Pushing past pricing: Nestle targets premium and healthy ageing innovations to boost performance
Global food and beverage giant Nestle has its eye on expanding its premium and healthy ageing product portfolios as it seeks to return to ‘normalised’ growth.
Nestle reported a -1.5% year-on-year decrease in sales to CHF93bn (US$) but an increase of 17.3% in underlying trade operating profits to CHF16.1bn (US$) when it announced its FY2023 full year financial results.
In the firm’s financial results press conference which FoodNavigator-Asia attended, Nestle CFO Francois-Xavier Roger highlighted that overall organic growth for the company has been estimated at a 7.2% growth year-on-year – but that this was made up of 7.5% pricing growth and -0.3% of what the company calls Real Internal Growth (RIG), which is a measurement of growth generated by volume and mix/innovation.
Acknowledging this as an unsustainable means to long-term growth, Nestle CEO Mark Schneider told the floor that the firm was committed to move back to RIG-led growth in 2024, laying out several strategies towards this.
“The food sector softness that has been seen over past two years globally has come from a food price increase spike that is the highest we have seen in some 50 years since 1973 to 1974, coming in at a 14.7% spike which is the highest since the 16.3% we saw back then,” Schneider told us.
Not-so-sweet baby: Philippines congress could ban added sugar in foods for young children
Members of the Philippines government have called for regulations that would officially ban manufacturers from using added sugar as an ingredient in foods for young children aged three and below.
Sweetness and sugar features strongly in many Filipino foods and can be exemplified by one of the country’s most popular desserts halo-halo, which is an amalgamation of various sweetened ingredients.
This has culminated in the rapid rise of obesity and overweight individuals in the Philippines over the past two decades, according to the national science agency Department of Science and Technology (DOST)
As of 2022 some 27 million Filipinos were either overweight or obese, with the percentage of this having nearly doubled from 20.2% in 1998 to 36.6% in 2019. Even more alarmingly, similar findings were observed in the younger generation where adolescent obesity and overweight rates also nearly doubled from 4.9% in 2003 to 11.6% in 2018.
“Recent data has found that young Filipinos are at a greater risk of obesity, due to the consumption of food that is energy-dense and nutrient-poor, exacerbated by growing urbanisation and increased incomes,” Senator Imee R. Marcos highlighted to the Senate earlier this year when tabling the bill calling for a ban on using added sugar in food products for young children.
“The government and agencies concerned [need to] implement a ban on added sugar in food for young children, [and] producers/manufacturers shall take responsibility to remove added sugar and look for healthier alternatives in their products.”
‘Protein out of thin air’: World-first chocolate promises high-iron, high-fibre option for vegan and health-conscious consumers
Finnish food company Fazer launched the world’s first chocolate made using ‘protein out of thin air’ in Singapore earlier this year, citing its high iron and fibre content as attractive for vegan and health-conscious consumers.
The ‘protein out of thin air’ in question was Solein, developed by foodtech company Solar Foods, which Fazer is a major investor and stakeholder in. Solein obtained regulatory approval as a novel food product from the Singapore Food Agency in 2022.
Fazer is one of Finland’s most well-known chocolate brands, and is best known for its Geisha and KarlFazer brands in the Asia Pacific region. The firm has dubbed this novel chocolate ‘Taste the Future, highlighting its status as the first ever FMCG product to utilise Solein.
“We felt that with such a novel ingredient it was important to focus on a product format that consumers are familiar with, and since Fazer is best known for our chocolate it made sense to formulate in this format first,” Fazer Corporate Ventures Senior Manager Siiri Pihlainen told FoodNavigator-Asia at its first tasting event in Singapore.
“With the addition of Solein, Taste the Future is one of the only chocolates available that are fortified with high iron content as the process of fermenting and generating the protein itself leads to the production of iron.
“What’s important here is that we are also marketing this as a vegan product, and vegan consumers tend to face a lack of iron due to their diets and need to take supplements to make up for this – now, this iron can be consumed in a much more enjoyable form, i.e. chocolate.”
