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  1. Analysis
August 31, 2007

Changing Asian lifestyles spurring “meal solutions”

The increasing Westernisation and consumer sophistication in Asia Pacific markets is reflected in rising sales of processed meat and vegetables and ready meals. Emily Woon of Euromonitor International examines how changing lifestyles are spurring growth in the meal solutions market across the region.

The increasing Westernisation and consumer sophistication in Asia Pacific markets is reflected in rising sales of processed meat and vegetables and ready meals. Emily Woon of Euromonitor International examines how changing lifestyles are spurring growth in the meal solutions market across the region.

Growing sales of processed food, particularly products such as ready meals, can be seen as a key barometer for the Westernisation of developing markets, and it is therefore no surprise to find that seven of the world’s fastest-growing major markets for “meal solution” products are in Asia Pacific. According to Euromonitor International, the market for meal solutions grew rapidly between 1998 and 2006 in Vietnam, Azerbaijan, India, Taiwan, Indonesia, Kazakhstan and Pakistan.

Growth in this sector, which includes ready meals, pasta and processed meat, fish, seafood and vegetables, has been spurred by urbanisation which is changing traditional consumption patterns and driving demand for convenient food products. In developing markets such as Vietnam, India, China and Indonesia, the emergence of an urban middle class with higher purchasing power has driven demand, while the development of urban retail infrastructures have widened the availability of such products.

To see just how close the link between growth in meal solutions and a market’s overall development is, one need look no further than Taiwan and South Korea, two of the region’s most developed markets. It is clear that in these countries, demand for convenience and the ability to pay for it, has fostered growth in the meal solution market, which has in turn resulted in increasing sophistication of the product offer.

Taiwan, for example, had the second-highest per capita expenditure (US$28) on meal solution products among the world’s ten most dynamic markets in 2006. The developed nature of the Taiwanese market, underpinned by growing urban populations and rising disposable income, is highlighted by the fact that ready meals was by far the most valuable meal solution in Taiwan last year. Industry surveys suggest as many as 60% of white-collar urban residents in Taiwan do not regularly eat dinner at home, with many – particularly those aged between 21 and 45 – buying chilled ready meals at convenience stores.

However, other dynamic markets in Asia Pacific, including Vietnam, the world’s fastest-growing market between 1998 and 2006, are characterised by low levels of disposable income, limited distribution infrastructures and large rural areas. Growth in these markets is being driven by urbanisation, with the expansion of cities eroding traditional social structures, attitudes and behaviours. Urbanisation is also boosting purchasing power and creating opportunities for the development of modern retail channels such as supermarkets/hypermarkets, and the products such retail formats offer. In India in particular, the development of shopping malls has played an important role in driving the expansion of the country’s fast-growing retail market.

However, even with such developments, ready meals remain a minor feature of the meal solution products landscape in most of the fast-growing emerging markets in Asia Pacific. Euromonitor research suggests that, in these markets, the growth in ready meals continues to be constrained by low purchasing power, limited distribution and a lack of product awareness.

In markets such as Indonesia, processed versions of traditional foods, such as processed meat and fish/seafood, are driving growth. Chilled and frozen bakso, or beefballs, have become popular processed meat products in Indonesia, for example. This trend is also illustrated by growth in frozen poultry sales in Indonesia. Chicken is a traditionally popular meat in Indonesia, where pork consumption is limited due to the country’s predominantly Muslim population, and beef remains too expensive to be consumed frequently by a large proportion of consumers.

Consumer concerns about the threat from bird flu had a dampening effect on the growth of poultry sales, but they still outpaced value growth in other processed meat and fish/seafood categories in 2005 and 2006.

Processed meat was in fact the most valuable sub-sector in Indonesia, Vietnam, Pakistan and Kazakhstan in 2006, while fish/seafood led in Azerbaijan, and accounted for a high proportion of sales in Vietnam and Indonesia.

In India, the development of processed meat is being constrained by the preponderance of vegetarian diets and religious restrictions on the consumption of pork and beef. The wide availability of inexpensive fresh produce has also constrained the development of canned/preserved vegetables, while growth in chilled and frozen vegetables is restricted by the lack of refrigeration facilities. Nonetheless, processed vegetables ranked as the second most valuable meal solution products category in 2006 according to Euromonitor International. Ready meals constituted the most valuable meal solution sector in India in 2006, with sales worth $32.8m. The convenience of ready meals marked them out as the most preferred alternatives to fresh and homemade food.

Over recent years, there have been signs that trends in fast-growing emerging markets in Asia Pacific were moving in the direction of more developed countries. In Vietnam, for example, there has been growth in consumer health-consciousness, underpinned by increased access to information and the ability to consider factors other than price in purchasing decisions. As a result, sales in frozen fish/seafood have been boosted, further aided by concerns about disease in pork, beef and poultry.

The meal solutions market in China has also displayed strong growth, driven by similar factors to those seen in other emerging Asian markets. Trends in processed fish/seafood suggest consumption patterns are converging with those in developed regions, with growth in traditional products, such as canned fried anchovy, now being complemented by the growing popularity of new products like canned tuna. Similarly, in processed meat, Chinese roasted sausage and Western-style sausages, such as hotdogs, are both growing in popularity.

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