ASIA May 2020
 
The Winners & The Losers during COVID-19 pandemic
 
The food and beverages industry in Asia is probably one of the most resilient industry, with consumers continue to demand for food and beverages during the ongoing pandemic.
Excluding the food services sector, which is badly affected by lockdowns in many major Asian cities, the rest of the food industry seem to be doing just fine. The pandemic has unfortunately curtailed dine-in activities and limit food service businesses only for takeaways and online deliveries.
In April, AFBR had done a mini survey of 10 major players in the food and beverages industry in ASEAN to find out what they consider to be the best and worst performers in the food and beverages industry during the 1st quarter of 2020.
To some food and beverage products, of which a big chunk of their sales revenue are generated through on-trade channels, the extended lockdown had certainly affected their sales during the 1st quarter.
The following are our findings based on the survey ranking of the Top 5 best performers and the Top 5 worst performers (i.e. sectors) in Asia. Please note the % sales growth or decline represent just an estimated net sales movement from the last 4th quarter 2019.
Based on the survey, it was almost unanimous that essential food products and instant noodles seem to be the star performers in the food industry, whereas premium liquors like beers and wines took a major blow in sales as consumption is restricted to at home while drinking in bars and cafes are not available during lockdowns. Not only that, some countries in Asia had introduced laws to ban liquor consumption during the current state of emergency, whereas some have introduced more stricter laws on drinking in public.
In addition, drinks like coffee and tea are also partly affected as quite a big part of sales came from coffee chains and tea parlors which remain closed during the lockdown. The same case applies to carbonated drinks where on-trade sales represent quite a substantial portion of overall sales. Furthermore, consumers over the past few years had already been shunning soft drinks particularly carbonated sugary drinks which are often regarded as 'unhealthy'. Consumers seem to dedicate a big portion of their budget to essentials, instant noodles, frozen and canned food which have longer shelf-lives. Panicky buyers hoarded some food products excessively with a view that the future will be more bleak than the present. Although 'hoarding' has more or less tapered off by 2nd quarter 2020, consumers are still buying more products than what they usually bought last year.
Meanwhile, other food products like bakery, snacks, fresh food (fruits/vegetables/meat) and non-sugary confectionery products fell somewhere in the middle ranking with sales maintaining a relatively steady single growth or remain neutral. Manufacturers surveyed are also optimistic over the future long-term growth of plant-based meat and dairy products in Asia, and not just its short term growth during this pandemic period. Based on the survey, plant-based meat/dairy products are estimated to have a 8-10% growth over the 1st quarter 2020.
 
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