Polarised patterns: Fonterra, Yili and more big APAC dairy firms on how wellness and enjoyment trends are driving industry
The twin trends of health and wellness alongside indulgence and enjoyment have been driving APAC dairy industry growth and opening up a raft of new innovation opportunities, according to industry leaders including Fonterra, Yili, Parag and more.
The popularity of dairy in APAC has not traditionally been uniform, with markets such as Australia, New Zealand and India dominating production and demand. But in recent years more Asian markets including China and Vietnam have gained in interest in this sector.
One of the key drivers is wellness and nutrition, particularly in China where the government and industry associations established consumer guidelines for daily dairy consumption in 2020 amid the COVID-19 pandemic.
China dairy giant Yili was a beneficiary in the resulting dairy boom and has major operations not only in China but also in New Zealand and South East Asia.
“New Zealand is of course a long-time dairy consumption market, whereas China is a newer one, and we have definitely seen how consumer preferences in both of these markets differ quite substantially,” Yili Innovation Centre Oceania Head Philip Wescombe told FoodNavigator-Asia.
“In New Zealand, consumers are very conservative in their dairy preferences and place very strong emphasis on the quality and the traditional dairy experience – they view dairy sort of like they view wines, and have a connoisseur-like approach to it.
“In China though, consumers are all about seeking out new experiences when it comes to dairy – this means that we have a lot more scope to play in and more opportunity to combine different ingredients."
Hassle-free healthy eating: Australia’s v2food eyes new avenues of growth through acquisition of ready meals brand
Australia’s plant-based pioneer v2food has been looking to strengthen its position in the category through the acquisition of ready meals brand Soulara, with portfolio expansion and broadening sales channels as growth drivers.
The acquisition process started in September 2023 and concluded in January 2024. According to Tim York, CEO of v2food, one of the main reasons for this move is the common customer base shared by plant-based and ready meals categories.
“Most of our products are ingredients that go into meals, such as burgers, sausages, mince, crumbed chicken, etc. We’ve been exploring new avenues of growth and one category we are most interested in is ready meals because we see a big overlap with the consumer demographic for plant-based foods.
“Ready meals are typically sold to single-income or ‘dual income, no kids’ households, and consumers in the 20s to 30s age bracket, which are the core demographics interested in plant-based foods. The key motivation for consumers to adopt a plant-based diet is health, while the biggest driver of ready meals is convenience — plant-based ready meals address both, so it made a lot of sense for us [to acquire Soulara],” York told FoodNavigator-Asia.
Baked in: Mondelez on how baked goods are set to play key role in driving forward APAC snacking market
Snacking giant Mondelez International has stated that baked snacks are set to play a major role in propelling the APAC market , underscoring this belief with the launch of its new US$5mn bakery-focused facility in Singapore.
The firm launched its new Regional Biscuit and Baked Snacks Lab and Innovation Kitchen located in Singapore earlier this year, with the aim of boosting bakery product innovation for the Southeast Asia and Australia, New Zealand and Japan markets.
“Bakery is such an important category for us in this region, which is the reason why we decided to make this US$5mn investment into establishing the new facility here in Singapore,” Mondelez VP R&D AMEA, Biscuit Category Leader Marco Michielsen told FoodNavigator-Asia at the launch event.
“We want to specifically target the innovation of biscuits and baked snacks in this region by being closer to consumers to understand struggles and compromises they have to make when choosing their snacks.
“The importance and relevance of bakery is very high here due to strong demands we already see for snacks that are ‘baked not fried’ – as it is, many companies are looking to move into this category due to the correlation of this making for a healthier snack.
“The main point here is to provide a wide variety and specific combinations of delicious and nutritious options for consumers across all market channels against specific price points, a key strategy to ensure accessibility and affordability as this is the only way to empower them to snack healthy.”
Snack trends unwrapped: Holistic wellness and protein focus among top innovation drivers across South East Asia
The protein and premium snack segments have been seeing annual growth rates of more than 50%, and holistic wellness remains the biggest driver of innovation, according to a market intelligence report.
The findings were based on data as of April 2024, collated into the report “Snack Trends Unwrapped: What’s Shaping the Way We Snack?” by market intelligence firm Ai Palette, which leverages AI technology and studies trends across social media platforms.
