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Food, Beverages & Agricultural Commodities Industry Outlook
+ Case studies of Spire's work in Food, Beverages & Agricultural Commodities
Recent global public scares over tainted food have prompted consumers to pay more attention to their food labels. At the same time, recent fluctuations in agri-food prices remain a major concern to industry players and consumers alike.
Governments, particularly those in Asian countries that depend on food exports, are enforcing stricter regulations on food quality and safety. This, in turn, is compelling more food manufacturers to adopt more stringent procedures such as the HACCP (Hazard Analysis and Critical Control Points) standard – a major development that is driving investment across value chains for both primary produce and processed food.
Even as food production becomes more complex, manufacturers are now faced with the challenge of balancing higher, compliance-driven costs and falling demand for some categories of (mostly processed) food. One trend is the repackaging of products into smaller pack sizes to cater to price-sensitive consumers. Another is the introduction of “no-frills” house brands that are priced competitively.
Food prices will grow gradually over the next few years as underlying commodities prices pick up while the cost of compliance creeps into final-tier pricing. All these are, ultimately, driven by the dynamics of changing food demand from emerging countries, particularly in Asia which accounts for over 50% of the world’s population. As a function of increasing affluence, demand has been rising – for meat, milk and processed beverages in emerging countries, and for health-foods, supplements, juices, organic food, wine and convenience foods in industrialized countries. While demand in industrialized regions may see a slowdown with the current crisis, demand from low-income, emerging countries will be much less affected.
Fuelled by food quality issues in China (think melamine and tainted milk) as well as strong domestic fundamentals, ASEAN is emerging as a food production hub to complement China. Countries such as Thailand and Vietnam are growing as food manufacturing hubs due to their high efficiency, low operation costs and availability of raw materials. Australia is also poised to maintain its healthy export position to emerging Asia, provided the Australian dollar does not surge in value.
Food is widely viewed as a defensive sector in times of recession. Undeniably, mounting affluence in emerging markets and finite resources for cultivation will lead to rising prices in the medium term. However, with the gradual liberalization of trade in food products, national food and beverage markets are poised to become more competitive. Industry players need to focus keenly on the growth opportunities that are arising from the burgeoning middle class in emerging markets and its inevitable attraction to “healthier” foods in the future.
Spire’s food, beverages & agricultural commodities expertise
Spire is proud to have delivered a substantial body of work in food and beverage products, ranging from market entry studies to full-blown marketing strategy audits and reviews for food export associations.
Our work in the food, beverage & agricultural commodities space has addressed categories ranging from primary produce, processed foods, alcoholic and non-alcoholic beverages to non-edible agricultural products such as palm oil and wood.
Case Studies:
To request more information on our research and consulting services in the food, beverage & agricultural commodities industry, please contact either our country offices or email info@spireresearch.com.
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