Which food and beverage firm has the most impact in Asia Pacific?

Posted by Daniel Palmer on 6th May 2009

The latest Asia-Pacific Food and Beverage Business Vitality Index, produced by market intelligence firm Global Intelligence Alliance Group (GIA), has seen consumer products giant Unilever come out on top.

The Anglo-Dutch company was the overall leader ahead of 20 leading food and beverage firms in the Asia Pacific region. The research looks into three dimensions: innovation, regional presence and revenue performance, to determine the potential impact of each business on the industry.

American giants PepsiCo and Kraft Foods came second and third, with a strong combination along all three dimensions. Among the Asian companies in the group, Taiwan’s Uni-President Enterprises leads the pack and New Zealand based diary manufacturer Fonterra follows close behind.

In terms of innovation, a crucial factor in the F&B industry, western-origin brands performed generally better than their Asian competitors, according to GIA. Unilever claimed the leading position for their efforts in appointing chefs and food experts in 18 key markets to research and develop new products customised to the local needs and preferences. Switzerland’s Nestlé came second in innovation, with its research and development (R&D) centers in China. In contrast, American cereal giants Kellogg Company and General Mills were found to struggle in this dimension.

The Index confirmed the trend among top performers in the F&B industry to customise their products to the local requirements, not only in terms of packaging but also in terms of taste and appearance. They have also been making strategic investments in the form of R&D centers and local manufacturing capabilities in the Asia Pacific region, particularly through the acquisition of local players.

“Strangely enough, Asian companies lack a strong record with regards to expansion in the region with the exception of Japanese Yakult Honsha,” Angela Quintero, Asia Pacific Practice head for Retail, Consumer Goods and Services at GIA, and author of the report, noted. “Despite a very strong presence in Asia, Yakult did not rank well in the index due to poor performance revenue-wise. A similar case was Coca-Cola, who shares the strongest geographic presence with other top players in the group, but only came fifth as revenue growth from its Asian business seems to be lagging. However, its diversification into the water and fruit juice business in China will boost revenue growth in the coming year.”

“Another largely present player in Asia, Cadbury Schweppes, has yet to improve on innovation and will start coming higher on the list.”

GIA predicts that Campbell Soup will rank high in the next GIA Asia Pacific Business Vitality Index (F&B), due to its recent efforts in customising products to the local markets and geographical expansion. In a similar way, Danone should be able to leverage its recent investment activities in Japan, Thailand, China, India and Vietnam and come back as a strong performer in the region soon.

Vitality Index scores (worldwide revenue position compared to competition in brackets)

  1. Unilever 318 (2)
  2. PepsiCo 302 (3)
  3. Kraft Foods 300 (4)
  4. Nestlé 264 (1)
  5. Coca-Cola 263 (5)
  6. Cadbury Schweppes 233 (8)
  7. Uni-President Enterprises 229 (11)
  8. General Mills 224 (7)
  9. Fonterra 222 (12)
  10. Campbell Soup 222 (13)
  11. Ting Hsin International 216 (17)
  12. Arla Foods 208 (10)
  13. Groupe Danone 200 (6)
  14. Yakult Honsh 196 (18)
  15. Del Monte 190 (16)
  16. Kellogg Company 176 (9)
  17. Nissin Food Products 163 (15)
  18. Kagome 160 (19)
  19. Lotte Confectionery 148 (20)
  20. Meiji Seika Kaisha 115 (14)