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Interview with Luc Steenwelle

Source:Ringier Food

Date Published:2/14/2018 07:02:54 PM

FrieslandCampina recently launched rich foaming creamers on the market. In this interview, Luc Steenwelle, Product Group Manager, Beverages SEAP, shares the company’s strategy in the region.

RECENTLY, FrieslandCampina launched rich foaming creamers on the market. This product, featured in a previous magazine issue, was developed based on consumer surveys in Indonesia and the Philippines. We followed this up with an interview with Luc Steenwelle, Product Group Manager, Beverages SEAP, on the company’s strategy in the region.

What is your view of the Southeast Asia market today?

FrieslandCampina Kievit leads the market in Southeast Asia in creamers and foaming creamers for manufacturers of instant beverage mixes such as cappuccino, white coffee and matcha latte. This is reflected in the dynamic and fast-growing ingredients market on both macro and micro economic levels.

On a macro-economic level, Southeast Asia has an expanding middle class, with increased spending power resulting in strong consumer confidence. Especially the Southeast Asian millennial generation, which is a driving force behind the growing economies, shows strong consumer confidence thanks to growing affluence, rapid advances in technology and infrastructure, and increased access to education.

On a micro-economic level, we see two particular trends impacting the beverage ingredients market: the third wave of coffee and the coffee bar culture. Both trends showcase the constant urge from consumers for new concepts and innovations, and that’s something we proudly implement in our strategy. With many people now living busy urban lifestyles, the trend for convenience is also a big factor in Southeast Asia. ‘Instant’ has long been seen as the hero in this market, since it marries convenience with affordability. We strongly believe that our ingredients add a special touch to the experience by creating moments of indulgence.

What trends are influencing the way the company is developing its products for the SEA market?

The recent boom in the coffee market is projected to stay on the rise. Southeast Asia accounts for the biggest share in the growing global trend for instant coffee mixes, with the value of instant coffee mixes expected to increase by 37% by 2022. With this in mind, we have conducted extensive focus group discussions in Indonesia and the Philippines to gain insights into consumers’ underlying reasons for choosing instant coffee mixes.

When comparing instant versus out-of-home coffee experiences, focus group participants concluded that the advantages of instant coffee included practicality, convenience, affordability, and the standardised taste, which outweighed the disadvantages. However, respondents showed different attitudes to coffee with foam. Millennials in their twenties and thirties, who drink coffee for social purposes while meeting up with friends, see a foam layer as more of an indulgence. Older males in their forties and fifties, who are maybe more used to drinking coffee at work, would not choose adding a foam layer.

As the millennial audience grows and ages, we will continue to innovate foaming creamers that can be enjoyed at home, in the office, and on the go.

What are opportunities in the market you operate in?

The ever-changing nature of end-customers’ preferences is a main driver behind our strategies when developing new products.

The technologically wired millennial generation has a 24/7 available platform to express their opinions, and that offers great opportunities for targeted product development and marketing. Nielsen research from 2016 shows that these millennial consumers are keen to know the story behind the products they buy. They want to have a better understanding of how their food is produced and are willing to pay more for sustainable brands. We have anticipated these developments by offering clean label options and taking an extra step with the transparency of ingredients obtained from sustainable sources.

Today’s coffee bar culture is also driving demand for high quality coffee products with a premium look and feel. We are seeing increasing customer demand for innovative and premium foaming concepts, inspired by a growing out-of-home channel.

Finally, we are closely monitoring recent developments in sugar reduction, as stimulated by government regulations in response to growing obesity in Asia.

And the challenges?

Southeast Asia is a region with many differing local preferences, not only culturally, but also in terms of sensory preferences, such as the level of creaminess, milkiness or sweetness of the beverages our (foaming) creamers are used in. We invest a great deal of time and resource in conducting consumer studies so that we can better understand these preferences, with the end goal of better tailoring our products.

What advantages does the company have in ASEAN?

Having local production sites, R&D teams and Technical Sales teams in both Indonesia and the Philippines mean we can guarantee short lead-times, avoid import hassles, and guarantee quick response times. We take pride in our ongoing glocalization efforts, where we leverage the benefits of being part of a global multinational company without losing sight of the needs and developing behaviours of our local customers and consumers.

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