5.1.1 Definition of the Industry
Food and Beverage
(F&B) is an industrial term which is used to define the companies that is involved
in producing, manufacturing and processing raw food materials into forms of
food and beverage. This includes fresh, prepared foods as well as packaged
foods, and alcoholic and non-alcoholic beverages. Any product meant for human
consumption, aside from pharmaceuticals, passed through this industry. F&B
companies are also involved in distributing the finished food products or the
near-finished food products in to the hands of distributors or directly to the
consumers.
5.1.2 Shape of the Industry
Malaysia’s has a
very diverse food industry just like the multi-cultures of Malaysia, with a
wide range of processed food with Asian tastes. According to the Malaysian
Investment Development Authority (MIDA), the present global retail sales in
food products is estimated to be worth around US$3.5 trillion, and by 2020, it
is expected to grow at an annual rate of 4.8 per cent to US$6.4 trillion.
Malaysia is a net importer of food. However, Malaysia’s food exports amounted
to RM18.2 billion in 2010 while imports totaled RM30.3 billion.
According to a
global report done by ACNielsen, What’s
Hot around the Globe –Insights on Growth in Food & Beverage Products,
health, freshness, convenience and value are the main reasons that drive
consumers purchasing. The demand for healthier or harmless food and beverage
products are rising because consumers are more aware in the nutrition value and
food fortification for healthcare. People are now living in fast paced live so
they want something that had an element of convenience but at the same time are
high in quality.
The shape of the
bubble tea industry in Malaysia is in the growing stage. Nowadays consumers
have a very meticulous taste and at the same time concerned about their health.
Consumers tend to find products that are higher in quality to satisfy
themselves. Consumers are also concern about the sugar intake, calories and is
there any use of artificial ingredient in their drinks. Hence, many bubble tea
companies had replace the used of artificial milk powder with fresh tea leaves
and juices to fulfill the consumers’ demand. Due to the high demand from
consumers, the market sales of the product are increasing too. According to The
Stars, a bubble tea outlet located in the Gardens Mall can sell more than 1200
cups on any given day.
5.1.3 Development of the
Industry
Bubble Tea,
originally from Taiwan, first arrived in Malaysia in the early 2000s and
successfully caught everybody’s attention and became a hot trend in Malaysia.
But back at that time, bubble tea was an unhealthy mix of sugar and colored
additives and people stand losing interest in it. People found out that
although bubble tea is a tea-based beverage, but a 16-oz cup of bubble tea
contain up to 360 calories. So at one point, the demand just died off and
bubble tea was relegated to a once-in-a-blue-moon beverage which is something
you enjoyed if it happened to be available around the corner.
In 2011, the bubble
tea is making a comeback in a big way. The emergence of bubble tea franchises
from Taiwan in Malaysia has sparked the trend that brought back the seemed to
be dead beverage. The difference today compared to years ago is that these
bubble tea brands market their brand heavily via exclusive branding and
selecting suitable locations and with the help of social media and word of
mouth. These days, bubble tea seems to be upgraded as back in the 2000s, bubble
tea was only sold at night markets but now bubble tea can be found in shopping
complexes. Now, bubble tea use freshly brewed tea instead of powder formula and
with machines that let the consumers customize drinks to suit their health
concerns, bubble tea has become more health-oriented. Price is also one factor
contributing in the bubble tea trend as it is more affordable.
The bubble tea craze
does not go smoothly as the Health Ministry claim that selected
Taiwanese-imported bubble tea syrups were tainted with the Carcinogen
Diethylhexyl Phthalate (DEHP). The local operators have since been cleared of
such claims after the examination had been done and the crowd is back and
gotten bigger.
5.2 Marketplace
5.2.1 Current Condition of the
Marketplace
The market of bubble
tea product is currently in an intensive competition as there are a lot of
different brands in the market from new to old competing against each other
directly and indirectly. The traditional bubble tea that still uses powder
formula is slowly being eliminated as the major bubble tea chains are using
freshly brewed tea leaves that are much more authentic and healthier.
Previously, there is
only one major brand of bubble tea in Malaysia which is Yippee Cup which has
been around since 2003. The industry grew tremendously in recent years with the
arrival of international chains Chatime, Gong Cha, Each-a-Cup, Ochado and etc to
the marketplace making the competition much more intense.
To make the brand
stand out from the competitors, bubble tea chains have to be more creative in
promotions and in the product itself. Each bubble tea chain has their own
signature drink, for example Chatime has Chatime Uji Matcha while Gong Cha has
Gong Cha Signature Green Tea and white pearl.
5.2.2 Change is Marketplace
Positive
More competition in the market leads to
more effort in producing product with higher quality thus boosting the growth
of the industry.
Negative
More competition in the market leads to
more money spent in promotion and advertising causing loss in revenue.
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