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Companies expanding into Asia must first understand local physiology

Post a commentBy RJ Whitehead , 26-Aug-2014
Last updated on 29-Aug-2014 at 11:30 GMT

Singapore is home to over 800 companies in food manufacturing segment
Singapore is home to over 800 companies in food manufacturing segment

Back when Europe and North America were there dominant growth markets for the food industry, Asia was considered as little more than an extension of their traditional business and dominated by unorganised local companies.

This was a time of great leaps in food research, but much of this science was designed for Caucasians with little reference to Asian physiology or tastes.

In the past they couldn’t be bothered [to develop foods for Asians] because they would just sell to Asia what they had designed for London consumers in New York,” said Associate Professor Tan Sze Wee, deputy executive director of the Biomedical Research Council at A*Star, the Singaporean government agency that is leading the country’s charge into food research.

Today, companies have highlighted their problems in getting closer to Asian consumers, but first they have to understand what constitutes an Asian person. The internationally recommended 2,000 calorie diet was based on Caucasian physiology; but for Asians, do we really need as many 2,000 calories?”

New research hub

So, because research was never done by Western food companies on Asian populations, companies are now at a loss about what to do for these new markets.

A*Star—an acronym for the Agency for Science, Technology and Research—was introduced to foster scientific research and talent to drive Singapore’s knowledge economy.

Its role has been to facilitate the research and development framework of Singapore, not just for food but for a wide range of industries, with 18 research institutes. It also serves as an intermediary between government and private companies.

Perhaps best known among the food companies in partnership with A*Star are Nestlé and Coca-Cola, which, although they have been established in Asia-Pacific for some time, have been pushed into learning more about the science and tastes behind the Asian consumer.

Different competitors

Traditional white, Anglo-Saxon companies are beginning to realise they now have to compete not only within themselves while operating in Asia, but they must also differentiate themselves—the Nestles from the Unilevers—and compete against local large and fast-growing companies like Fraser and Neave, CP Foods,” continued Tan.

That has been a catalyst that has resulted in a greater understanding by companies of their consumers—therefore highlighting the deficiencies in traditional, Caucasian-based science. So the growth and requirement for differentiation is one of the key changes between 10 years ago and today.”

A*Star’s approach is largely based on looking at the differences in human physiology based on ethnicity. 

We need to understand who we are; what differentiates Asians from Caucasians. Is there any difference between races? From that point, we can design food for ourselves.” 

This, Tan said, is one of the reasons why New Zealand’s government formed a partnership with A*Star, as the country looks to grow business within what is a substantial market. 

Some big companies don’t know Asia very well. They design their products for North America, so Singapore is a good partner for them to ideate, customise and repackage products and services for the Asian market.

Consumer markets have changed, with the rise of the Asian market and the growth of Asian middle-classes, there are completely new growth opportunities for Western multinationals in Asia who understand the market.

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