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What the New Packaged Food Data is Telling Us: A Look into Latest Trends and Additional Markets

10-11-2017

Written By:
Lianne van den Bos
Euromonitor
Senior Analyst - Food

In 2017, packaged food continues to look to Asia Pacific and the Middle East and Africa for global growth, with these two regions posting retail value growth of 4% and 12%, respectively. Combined, these two regions have now increased their share of overall packaged food sales from 33% in 2012 to 36% in 2017. This shift is also noticeable in global brand rankings where three of the top five global packaged food brands are Chinese brands. To reflect the reliance on both regions for growth, Euromonitor has now extended its direct researched country coverage by 20 markets of which the vast majority are from Middle East Africa and Asia Pacific. Conversely, developed regions remained stagnant, with Western Europe and North America seeing an outright decline in packaged food sales between 2016 and 2017.

Of the different food types, dairy has been one of the largest contributors to global growth with the vast majority of sales coming from Asia Pacific. China, unsurprisingly, drives this growth with a strong uptick in yoghurt sales and soy milk drinks, resulting in consumers moving away from, a previously favoured drink, other milk alternatives (e.g. peanut, almond and walnut milk drinks).

China’s booming demand for other milk alternatives goes sour whilst soy milk drinks benefit

After a long period of success for other milk alternatives in China, other milk alternatives has seen a strong decline over the last few years (-10, -8% RSP 2016, 2107) as it is considered overly processed by consumers, due to its long ingredients list. Furthermore, limited product innovation resulted in consumers’ lacking excitement for the drink. Soy milk on the other hand (+7% RSP CAGR 2012-2017), is a traditional drink for Chinese people, consequently the product acceptance is relatively high. Dou Ben Dou, a new soy milk product launched by Dali in 2017 for example, claims to have no additives at all. Two ingredient lists are shown below for comparison.

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Similarly, the previous high growth of walnut drinks (other milk alternatives) was mostly attributed to the concept of it enhancing brain health and improving memory, which was exposed to be exaggerated by Yangyuan which is the major producer of walnut drinks in 2015. From a taste perspective, Chinese people do not deem walnut drinks to be any better than soy drinks.

New researched markets differ substantially in spending patters

The latest edition of Packaged Food research expanded the number of researched countries from 80 to 100. The newly added 20 markets are shown below, sorted from the largest total market value size, Iraq, to the smallest market, Cote d’Ivoire. When grouping all packaged food categories into the four types, staples, cooking ingredients and meals, dairy and alternatives, and snacks, it becomes obvious that the types of packaged food consumers spend their money on varies quite strongly between the countries. However, it illustrates that in the majority of these countries staple foods and dairy account for more than half of total packaged food value sales. Cooking ingredients and meals as well as snacks tend to account for smaller proportions of the share of wallet for consumers in these countries.

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In Ghana, dairy products and alternatives stands out for generating a very large proportion of packaged food sales. Sales for this category are projected to amount to USD2.8 billion for 2017. Around three quarters of this is generated by drinking milk products, of which powder milk accounts for the lion’s share (more than two thirds). A lack of refrigeration – either in the supply chain, the retailers or at home – remains a stumbling block in many less developed countries and is the main reason for powder milk’s strong position within drinking milk products in these countries.

Ethiopia stands out for generating a large proportion of sales of cooking ingredients and meals. The majority (77%) of these sales can be attributed to sauces, dressings and condiments and within this, almost half of sales come from stock cubes and powders.

In Côte d'Ivoire, sales of staple foods account for more than 50% of total packaged food value sales. Within staples, most sales stem from baked goods which are traditionally of high importance in consumers’ diets and generate more than 80% of all staples sales – which is the equivalent of more than 40% of total packaged food sales in the country.

Further details on these additional 20 markets can be found in the country reports which will be published from October 2017 onwards.

For further information please contact Lianne van den Bos via Lianne.vandenBos@Euromonitor.com, Pinar Hosafci via Pinar.Hosafci@Euromonitor.com, Raphael Moreau via Raphael.Moreau@euromonitor.com or Wiebke Schoon via Wiebke.Schoon@Euromonitor.com