Stay Ahead of Healthy Beverage Innovations In APAC With These 5 Insights

How APAC's biggest beverage makers are innovating to capture growing opportunities in the healthy drinks space.

July 11, 2023

Last week, your writer participated in the Healthy Beverage Innovation APAC event co-hosted by Food Navigator Asia and Nutraingredients Asia. During the webinar leaders from across the APAC beverage space presented about how the healthy drinks trend is evolving in the region and what opportunities lie ahead. In today’s newsletter, we’ll share 5 key takeaways we had from the event about healthy beverage innovation in APAC. BONUS: Get full access to the 30+ slide presentation we used during the Healthy Beverage Innovation APAC event, for free in the body of this article.

In Today’s Email:

  • 📰 In The News: Edible barcodes, a new Thai beer is born, cultivated chicken debuts on US menus, and more.

  • 📆 Unmissable Event: SKS Japan 2023 | July 27th - 29th

  • 🚀 Innovation Deep Dive: 5 Experts Reveal All About Healthy Beverage Innovation In APAC

    • 1. Functional Drinks Opportunities In APAC: A Market Overview of India, Indonesia, and Japan (includes 30+ slides with exclusive market insights)

    • 2. Remedy Drinks Reveals How to Build a Global Kombucha Brand

    • 3. Morinaga Milk On Their Postbiotic Innovation: LAC-Shield

    • 4. How Asahi Uses Lactic Acid Bacteria to Innovate Healthier Beverages

    • 5. Less Sugar, More Innovation - How Dole Is Building A Healthier Product Portfolio

📰 In The News

A curation of our favorite F&B innovation stories from the week. Can be read in less than a 🧻 break.

📆 Unmissable Event: SKS Japan 2023 | July 27 ~ 29

🔔 Do you want to take part in this year’s foremost food-tech event in Japan?

Then join us at the SKS Japan Global FoodTech Summit 2023, your gateway to the future of food! 

🚀 Launched in 2017 as Japan's edition of the global food tech summit, SKS has consistently been a melting pot of food innovators from all over the world. SKS Japan explores the theme of “Food X Technology & Science”, inviting industry leaders to embark on a journey, envisioning the food industry's future across the globe. During the event, you’ll discuss the blueprint for an ideal global food system, the essence of diverse values around food, and the importance of building business through co-creation.

🤩 SKS Japan is a three-day event. As an attendee, you’ll be a part of enlightening sessions by thought leaders from diverse fields, explore exhibitions from industry giants and promising startups, engage in roundtable discussions, and network with fellow leaders.

🔓 The core theme of SKS Japan 2023 is UNLOCK, and that’s what the event is all about. Unlocking - the innovation in products and services, the potential in individuals and professionals, and the global presence of Japan's rich food culture.

🤝 Whether you join us at the venue or tune in online, you'll be at the heart of the latest food tech trends, products, and services. Don't miss this opportunity to connect with key players and exchange ideas to forge future collaborations.

Market Shake and GourmetPro are partners of SKS Japan 2023. We will be bringing you exclusive updates, before, during, and after the event. Stay tuned 👀

🚀 Innovation Deep Dive: 5 Experts Reveal All About Healthy Beverage Innovation In APAC

Weekly deep dive into an F&B trend. Can be read in less than a 🚋 ride.

Last week, on July 5th, your writer joined the Healthy Beverage Innovation APAC event hosted by Food Navigator Asia and Nutraingredients Asia. During the event, five industry experts from major companies like Asahi, Dole, Remedy Drinks, and more shared their experiences and perspective on the rapidly evolving market for healthy beverages in APAC. Here’s five key takeaways from the presentations.

1. Functional Drinks Opportunities In APAC: A Market Overview of India, Indonesia, and Japan

During the event, your writer introduced exciting opportunities in three of APAC’s most exciting markets: India, Indonesia, and Japan. India and Indonesia, poised to be significant global players by decades end, hold immense growth potential in emerging functional beverage sectors. Check out the opportunities in these markets identified by GourmetPro’s local experts.

