Consumers in the Asia Pacific region consume quite a fair bit of seafood, especially fish. In fact, fish is the most popular protein region-wide and it held about a 31 percent share of total combined consumption of meat, fish and seafood in 2015, according to Euromonitor International. The preference for fish is particularly apparent for the Southeast Asian markets, with this share going even higher in countries such as Indonesia (65 percent), the Philippines (53 percent), and Malaysia (46 percent).
With the high consumption and preference of fish and seafood by consumers of the region, seafood product manufacturing is naturally a competitive market for product offerings, and more importantly, price.
According to Ms Lim, the increasing competition from manufacturers and suppliers within and beyond this region drives the selling price and margin even lower.
For one, today’s consumers are becoming more accepting of cheaper private label products. For the local and regional manufacturers, this is a major driver of price competition.
At the same time, however, consumers are also still willing to pay premium prices for what they perceive as ‘superior’ products, such as those by international brands that are seen as superior in quality, justifying their higher price positioning.
Therefore, seafood product manufacturers need to compete with not only cheaper offerings by some competitors, but also more premium offerings by others.
On top of this, they need also balance these with other financial challenges such as the increasing costs of raw material due to the growing shortage of fish supplies, rising production costs, increasing packaging costs, and also growing labour costs. These costs were especially worsened with the growing strength of the US currency and inflationary pressures.
To overcome these problems and maintain a steady position in the seafood product manufacturing market, manufacturers need to align themselves with the latest trends and consumer demands for fish and seafood products.
Southeast Asian consumers are trending towards busier lives as they migrate towards the urban areas and bigger cities, and become more career-oriented. Frozen processed food products that are easy to prepare and have longer storage lives would therefore be more appealing to such consumers.
Also, ready meals are another category that looks set to be a dynamic performer in terms of retail volume and current value growth. While this is partly because it is still emerging from a low base, says Ms Lim, the category is also ideally positioned to benefit from the growing demand for convenient and affordable meal solutions among young adults with busy lifestyles.
These products can include snack and ‘finger food’ product types such as frozen breaded fish fillets, fish fingers, fish balls, fish cakes and cuttlefish balls.
Furthering encouraging the growth of this category is the improvement in distribution of products from the industry to various markets today, that has made processed food a more affordable and accessible choice for consumers almost everywhere in Southeast Asia.
Health & Wellness
Health and wellness is one of the most influential trends when it comes to innovation in processed food today. With rising public awareness of the risk factors associated with non-communicable diseases such as obesity and heart disease, this has encouraged manufacturers to relook at and reformulate their current product offerings, as well as innovate new products that are low in ‘unhealthy’ ingredients such as fat, salt and sugar.
Manufacturers have also developed convenience foods that can use healthier preparation methods such as by boiling, steaming or grilling, rather than frying, that would appeal to consumers who are health-conscious yet want convenient solutions.
New Flavour And Product Variants
Expanding one’s flavour range would also be another way to secure a stable market position in the eyes of the consumers. To date, market players have focused on launching flavour variants based on traditional Asian recipes, which are particularly popular among older consumers.
Others have instead attempted to capitalise on the growing popularity of Western cuisine and flavours among the younger consumers—the Millenials—who have a reputation of being more willing to try ‘exotic’ and new flavours. These flavour variants may be based on popular dishes from Europe and the Americas.
Consumers are also becoming increasingly interested and demanding for more sophisticated and exotic product types such as shrimp wonton, crab shumai, and otah. This will help to sustain the positive development of this category from here and beyond.
Note: Thong Siek Food Industry will be one of more than 3,000 exhibitors present at Food&HotelAsia2016, held from 12-15 April, 2016, at the Singapore Expo.