Disrupting Southeast Asia’s food and drink market

August 1, 2019
4 min read

Southeast Asia is seeing a rise in market disruptors in the food and drink industry with innovative companies coming up with new product concepts and route-to-market strategies.

The success of disruptors is a reflection of their uncanny ability to tap into opportunities from emerging consumer food and drink trends. Moreover, a strong understanding of local consumers makes a difference.

Disruptors defined

Disruptors don’t necessarily have to be a food or drink manufacturer; they can be a food retailer, online meal delivery business, or cooking equipment brand. Basically, anything that impacts the way consumers buy, prepare and consume food or drink can be defined as a market disruptor.

Globally, smaller brands are shaking up food and drink categories with new flavours, formulations and go-to-market strategies. One classic example is the success of Halo Top in the US with its low-calorie and high-protein recipes, which has resulted in a global surge in ice cream formulations that are fortified with added protein and feature ‘low/no/reduced’ sugar content.

Within Southeast Asia, disruptors are challenging established players by innovating with more suitable route-to-market models and healthy foods, and by standing out using flavours, shapes and textures.

Unique distribution models and novel offerings

Established in 2015, ice cream maker Aice Group Holdings has scored success in Indonesia. The keys to the company’s success are strong distribution, affordable pricing and unique offerings.

According to the company, by the end of 2017, it had around 80,000 distributions points (including the rural areas) of which 15,000 were located in the capital, Jakarta. This nationwide figure was said to have reached 100,000 by September 2018. Aice has tapped into resellers to rapidly build a vast network of stores—a model that has a low entry cost and is suitable for micro-, small- and medium-sized enterprises. While Aice ice cream can be found in modern retail outlets, resellers have been one of the company’s key growth drivers.

Meanwhile, the brand’s eye-catching fruit- and vegetable-shaped and flavoured ice creams, such as mango, watermelon and corn, have caught the attention of Indonesians, aligning with Mintel’s 2016 Global Food & Drink Trend ‘Eat With Your Eyes’. Beyond flavours and visuals, Aice has also successfully innovated with texture, the latest tool used to engage the senses and deliver share-worthy experiences, according to Mintel’s 2018 Global Food & Drink Trend ‘New Sensations’. Food and drink designed with texture in mind have the potential to engage young consumers who are hungry for experiences that are worthy of sharing online.

Novel, eye-catching shapes
Aice Watermelon Flavoured Ice Stick

Playing with textures
Aice Chocolate Mochi Ice Cream

Better-for-you choices

Companies have found new opportunities to fulfil the growing demands from Southeast Asian consumers for healthy foods and drinks. Mintel research reveals that almost three in four urban Indonesians describe all-natural ingredients as ‘healthy food’, while four in five urban Thais say that they want to have a healthier diet.

Thai brand, Diamond Grains, has carved a niche for itself by filling in the gaps in the healthy breakfast space with its better-for-you (BFY), clean and preservative-free granola—a product concept that’s said to be a first in Thailand. While Diamond Grains products are mainly granola, also in their mix are instant congee, overnight cereal and malt flake—all of which are positioned as healthy breakfast options.

In fact, Brunchtime, the company behind the Diamond Grains brand, has superseded many multinational companies in Thailand with its range of products that are free from refined sugar, MSG, milk and wheat flour.

Enjoy granola in two different ways
Diamond Grains Two Ways Almond Horizon Granola can be enjoyed in two ways: crunchy as-is or soft after soaking overnight. It contains wholegrain oat (50%), cashew nut (15%), almond (14%), malt flakes (5%), chia seeds (5%) and rice bran oil (3%).

Innovate with unique flavours
Diamond Grains Thai Tea Granola is free from wheat and dairy, and comes in flavours that resonate well with Thai locals, including matcha green tea, strawberry, mocha, honey and banana.

Heng Hong Tan
Heng Hong Tan

Heng Hong is Mintel’s Senior APAC Food and Drink analyst based in Kuala Lumpur. He comes with over a decade’s worth of experience identifying emerging food and drink trends.

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