Asia and emerging economies will be key consumer markets in next 5 years

Market researcher Canadean says that the impact of changes in consumer behaviour and industry practices in countries such as Thailand, Mexico and Egypt, and innovations from these countries that are transferred back to developed economies, will be worth up to $1.66 billion worldwide in 2018.

“Companies have already seen the value in setting up innovation centres in emerging economies to help tailor their products to consumer needs,”​ says Ronan Stafford, analyst at Canadean.

“However, innovations from emerging economies are now also transmitted back to developed countries.”​

Innovation​

Canadean finds that brands see the new markets in Latin America, Asia and Africa as a frontier for packaging innovation and exciting new ingredients.

“We increasingly see pack formats developed to keep costs low in emerging economies used to target austerity-minded consumers in Europe,”​ continues Stafford.

He also explains that a demand for ingredients from the Far East and Africa is boosting the ingredients and flavours markets as consumers become more aware of what is available, and demand such products.

"The more big brands invest in targeting consumers in Lagos, Jakarta and Hanoi, the better they will meet the value and experience-seeking needs of consumers in New York, London, Madrid and Sydney,"​ adds the analyst.

Adopters and targets​

There has also been an interesting trend coming from the emerging economies in the form of women aged 45 and over from low and middle income households in urban areas, becoming early adopters of innovation.

“The low incomes of many early adopters in the next emerging economies means that manufacturers need to simplify formulations,”​ says Stafford.

“This includes strategies such as using fewer ingredients to lower costs or investing in lightweight packaging that is still robust enough to withstand poor quality supply chains.”​

In addition to measuring the value of targeting early adopters in 2018, Canadean’s report evaluates the likelihood and impact on business practices of each scenario.

When all three dimensions are analysed, one scenario rises head and shoulders above the rest: The deep impact the next wave of emerging economies will have on consumer markets.

“These opportunities in the next emerging economies need to be targeted now, or companies will lag behind their competitors on not just opening up new markets, but in better meeting the needs of their current customers,”​ ends Stafford.