Japan, with a population of 125.7 million, is an advanced functional drinks market worth over 5 billion USD. Despite the small size, it's dominated by legacy categories like soft drinks, yogurt drinks, sports drinks, energy drinks, and water. These categories continuously innovate to provide added health benefits, mainly targeting immunity, gut health, and energy.

Major brands like Suntory, Asahi, Kirin, Morinaga, and Coca-Cola command the landscape. While there's potential for disruption, the top five are challenging to compete with. However, the nootropic/relaxation drink and hydration sectors present opportunities.

Coca-Cola's Chill Out drink has seen success (seeing 25% sales growth in the last year), prompting Suntory to launch their own relaxation beverage, Chilling. With increasing awareness of stress-related health risks and demanding work schedules, this sector provides growth opportunities in Japan for innovative brands.

As COVID-19 restrictions ease, consumers seek beverages to support active lifestyles. Kirin has recently innovated within this sector, launching iMuse beverages with proprietary ingredients focusing on hydration. Companies can leverage opportunities by fortifying products with electrolytes and other nutrients aiding hydration.

Understanding Japan's landscape and regulations is crucial for success. Regulations require careful attention, and the fragmented distribution necessitates the identification of suitable channels for your product. E-commerce offers testing opportunities before committing to full-scale product launch investments.

Download The Full Overview of Functional Drinks Opportunities in India, Indonesia, and Japan

Just for our Market Shake subscribers, we’ve included full access to the presentation we used during the Healthy Beverage Innovation APAC event, for free. Access over 30 slides of insights here:

2. Remedy Drinks Reveals How to Build a Global Kombucha Brand

Remedy Drinks, a global leader in kombucha, successfully established itself in 20 markets despite low initial awareness about kombucha. According to Marketing Manager Rachel Lees, their growth is attributed to a threefold strategy.

Firstly, Remedy customizes its approach to each market based on the local kombucha industry's maturity. For example, when launching in 2012 in Australia, where kombucha was in its infancy, the founders Sarah and Emmet Condon targeted early adopters, distributing to health-conscious cafes and upscale grocers.

Investing in education was key to their expansion beyond early adopters. Providing product samples and spreading awareness about kombucha's health benefits remains essential in all markets.

Product diversification allowed Remedy to engage a wider consumer base. Beyond their flagship kombucha, the company introduced soda, energy drinks, and nutri-shots - all sugar-free, functional, and flavorful, attracting consumers who might not prefer kombucha.

Being a zero-sugar beverage gives Remedy a competitive edge. It doesn't risk re-fermentation, allowing versatile storage and expanded distribution opportunities. Able to be stored in temperate and chilled, it can be placed at multiple points around a store, further boosting its visibility.

Research affirms low/zero-sugar drinks are highly sought-after in the Asia-Pacific region. Consequently, Remedy has noticed a trend of consumers substituting soda with healthier kombucha.

Despite varying maturity levels of the kombucha market across Asia-Pacific, Remedy continues to grow its brand by taking a local approach to each market and adapting its successful playbook from Australia.

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3. Morinaga Milk On their Postbiotic Innovation: LAC-Shield

Dr. Chyn Boon Wong of Morinaga Milk presented the company's groundbreaking research and product development in postbiotics, a novel ingredient in the food and beverage industry officially defined in 2019. Despite their recency, postbiotic-containing products have seen an 85% surge since 2018, highlighting their potential for healthy beverages.

Morinaga Milk's strength in probiotics, especially bifidobacteria, has paved the way for its leadership in postbiotic development. Probiotics consist of living microorganisms, while postbiotics are non-living, although still effective. In 2019 Morinaga launched LAC-Shield, a postbiotic ingredient fulfilling the increasing demand of APAC consumers for products promoting gut and immune health.

