Market insights

Asia’s growing appetite for breakfast snacks

14 January 2016 by Cheryl Faith Wee

Leisurely breakfasts are becoming history in Asia’s rapidly-modernising developing countries. More than half of all consumers in the region now seek convenient breakfast alternatives that can be eaten on-the-go or in the office, according to market research firm Nielsen’s 2014 global report about snacking.

“Hectic lifestyles are a major cause of this trend”, observed Professor Gemma Calvert, the director for Research and Development at the Institute on Asian Consumer Insight in Singapore. “More women in Asia Pacific are entering the workforce and the need to juggle domestic responsibilities and their careers means they might turn to snacks as an alternative to breakfast at home”.

In addition, urbanisation and the resulting traffic snarls contribute to the preference for grab-and-go breakfasts. “In some major cities in Asia, the increase in car ownership meant that traffic has deteriorated and consumers are facing even longer commute times, making the consumption of breakfast on-the-go more necessary,” said Prof Calvert.

Jumping on the breakfast bandwagon

As a result of this “breakfast snackification” trend, Asia Pacific’s snack industry is expected to grow faster over the next few years than anywhere else in the world. According to Nielsen, US$46 billion worth of snacks were sold in Asia Pacific between March 2013 and March 2014, four percent higher than in the preceding year. In contrast, sales had remained flat in Europe and grown just two percent in North America over the same period. Within Asia, China and India are among the fastest growing markets in the world for biscuits and snack bars – which include breakfast muesli and granola bars – according to a 2015 report by market research firm Euromonitor International.

More food corporations are also jumping on the breakfast bandwagon. Britannia Industries, a major bakery and dairy products manufacturer in India with well-known labels such as Tiger, has introduced new breakfast items - including oats and porridge - in India.

According to a Kellogg’s spokesman, new breakfast categories such as grain-based drinks and smoothies have also emerged. Even cereal is increasingly eaten as a snack, prompting Kellogg’s to launch cereals in mini packs. In Indonesia, a third of cereal consumers prefer to have it as a snack, without any milk.

Said a Kellogg’s spokesman: “Traditional Asian foods still dominate, typically accounting for 80 percent of all breakfast occasions. However, the newer foods that have begun making big inroads are breakfast cereal, cereal bars, snack bars, yoghurt and fortified bread.” 

Convenience food with a healthy touch

To cater to the growing appetite for breakfast snacks in Asia, manufacturers and retailers are rolling out breakfast alternatives that are not only convenient but also healthy.

Global snack company Mondelez International launched belVita breakfast biscuits in China this year. Said Stephen Maher, President of Mondelēz China, in a press release: "As more Chinese are shifting to modern breakfast options, we believe belVita breakfast biscuits offer a compelling benefit — nutrition, taste and convenience, delivering vitality throughout the morning."

Indeed, nutritional value is a key selling point to consumers. "Consumers in both developed and emerging markets are increasingly concerned about health and nutrition for themselves and their families,” said Mark Clouse, Chief Commercial Officer of Mondelez International in a press release. The growing worldwide demand for healthy food is partly due to factors like rising affluence in developing countries, according to Nielsen’s 2014 global report about snacking.

In Singapore, supermarket chain FairPrice has seen sales of its cereal bars, granola bars and muesli bars grow by over five percent in the last two years. New flavours that incorporate various healthy components such as yoghurt, cranberries and almonds have been introduced over the years to match changing consumer preferences, said Mui-Kok Kah Wei, FairPrice’s Senior Director for Purchasing and Merchandising.

To meet the needs of health-conscious customers, convenience store chain 7-Eleven in Singapore plans to introduce new types of sandwiches made with wholemeal bread in 2016. Sales of sandwiches by the chain, which has been expanding its range of breakfast snacks in its Singapore outlets, has shot up nearly 50 percent over the past two years.

Racing for the breakfast crowd  

Competition for the breakfast crowd has heated up, with fast food chains and other players vying for a bigger slice of the pie. While this has been especially intense in the West, according to media such as CNBC and Bloomberg, global chains are also rapidly expanding into Asia, hinting at growing competition in the region’s breakfast market.

Over the past few years, donut store chain Dunkin’ Donuts has been expanding rapidly in Asia, selling donuts in countries such as Korea, Japan and China. It has also been boosting marketing efforts to increase its breakfast revenue, such as through mobile app discounts.

Catering to Asian tastes

One way companies are trying to get a leg up is by matching local cultural preferences. Simone Hoyle, Head of Asia for McDonald’s Foundational Markets, said the fast food chain had launched items such as twisty pasta soup in Hong Kong, cheese and egg served in a Filipino-style bread roll in the Philippines and wholegrain muffins in various markets including Singapore. Such products are very popular and are selling well, added Simone.  

“Asians tend to prefer breakfast snacks that are softer, more savoury and energy-boosting than their Western counterparts”, said Prof Calvert from the Institute on Asian Consumer Insights. “Companies who are able to tap into these long-established and culturally defined sensory preferences in Asia and who can provide on-the-go alternatives may well succeed in seeing high return on investment in this sector.”

Edited by Liew Hanqing and Jocelyn Lim