Inflation in Asia-Pacific and Advice for Brands
Learn more about the actions brands can take to support consumers during uncertain times
20 Oct 2022
Consumers in Asia-Pacific (APAC) are not overly concerned about the economic situation, yet.
For their part, brands can give warning of intended price rises, link price to value and focus on product quality (e.g., multiuse). Brands can be transparent with information proving the benefits of products or the reasons costs are rising to keep consumers informed.
Brands can also demonstrate how they are working for the common good of all, working to keep costs and prices down, maintaining quality to protect consumers, or standing up for good causes in the communities within which brands are active members.
Asia-Pacific is seeing inflation led by food prices. Harvests hit by poor weather in China, Thailand and India coupled with rising energy and fertiliser costs. Further energy price rises will further hike prices across a region that relies heavily on transportation to move foods, especially by sea.
The Impact on Consumer Behaviour
- Eating out is one of the first areas to be cut as consumers opt to stay home.
- Consumers are beginning to seek lower cost retailers, private labels, and frozen/canned food, as stockpiling becomes something to consider.
Figure 1. Dynata/Mintel, May 2022
How food brands can support their customers through the income squeeze
“There will be no ‘one-size-fits-all’ consumer reaction to inflation when it comes to food. Some will cut back on food service spend in favour of costeffective retail alternatives, e.g., swapping their takeaway coffee for a cheaper at-home version. Others will limit the number of purchases per week. When times are tough, food is a source of comfort.
Consumers will continue to seek comfort food, even if they opt for a smaller pack, a cheaper brand or a fixed price.
Megan Stanton, Senior Analyst – Mintel Food & Drink1.
While price hikes may be inevitable, here are 6 ways brands can credibly signal price changes:
Be transparent when explaining price increases and offer ways for consumers to maximise their budgets, increase food ‘yield’ and reduce wastage.
Co-op (UK)2 has introduced a ‘freeze me’ label for its milk products to reduce food waste.
Connect the brand’s product proposition with non-product, social or purpose-based propositions.
Dairy brand Valio has partnered with mental health organisation MIELI fora social media campaign to encourage young people to talk about their mental health4.
Link price increases to a customer-centric value narrative.
McDonald’s Philippines introduced McSavers Mix and Match, which allows customers to customise their snack combo at a single price point of 75 Philippine pesos (approximately US$1.40)6.
Let consumers know about price rises well in advance.
Expensive ice cream drew loud consumer complaints on social media in China3.
Increase value perceptions. Emphasise design, aesthetics, functionality, social responsibility, exclusivity, or limited editions in addition to product.
In collaboration with some of the top cocktail bars in Kuala Lumpur, The Ice Cream Bar has launched a series of cocktail-inspired ice creams, served in a can, for an unconventional twist5.
Multi-use products, so consumers will only need to buy one product to cover different needs, may increase in demand.
Farmers Union has combined Greek Yoghurt texture benefits with probiotic functionality to offer shoppers a dual proposition item7.
Survival Skills to Thrive
The rising cost of living may cause consumers to reconsider what they can afford, what they’re willing to pay for, and what they can do themselves. New skills, obtained from the need for self-sufficiency and resilience, could turn into a source of strength, pride, and achievement. This could change how consumers perceive value.
Prepare for the Worst
Consumer caution can manifest as a reluctance to spend. Consumers may be worried about the rising costs of living without adequate preparation and not knowing what’s next. Brands can provide cost-effective alternatives that could offer a number of benefits, such as flexibility, financial savings and environmental benefits, to bring calm amidst worry.
Never Say Die
Use nostalgic elements to bring a sense of joy and comfort. Even for consumers too young to remember previous times, brands are exploring the culture and attitudes of the past from the library of the internet as a source of fun and escape for consumers seeking distractions from the present. No longer limited by time period or geography, brands and individuals are taking inspiration and liberties from the past, modernising them and making them their own.
To read more, download this month's Perspective Publication below.
Regional Trends Director, Mintel Asia-Pacific
Matthew is the Regional Trends Director for Mintel Asia-Pacific. He was originally employed by Euromonitor to develop its then new series of reports on consumer product markets in China. Then, as co-founder of research company Access Asia, he worked exhaustively on trying to make sense of China’s consumer markets, which work has continued since Access Asia was successfully sold to Mintel Group in 2011. Matthew has written several hundred reports on China’s consumer markets over the course of nearly 30 years.
The views expressed above are the opinion of the author, not those of Fonterra, and Fonterra is not responsible for any decisions taken in reliance on the same.
- 1. Matthew Crabbe. (2022). The impact of inflation on APAC consumers: 2022- 23. Mintel. https://clients.mintel.com/content/trend/the-impact-of-inflationon- apac-consumers-2022-23
- 2. Mintel. (2022). Frozen Milk. https://reports.mintel.com/trends/#/ observation/1149381
- 3. Mintel. (2022). Ice Cream Assassin. https://reports.mintel.com/trends/#/ observation/1145171
- 4. Mintel. (2021). Bake and Chat. https://reports.mintel.com/trends/#/ observation/1113955
- 5. Mintel. (2021). Mixologists’ Ice Cream. https://reports.mintel.com/trends/#/ observation/1107061
- 6. Mintel. (2022). GNPD. https://clients.mintel.com/
- 7. https://www.marketingmag.com.au/featured/australian-greek-styleyoghurt- utilises-childish-obsession-in-its-latest-campaign/
- Figure 1. Dynata/Mintel, May 2022