAGER, CARGILL SWEETNESS SOLUTIONS-SINGAPORE CARGILL
As Singapore progresses to become a truly international and cosmopolitan city, Singaporeans are becoming increasingly adventurous and well-travelled, and have greater exposure to international media. As such, we are noticing that consumers are starting to make more discerning choices, especially when it comes to beer. Gone are the days of sticking to one beer brand. Consumers are starting to select different beers for various occasions. For example, one may choose to have an Erdinger for a chill-out drink after work; but will drink a Tiger during a bonding session with friends, and a Heineken when at a club.
MR. ALAN GOURDIE ASIA PACIFIC BREWERIES SINGAPORE GENERAL MANAGER
Today’s consumers are looking more and more products from natural and organic sources, since the negative-health impacts of chemical contaminations and residues have become clearer.
MR. SERMPONG TAPTIPAKORN THAI ORGANIC AGRI COMPANY OWNER
IT and Operations managers are now specifying that all devices must be mobile to increase employee productivity and reduce errors and the cost of re-fi ts. This means that printers must be operated either from the belt, the fork-lift, or the transportable cart. It also means that 802.11b/g wireless connectivity as a must for all devices, especially bar code label printers, in warehousing and manufacturing.
PAUL VOGT ZEBRA TECHNOLOGIES DIRECTOR OF GLOBAL RETAIL OPERATIONS
Customers are ready to spend their money for high-trend foods in the kid and teenager segments.
DWI SIAGA ALFA LAVAL INDONESIA MARKET UNIT MANAGER - PETROCHEMICALS & NATURAL RESOURCES
WalMart and other retailers will continue to expand RFID but it will not become a major compliance item yet due to limited retail-wide roll-out. However governments around the globe are trying to fi gure out how to provide greater integrity and security to our food sources; so expect an increase in track/ trace/recall legislation and requirements, which will also lead to an increase in technology to try and handle the exponential increase in information.
HENRI JUVANON INTERMEC MANAGING DIRECTOR, ASIA-PACIFIC
Tinghsin, a major local manufacturer of instant noodles, recently announced plans to open a chain of fast-food outlets. Chinabased convenience store, supermarket, and hypermarket franchises are springing up overnight in major cities to meet consumer needs for choice and convenience. Sales from franchised businesses of all types are currently estimated at less than three percent. Fueled by China’s continued urbanization, franchise sales are expected to grow to a reported 30 percent of total retail sales by 2010.
TOM MORENO SPI POLYOLS GENERAL MANAGER, ASIA AND EUROPE
The cost pressures on our customers from their buyers like the quick service restaurants and retailers continue to be immense. This drives the need to process and preserve the food cheaper and safer, with comprehensive data collection, less energy waste, and a minimization of product rejects. The need for line optimization and traceability will grow, given that Avian Flu is a continuous threat.
PER FRIBERG FMC FOODTECH ASIA-PACIFIC MARKETING MANAGER
Singapore food manufacturers have been quick to respond to market demands. A survey conducted by the Singapore Manufacturers’ Association in 2005 showed that 150 new products were developed a year by 170 of the association’s members. However, many food manufacturers indicated lack of know-how and funds as reasons for not going into new product development. To encourage more food companies to develop new products, SPRING Singapore will provide support to set up a Food Innovation and Resource Center at the Singapore Polytechnic next year. This center will offer a range of services such as technology consultancy and advice to help companies in product development, all the way from concept to market.
LEUNG WAI LING SPRING SINGAPORE DIRECTOR, FOOD DIVISION
Streamlining administrative processes right down to the plant fl oor itself will determine the future continued profi tability of many companies. Why is one factory scoring better than another? Measuring, displaying and using realtime information shows real benefi ts in continuous-improvement initiatives within the plants.
SCOTT DRUERY CITECT MANAGING DIRECTOR, SOUTH-EAST ASIA
There is real scope for personalized nutrition. Within our personal DNA there are predispositions for certain diseases. If we can adjust our dietary intake to regulate genes that are responsible for these health conditions, then this is the ultimate in personalized nutrition. Five years ago, nutrigenomics sounded like science fi ction, but it’s a reality today.
TOM BRUYNEL DSM NUTRITIONAL PRODUCTS AREA MANAGER
Using distributor data and third-party sales data for demand determination will evolve to enable demand-driven supply networks. Globalization is increasing so managing more complicated transport challenges for both import and export will be crucial. A one-percent improvement in customer service brings about signifi cant margin benefit.
PHIL DUFF ORACLE ASIA-PACIFIC INDUSTRY DIRECTOR FOR CONSUMER GOODS
The use of probiotics has to have both quantitative and qualitative effects on modulating the immune response (increased sensitivity, eczema, allergies). We have the task now to continue our research and to translate these research fi ndings and transform the needs of consumers into natural ingredients that food manufacturers can use in the production.
PETER OLESEN CHR HANSEN EXECUTIVE VICE PRESIDENT, GLOBAL RESEARCH AND DEVELOPMENT
One trend is to fi nd the most cost effective production to reduce the costs of the products. It is important to leverage technology to manage the cost of production. This is driving the utilization of the best technology and industry expertise in the design and implementation of projects at the beverage production plants. This has led to the increase in the domain expertise of Asia companies. Many of the new plants that are being built are utilizing engineering and equipment that are from the local countries.
CHARLEY RASTLE ROCKWELL AUTOMATION MARKETING LEADER, BEVERAGE INDUSTRY
In recent years, we have witnessed an increasing shift from rigid to fl exible packaging formats across the markets we serve. Further, the growing popularity of wholesale retail outlets around the world has led to a trend towards larger, multiserving packaging formats. Our research indicates that when buying a multi-portion package, consumers prefer the convenience of resealable fl exible—they are even willing to pay a higher price for it. In Asia, we are seeing growth in resealable packaging for powdered drink mixes. In the US, sliced meat and cheese remains a core market.