The report listed six trend drivers – holistic wellness, protein focus, sustainability, premium indulgence, convenience, and demand for low or no sugar.
Researchers estimated that 130 million consumers are fuelling the holistic wellness snack segment, with a 43% increase in the two-year compound annual growth rate (CAGR).
The protein and premium segments are supported by a total of 40 million consumers, with two-year CAGR increases of 59% and 54%, respectively.
“Consumers prioritise tastier and healthier food choices, due to their focus on holistic wellness. [There’s also a] surge in protein-fortified snacks for satiety and muscle health,” wrote researchers in the report.
Driving transformation: PepsiCo expands healthy portfolio, ramps up innovations to meet global nutrition needs
Food and beverage giant PepsiCo said it is continuously improving the nutrient density of products and expanding its better-for-you portfolio, based on a strategy that aligned with both global and local dietary guidelines.
With products sold under multiple brands in over 200 countries around the world, PepsiCo raked in approximately $91bn new revenue in 2023.
According to the company, consumer demands for healthier products, clean labels, recognisable ingredients, and convenient products with positive nutrition are driving its portfolio transformation.
To purposefully improve the nutritional profile of its products, PepsiCo has established an end-to-end strategy named PepsiCo Positive (pep+) to develop a more sustainable, regenerative, and inclusive food system.
“The strategy comprises three key pillars, one of which is ‘positive choices’. This includes expanding our portfolio to offer consumers more and better product choices that are good for both people and the planet,” said Liu Feng, R&D Senior Director, Life Sciences at PepsiCo Asia Research & Development Center, during his presentation at Growth Asia Summit 2024.
The company has laid down ambitious goals to reduce sodium, saturated fat and added sugars in its products by 2025.
2024 beverage trends in South East Asia: Hydration leads non-alcoholic innovation
Beverage brands in Southeast Asia have found various growth opportunities in enhanced hydration drinks, catering to consumers across a variety of lifestyle needs, according to market intelligence firm Mintel.
The demand for enhanced hydration has been driven by taste, health benefits, and the need to cope with extreme weather.
“The hydration trend stems from hot weather, air pollution fears, and a desire to improve skin health. Western influences, like the belief that energy drinks provide better hydration than water, also play a role,” said Tan Heng Hong, senior food & drink analyst at Mintel.
Tan spoke at Fi Asia 2024, where he shared that 55% of consumers over 18 believe these drinks offer better hydration than water. This was according to Mintel’s Sports and Energy Drinks Report for Thailand.
A significant portion of Southeast Asians are reluctant to drink water despite its benefits which is is reflected in a decline in water product launches, from 6% in 2019 to 4% in 2023.
In contrast, nutritional drinks saw the largest growth, from 12% to 17%. Juice drinks declined from 23% to 13%, while carbonated drinks rose from 6% to 9%.
The rise in carbonated drink demand is attributed to their refreshing taste, appealing in hot weather, while juice drinks may have fallen due to higher sugar content.
Beyond fortification: Yili highlights clean label and high-protein demands from Chinese consumers
Dairy giant Yili said that clean label and high protein content are now just as important to Chinese consumers as fortification.
Yoghurts are generally recognised as a nutritious food in China and according to Yili, fortifying with protein or calcium is no longer acceptable as an added benefit for Chinese consumers, who have much more specific expectations.
“Consumers are attaching greater importance to the nutritional value of yogurt as demands for nutrition have also evolved, which means they are no longer satisfied with yoghurts that are traditionally fortified using things like protein and calcium supplements,” Yili Group Yoghurt Business Unit Product R&D Manager Yin Xiaojing told FoodNavigator-Asia.
“They now have more advanced and specific demands regarding how high concentrations of calcium and protein need to be, the content of the original raw milk, clean labels, as well as additional fortification with dietary fibre and vitamins.
“This is further enhanced by the fact that more functional yogurts are emerging [focusing on] health issues related to immunity, digestion, sleep and physical ability, with mental stress and weight management now found to be the main concerns of younger consumers between 16 to 24 years old.”