LAC-Shield has found use in over 1000 products in Japan, including water, energy drinks, juice, and protein powders, while also featuring in international products like nutritional drinks, tea, and plant milks. Scientific studies support LAC-Shield's ability to enhance immune health, mood, and combat age-related immunity decline, even reducing cold instances while fostering mood stability in cold-prone consumers.

The rising global trend towards proactive and preventative immune health provides a promising landscape for the functional beverage sector, with postbiotics like LAC-Shield likely to fuel this growth. Morinaga Milk's advanced research puts it in a prime position to capitalize on the increasing demand as many APAC markets mature in the upcoming decade.

Like what you’re reading?

4. How Asahi Uses Lactic Acid Bacteria to Innovate Healthier Beverages

Tomoniri Sugawara from Asahi Quality and Innovations highlighted Asahi's health innovations utilizing lactic acid bacteria. With over a century of research, Asahi has created a comprehensive library of lactic acid bacteria strains offering diverse health benefits, used in popular products like Calpis.

Asahi's innovative work includes using inactive lactic acid bacteria, distinct from pre and probiotics, which contain live microbes. Parabiotics and postbiotics feature inactive microbes that still provide health benefits. These bacteria can be sterilized, stored at room temperature, and minimally impact product flavor as they don't produce acid.

Amid the recent surge in functional beverage demand, Asahi leverages their lactic acid bacteria expertise to foster growth. In Japan, favorable regulations, a health-focused consumer mindset post-COVID-19, and growing demand for products enhancing gut health, immunity, and weight-loss drive functional drink consumption.

To meet demand, Asahi has launched a range of yogurt drinks like the L-92 Yoghurt drink with Lactobacillus Acidophilus L-92, the first Japanese beverage with dual health claims: maintaining immune function and reducing nasal discomfort. The CP2305 Yoghurt drink, containing heat-inactivated Lactobacillus Gasseri CP2305 cells, improves sleep quality by alleviating stress while also supporting gut health.

5. Less Sugar, More Innovation - How Dole Is Building A Healthier Product Portfolio

Dole Sunshine Company is one of the world’s largest producers of fruit juice products. From its lofty spot at the top of the fruit chain, it is ideally positioned to observe trends transforming the beverage industry. Equally, Dole must contend with the challenge of meeting the surge in consumer demand for low/ zero-sugar drinks. Aashim Malhotra, Vice President and Managing Director of Dole APAC shared his insights about both topics.

Functional drinks are becoming common across the global beverage landscape, and this trend is set to grow according to Aashim. In particular, there is a clear shift towards good-for-you, healthier products.

In line with this Dole has pledged to eliminate processed sugar from its entire portfolio by 2025. As of 2022, the company has eliminated processed sugar from 44% of its lineup, and it is positioned to hit its ambitious goal in the next two and a half years.

One of the biggest challenges to removing processed sugar is getting the chemistry right with the new formulation. When we consume food and drink, their flavor is imprinted on our tongues. This process is known as flavor retention, and it means that we as consumers are highly sensitive to even subtle changes in flavor.

We’ve had cases where it looks like we’ve nailed the same taste with an alternative natural sugar, only to have consumers contact us three months later to say the taste has changed. In these cases, we have to go back to the drawing board. It’s important to understand that it’s an interactive process and it takes time.

In addition to an iterative approach, Dole has also launched innovative drink lines that appeal to consumer demand for more functional drinks. For example, Dole is currently testing a line of Fruitify juices fortified with ingredients such as green tea extract in select markets. The company has also launched probiotic sodas recently in North America to meet the growing demand for products that are good for the gut.

However, Aashim reminds us that not all sugar-containing products are harmful, and the industry should help consumers comprehend the full nutritional benefits of fruit-based items. Dole combats oversimplified health ratings by providing additional nutritional details, like highlighting their orange juice as a "great source of vitamin C", to educate consumers.

That’s all folks

Thanks for reading today’s newsletter. A huge thank you to the Food Navigator team for the opportunity to speak at the Healthy Beverage Innovation APAC event.

See you next week as we explore emerging F&B trends in the China market.

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