JIM KOHL ZIP PAK PRESIDENT
Expect to see even further developments in the fortifi cation of recipes with vitamins, antioxidants, nutraceuticals and other innovative ingredients. This trend will help overcome defi ciencies and enhance personalized health solutions. Combined with greater awareness of obesity, diabetes and other lifestyle diseases, the region will see an increased market demand for healthier product solutions, be it through fortifi cation or reduction of fat and carbohydrates.
JORGEN LUNDGAARD PALSGAARD REGIONAL DIRECTOR, ASIA-PACIFIC
Heart health, body composition, eye health and brain health will remain the building blocks of our strategy for growth. We anticipate above-average growth in all these areas, as the global wellness trend continues to gain momentum.
NORBERT WEITKEMPER COGNIS DIRECTOR OF STRATEGIC BUSINESS DEVELOPMENT, NUTRITION & HEALTH (N&H)
Flexible packaging continues to gain consumer acceptance and market penetration worldwide because the package format is cost-effective, environmentallyfriendly and products can be put into a package via a hot-fi ll, retort or aseptic process. Aseptically-prepared foods and beverages that are offered in resealable fl exible pouches or bags are easy to use and shelfstable, and take up less space in transit and in the warehouse—resulting in more product units per pallet.
GARY ALLANSON INTERNATIONAL DISPENSING CORPORATION PRESIDENT AND CEO
Heightening product safety concerns among consumers (e.g. baby foods and Infant formula milk), newer and healthier/more natural products in the markets (e.g. health drinks, flavored beverages, and healthy fl avored yoghurts) will continue to be the main issues. Food manufacturers will increase internal focus on traceability, operating performance and productivity to drive profi tability.
CHRIS SHELLEY APV VP GLOBAL BUSINESS DEVELOPMENT
0611pg13_01.jpgProduct wise, all Asian food manufacturers want to keep up with their neighbors. This herding effect signifi cantly increases product adoption, leading to overcapacity and the shortening of product life cycles. Under such circumstances, strong brands are essential if food manufacturers hope to maintain or grow market share. Claims made should be truthful, and a claim should be scientifi cally substantiated by taking into account the totality of the available scientifi c data, and by weighing the evidence.
IR. KOEN VAN PRAET ORAFTI REGIONAL MANAGER, ASIA
We expect several opportunities to explore and participate in consumerproduct reformulations as many of the key ingredient costs, such as sugar and energy, continue to increase or remain high. The right enzyme solutions can save energy, improve ingredient functionality, decrease the environmental impact of a manufacturer, and reduce the total processing costs of fi nished goods.
JOHN SLADE NOVOZYMES MANAGING DIRECTOR
With growing affluence and a more sedentary lifestyle, health issues such as obesity as well as heart-related diseases are increasingly becoming a regional and global issue. Hence ‘heart-healthy’ products and services are areas of great interest to all.
MR JAMES WONG NESTLE SINGAPORE COMMUNICATIONS & CORPORATE AFFAIRS MANAGER
There is a growing demand worldwide for the health benefits from fortifi ed products, particularly those with organic, natural or energy-boosting ingredients. This trend is refl ective of the consumer's desire to maintain and improve energy, reinvigorate and replenish body fl uids, manage weight gain and enhance the nutritional value of popular foods and beverages. A few of the high-demand ingredients being used are taurine, antioxidants and lycopene, which fulfi ll the desire of consumers for added energy and healthier options. Other ingredients poised for growth include fi bers, proteins, soy isofl avones, CoQ10, plant extracts and probiotics. The challenge for manufacturers is incorporating these ingredients and other nutrients into beverages, while avoiding the bad taste, sedimentation and other consequences that often result from ingredient interaction. DR RAM CHAUDHARI FORTITECH SR EXECUTIVE VICE PRESIDENT, CHIEF SCIENTIFIC OFFICER & CO-FOUNDER
Fresh fermented dairy products were worth $ 10 billion in Asia Pacifi c at retail level in 2005. In 2007, this market will be strongly supported by the double-digit growth in China. Freeze-dried cultures will continue to be the preferred format in Asian countries as they remain stable for 18 months at 4°C, eliminating the use of freezers and reducing storage volume. Freeze-dried probiotic cultures can bringing a healthy touch not only to fresh dairy products but also to powder applications, such as powder beverages or infant formulas.
SAADANE OAKS DANISCO CULTURES PRESIDENT
With obesity and diabetes on the rise throughout the region, we expect the demand for sugar-free, low or zero-calorie products to grow even more. We estimate the global confectionery category, for instance, to grow globally by three percent in the next few years, and this estimate can be doubled for Asia Pacific.
PAUL VRIJHOF, PRODUCT LINE MANAGER, CARGILL SWEETNESS SOLUTIONS-SINGAPORE CARGILL
As Singapore progresses to become a truly international and cosmopolitan city, Singaporeans are becoming increasingly adventurous and well-travelled, and have greater exposure to international media. As such, we are noticing that consumers are starting to make more discerning choices, especially when it comes to beer. Gone are the days of sticking to one beer brand. Consumers are starting to select different beers for various occasions. For example, one may choose to have an Erdinger for a chill-out drink after work; but will drink a Tiger during a bonding session with friends, and a Heineken when at a club.
MR. ALAN GOURDIE ASIA PACIFIC BREWERIES SINGAPORE GENERAL MANAGER
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