Willingness to pay
a premium for
healthier choices
Despite the high volume of sales of HW
products Asia has been experiencing,
Euromonitor International believes that
the market is far from being saturated. In
fact, it has the second-lowest per capita
consumption of HW products of any region,
only above Middle East and Africa.
The advantage of manufacturers thinking
of expanding their businesses in Asia Pacific
is that the consumers in the region are
relatively more adventurous and willing to
try out new functional ingredients. In order
to stay ahead of the trend, they need to
tap into this openness, and be willing to
launch new variants of novel, functional
ingredients.
An interesting recent development is
Vietnamese scientists and cooperatives
have recently bred medicinal rice varieties
with a high nutrition content that were
reported by Vietnamese media in late 2015
to be “selling like hot cakes,” despite a
significant price premium. Loc Troi Group,
for example, has Vibigaba, which is suitable
for diabetics, and is working on a new rice
variety which helps stabilise blood sugar
levels, prevent atherosclerosis and provide
high nutrients.
Consumers believe health attributes are
important, but are they willing to pay more
for the benefits they provide? The answer is
yes—to a degree. Based on a 2015 Nielsen
report, a willingness to pay a premium for
health benefits is higher in developing
markets than elsewhere. More than ninein-10 respondents in Asia-Pacific (93%)
say they’re willing to pay more for foods
with health attributes to some degree,
compared to about eight-in-10 in Europe
(79%) and North America (80%).
Conversely, the willingness-to-pay-more
scale in Asia-Pacific more closely resembles
the global average spending buckets: The
highest percentage of respondents are
moderately willing to pay a premium (41%),
followed by those that are very willing (30%)
and slightly willing (22%). All attributes in this
region are weighted more similarly, but
there still are some differences. The biggest
willingness-to-pay gap is also between
those very willing to pay for all natural
products (43%) and those very willing to
pay for products with no high fructose corn
syrup (22%).
In Asia-Pacific, the importance of food
attributes largely mirrors the global
averages, with a few exceptions. The desire
for sustainably sourced ingredients (43%)
is higher in Asia-Pacific than in any other
region except Latin America (tie), and it
is the second most important attribute for
respondents in the region. The absence
of caffeine is also rated more important in
Asia-Pacific (28%) than worldwide (23%).
Percentage very willing to pay a premium for each attribute
Global Average
Back to basics
43%
All natural
43%
GMO free
42%
No artificial colours
41%
Made from vegetables/fruit
40%
Natural flavours
30%
Less is more
No/low cholesterol
38%
Low sodium/salt
33%
Low sugar/sugar free
32%
Low/no fat
30%
Low/no calories
27%
Low/no carbohydrates
27%
Caffeine free
26%
Gluten free
24%
Portion control
23%
No high fructose corn syrup
21%
More is more
High in fibre
36%
High in protein
32%
Whole grain
30%
Calcium fortified
30%
Vitamin fortified
30%
Minerals fortified
29%
Micronutrient fortified
25%
Rich in unsaturated fat
23%
Sustainable
Ingredients sourced
35%
sustainably/fair trade
Organic
33%
Local herbs/ingredients
26%
Nielsen 2015
Asia Pacific
43%
43%
44%
42%
39%
33%
37%
34%
30%
29%
29%
26%
25%
26%
28%
27%
36%
34%
29%
31%
30%
30%
26%
21%
43%
36%
27%
10
Halal ingredients
The Muslim population in Asia in 2014 was
estimated to be almost 1.4 billion, or around
32% of the total population. Globally,
the Muslim population is growing faster
than others, and is increasingly seeking to
consume only Halal-certified products.
A good example is gelatin, which
according to a recent article on the
Global Islamic Economy Gateway the
global gelatin market was estimated at
$2.7 billion in 2015, and gelatin for use in
pharmaceuticals and nutraceuticals, at
$0.8 billion. Muslims spend accounted for
an estimated 17% of total global food and
beverage expenditure in 2014, but less
than 3% of gelatin is made from halal or
permissible ingredients. This means a clear
demand for greater production of halal
gelatin. Worldwide Gelatin consumption
is forecast to reach 395,840 tonnes by the
year 2017.
Recently several Asian companies have
taken up the challenge of producing nonporcine gelatin. For example, Vinh Hoan,
Vietnam is producing Progel, a certified
Halal marine gelatin.