You are what you eat. One would have heard this statement in different contexts too many times. Prosperity from the growing economy across Asia has seen a shift in local appetite from staple grains toward more meat, fish and other foods.
The research report on the “Philippines Food and Drinks Market: Emerging Opportunities” attributed the rise in the demand for health food and drinks to the growing young affluent population, rising disposable income and increasing consumer awareness of health and safety concerns.
Affluent consumers in markets like India, China and Southeast Asian countries, including the Philippines, are demanding quality and attributes like ‘organic’ and ‘green’ labels.
Flavor trends in food continue to evolve as companies seek to meet changing consumer tastes, expand into new consumer groups and bring more sophistication to brands in the face of high levels of brand competition. These changing taste trends are forcing companies to rethink food flavoring and packaging to appeal to consumers.
Asian consumers’ shifting tastes
According to a survey by the Philips Index Health and Living, 54 percent of the Filipino population rated themselves as conscious about their health and well-being. Filipinos are paying more attention to their food intake and are steering toward foods that are beneficial to their bodies and that sustain their health.
Despite the huge progress that local manufacturers have made in Southeast Asian markets, a Global Intelligence Alliance (GIA) survey in the region reveals that the majority of the people in these markets believe foreign products are better than local products (88 percent in Southeast Asia), while they all acknowledge that local brands are improving in quality.
Tapping new consumers
In order to reach deeper into the emerging markets and to capture this large, hungry consumer base in the Philippines, companies thinking of venturing or expanding into the Philippines need to be clever about what markets and products they should target.
Top flavor experts say 80 to 90 percent of food manufacturers face the problem of not channeling their products efficiently because they are not reaching out to their consumers effectively. The food manufacturing industry is experiencing a shift in the way they reach out to consumers. Gone are the days when theoretical hypotheses by flavor experts seated in a room throwing about technical jargon, define consumers’ wants and the products that would be offered to them.
In the survey by GIA, 46 percent of companies said competing in the emerging markets was at the top of their list, followed by 38 percent that placed targeting new demographic groups as the main challenges they would face for 2011 and 2012.
For some companies, the challenge to determine how to profit from the new trend will be great. For those that take smart action now, the opportunities to prosper in one of the world’s fastest-growing markets are immense.
Look, read, hear them out
The ‘Asian Lifestyle Trends Study’ conducted by Symrise, a leading global flavor and fragrance manufacturer, identified four groups of consumers as a basis for flavor creation. These categories are status climbing, eco-chic, sensual explosion and hybrid (heart) culture.
With consumers in Asia becoming more affluent, they want to be spotted in great places and be the first to try top-notch gourmet cuisine. They want to be associated with status and luxurious brand names. Another pool of consumers associate their products with sensuality such as spices and chocolates.
Hybrid heart culture encapsulates consumers’ traditional beliefs and traditional practices in the new age. Last but not least, consumers in Asia who want to feel like they are contributing to society at large and want to be recognized for it, fall into the eco-chic category. They source for organic foods and green labels.
While health-conscious consumers are looking to eat healthy, they want their food to have indulgent flavors as well. They no longer want to just have cardboard-tasting cereal just because it gives them the perception that healthy food is supposed to taste that way. They want cereal with a walnut flavor but still low in calories and save to consume because it does not harm the environment.
Among these four lifestyle trends, it was found that consumers in the Philippines were ranked in accordance to status climbing, sensual explosion, eco-chic and finally hybrid heart culture. Just knowing which category Filipino consumers fall into is the first step. Food manufacturers who cater to the Philippine market will also have to understand the taste demands that fall into these categories. So just where do food manufacturers start?
With consumers’ tastes evolving, there is no one flavor that suits a particular consumer group. Flavors are cross-functional and the level of intensity of the taste can vary with different groups of consumers. For example, a coffee flavor can appeal across all four consumer categories but how strong or light the coffee flavor is could vary. Additional flavors can be added to stimulate the unmet needs of consumers. Consumers who fall into the status climbing category may want their coffee richly flavored with soy milk and consumers in the hybrid culture category may like their coffee light tasting with a dash of raspberry flavor. Flavor creation is a reflection of unmet needs of consumers, which opens up avenues for food manufacturers to tap on to.
All about customization
Companies need to adapt their products to the local Filipino tastes, preferences, requirements and constraints. In many cases, customization means changing the flavor of a product to cater to local habits. For example, some Filipinos like their food a little sweeter like sugar in chicken barbecue or sweet-tasting coconut vinegar.
The challenge is to move away from the ‘one size fits all’ concept of production and focus on the tastes that appeal to different demographics. For example, a pulpy orange juice may suit the taste buds of the Gen Y population but a tangy carbonated orange juice would suit that of the baby boomers. It is all about making the consumer feel like the product, in this case orange juice, was made just for them.
Companies spend a fortune to develop a product, investing in research, manufacturing and marketing before it hits the stores. Sometimes, to their dismay, the products are left on the shelves to collect dust.
Rework the goods
A product that looks aesthetically appealing may contain some missing links hindering its popularity among consumers in Asia. How do you determine the missing links? Where do you make those changes? Who do you target once those changes are made? There are frameworks in place to show manufacturers visually where their products currently stand and where they could potentially be to gain maximum return on investment.
These frameworks conduct the background research to determine the service gaps in the product. Once renewed and modified, the product is tested in small batches before it swings into full throttle in supermarkets.
Message it right
Innovation occasionally has more to do with the image or the message delivered. An example would be Kit Kat’s “Have a break, have a Kit Kat” slogan. The interpretation given to the slogan in the television advertisements is completely different in each country. In Argentina, they use elements from a popular local joke that would probably be banned or considered completely inappropriate in many other countries. As a result, Kit Kat enjoys very strong positioning in Argentina’s confectionery market.
In other cases, innovation might mean changing the format of a product. An inspiring example is Philippines’ manufacturer Lamoiyan when they launched a variety of toothpaste to cater to the Filipinos, making toothpaste affordable for a completely new and very large demographic group. With this simple but extremely clever innovative format, Lamoiyan positioned its Hapee brand way ahead of other toothpaste manufacturers in the market.
Conclusion
Consumers’ tastes in the Philippines are affected by a plethora of factors such as the economy, lifestyle and social interactions just to name a few. In order for food manufacturers to keep up and capitalize on these opportunities, it is imperative that they listen to what their consumers are demanding flavorfully.
Flavor innovation, together with the right message and aesthetic appeal, can provide the impetus to boost a stagnating category, create interest in an emerging sector and even drive a successful market entry for new or existing manufacturers in the Philippines.
(The author is president of Symrise Asia Pacific Pte Ltd.)