Power Up!

Marketers are doing well in the nutrition sector in creating consumer awareness for healthful products. With the rise of sporting events such as triathlons and the mushrooming of fitness centers in Asia, the physical department is fueling products that provide active consumers the boost, vitality and strength to be effective in their sport. Antje Schoeder, director of sales and marketing - Asia Pacific, BENEO-Palatinit Asia Pacific tells us more.

Global marketing at sports events such as the Olympics plays a major role. Such events provide the ideal platform for companies to promote global brands.

AFJ: How is the sports F&B product category thriving in Asia?
Schoeder: The category, including sports and energy drinks, sports nutrition and energy snacks, is experiencing robust product development. Companies are interested in using new ingredients and consumers are willing to try new products, even at a premium. Like consumers from the West, Asians like to consider themselves as sporty and health-conscious, even if their sport is limited to watching football on television channels or exercising at fitness centers occasionally. They opt for healthier food options such as diet/sugarfree soft drinks, and functional waters such as sports and energy drinks that help replenish fluids, carbohydrates and minerals after exercise.

Sports drinks are often considered as healthier beverages than soft drinks as they contain less sugar. F&N’s 100 Plus beverage for example contains 6.8% sugar compared to Coke or Sprite that has almost twice as much sugar, thus carrying the “healthier choice” label in Singapore.

Energy drinks are popular for providing “mental” energy to consumers who need to stay awake or alert longer. According to a Euromonitor International report, Asia Pacific is the second largest market for functional drinks behind North America, registering 30% volume and 26% value in 2006.

However, growth in Asia Pacific has been low at 3% compound annual growth rate (CAGR) by volume between 2001 and 2006. This is eight percentage points behind the global CAGR. This is due to declining volume sales in Japan, which is the second largest country market for functional drinks globally, South Korea and Taiwan.

The report also states that competition from other healthier soft drinks, particularly sugar-free ready-to-drink (RTD) tea and mineral water products that offer a greater range of product flavors and improved product quality, and weak product positioning have led to sports drinks companies operating in a narrowly defined market. They have also been unable to redefine these products to meet changing consumer demand.

Antje Schoeder, director of sales and marketing - Asia Pacific, BENEO-Palatinit Asia Pacific.

AFJ: What are manufacturers concerned about when it comes to product formulation?
Schoeder: Sports drinks manufacturers are challenged to find the right balance between attractive concepts with performance ingredients. There is always the discussion about the minimum dosage level that will justify a hard claim like “prolonged energy”.

While the R&D team understands that a certain amount of an “active” ingredient is needed to have a measurable effect, the marketing team tends to ignore this when little support is given. As a consequence, many products in the market would not stand any test from the authorities as the claims are backed by low amounts of functional ingredients.

To be credible, manufacturers need to work with dedicated ingredient specialists that can advise on addressing regulatory, formulations and marketing claims for successful product developments.

There are two categories of performance ingredients: stimulants such as caffeine and taurin, and ingredients that provide fuel to the body and the brain.

AFJ: How is performance and powder products infi ltrating into RTD beverages for non-sports people?
Schoeder: Performance can be defi ned as physical or mental. Nonsports people need performance ingredients for their daily activities. Like digestive health, performance attracts all levels of consumers. It is an interesting and sellable concept because performance is a benefit that can be felt almost immediately. And for a product manufacturer, delivering a promise is a huge marketing advantage.

Manufacturers have the opportunity to open the "performance" concept to different applications/categories, thus infi ltrating the RTD category that conveniently addresses our busy lifestyle. Besides RTD products, there are other product applications such as granola bars, cereals and biscuits.

With more educated consumers, manufacturers should look at offering healthier energy products with the choice of ingredients used. There are two categories of performance ingredients: stimulants such as caffeine and taurin, and ingredients that provide fuel to the body and the brain such as maltodextin (fast energy) or Palatinose (prolonged energy) that help to get either the “quick kick” (maltodextin or glucose/dextrose) or the “long lasting energy” that a slow-digestible sugar can provide.

Chart 1: Sports drinks brands in Southeast Asia (million liters).

AFJ: In your view, how are Asian manufacturers successful in tapping into the sports product category?
Schoeder: Global marketing at sports events such as the Olympic plays a major role. Such events provide the ideal platform for companies to promote global brands. The local/regional companies however have difficulty measuring up to the advertising spending, and thus struggle to grow beyond their home market.

However, there is an increased in new product launches in the sports category in countries such as the Philippines, where local manufacturers are successful in their home markets. From Chart 1, Japanese brand Pocari Sweat is the most successful company in Southeast Asia, registering strong grown outside Japan and in Indonesia last year. Singapore’s F&N 100Plus beverage is enjoying much success, while global brands Gatorade (Coke) and Powerade (Pepsi) struggle to catch up in this region.