The food and beverage sector in the Asia-Pacific (Apac) region is expected to remain buoyant in 2025, but small and medium-sized (SME) exporters must adapt to shifting consumer preferences and challenging market dynamics to enter the market, according to a survey by Singapore-based consultancy Incite.
The recently published survey, which was conducted in 2024 and polled more than 2,500 food and beverage importers and distributors from 11 Apac countries, found that 97% of respondents were actively reviewing new distribution opportunities.
However, distributors are becoming more selective about the brands they approve, with 89% saying they onboard just half of the new distribution opportunities they receive. This comes amid increasing competition from local brands, rising operational costs and changing consumer behaviours.
"While new brands (both locally manufactured and imported) are entering export markets across the region, only a select few gain long-term traction by implementing strategies that resonate with distributors and their value-conscious retailers and consumers," the report says.
According to research by consumer behaviour advisory firm Circana, food and beverage unit sales in the Apac region are expected to grow by 1.6% in 2025, leading to a 4% increase in value growth across the sector.
"This increase reflects a positive outlook for consumer confidence, driven by anticipated interest rate cuts and a gradual shift in spending from food service to retail," Circana says in its market outlook report.
This is despite global inflation and economic challenges continuing to influence shoppers, who are increasingly focused on finding value and seeking out the best deals, the Incite survey found.
"A viable pricing strategy is crucial," says William Gordon, commercial director at Incite.
"We've seen how economic conditions have suppressed demand in the super-premium category. However, there is still opportunity in the mid-to-premium segment, provided consumers feel they are getting value, whether through taste, quality, or health benefits."
The Incite survey recommends that exporters think carefully about selecting the right distributor for their category, as well as how to differentiate themselves from other brands by focusing on issues that are most important to distributors, such as pricing, shelf life and marketing support.
"Knowing end-to-end pricing and margin structures allows brands to show how they see their products being positioned against current competing brands in the market," says Nada Young, founding partner and head of client strategy at Incite.
"Having a grasp of market fundamentals and what is required to survive and grow gives distributors and their customers confidence in the brand," Young adds.
When assessing opportunities, 94% of survey respondents say that pricing is the most important factor, closely followed by product taste and quality at 93%.
Shelf life is also an important factor at 81%, while ease of logistics and product handling are key considerations for 50% of the companies polled.
The study also found that the number of distributors importing EU and UK products had increased since 2023 despite logistics issues in the northern hemisphere, such as geopolitical disruptions impacting shipping routes in the Red Sea, which has increased pressure on air freight capacity.
While New Zealand and Australia have a geographical advantage over their northern hemisphere competitors, Incite says that a diversity of international brands are making their way into the Apac market.
Customers are still shopping for imported products, but increasing competition from local brands means that premium pricing needs to be justified, it says, adding that dairy and savoury snacks remain the top two in-demand categories.
"Consumers are looking to stretch their dollar. New brands that offer the best value proposition will have the best chance of success," said a survey respondent from Singapore.