Untapped or tapped out?
Southeast Asia Beverage Sector Outlook
Southeast Asia is at an inflection point. The region will soon be home to one of the world's largest middle-class populations, whose rising domestic consumption and increasing appetites for simple affordable luxuries provide great opportunities for consumer business companies.
This potential has not escaped the attention of the world’s leading beverage companies and recent years have seen significant investments in the region, both in the alcoholic and non-alcoholic segments. The rush of multinationals into Myanmar, the heated battle over stakeholdings between Asia Pacific Breweries and Fraser & Neave, aggressive expansion by regional conglomerate Thai Beverage, and entry into the region by global heavyweights Anheuser- Busch InBev, Coca-Cola FEMSA and Heineken are just some of the recent high-profile examples of players scrambling to take advantage of this potential. The competition is expected to continue to intensify as these giants battle it out for market share.
Despite the activity from these heavy-hitters, the region is far from being tapped out: opportunities still exist for those willing to invest the necessary time and effort. Large segments of the market are still underserved, particularly those catering to women, ‘masstige’ products, and healthier alternatives. The opportune moment to strike is now, as these gaps are not likely to last for much longer.
The industry is on the precipice of change. Scale, route to market and distribution capabilities will be essential for success, as will the need to provide value for money offerings to cater to the emerging middle class. Beset by logistical challenges, natural disaster risks, paucity of market insight and significant diversity, Southeast Asia will prove to be a challenging market to serve. Those most able to adapt to and capture these opportunities stand to be well-rewarded.
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