SINGAPORE -- Anticipating growing demand from Asia's expanding middle class and aging population, Swiss food giant Nestle is expanding its lineup of products aimed at health-conscious consumers.
The company has already teamed up with Singapore's Agency for Science, Technology and Research to study traditional Southeast Asian fermentation methods. The government agency is pitching in at the company's research base in Singapore, which employs 120 people and includes a factory that can be used to produce prototypes. Nestle hopes the findings can be used to develop a third pillar of healthy offerings to complement its confectionery and beverage lineups.
The world's No. 1 food maker selected the city-state because its diverse population -- consisting of Chinese, Malay, Indian and other races -- makes it an ideal place develop and test products for the Asian market.
One of the focuses at the research base is to study how various enzymes affect chemical reactions in foods. By simulating how foods are digested in the human body, the project aims to develop seasonings, foods and beverages that offer improved nutrition and more appealing flavors.
A big reason for Nestle's interest in Asia is the expansion of the region's middle class.
The number of consumers seeking higher-quality products is increasing in emerging Asian countries in pace with income growth, said Nestle Singapore Managing Director Valerio Nannini.
Figures by the United Nations show per-capita gross domestic product exceeded $3,000 in five of the 10 member countries of the Association of Southeast Asian Nations as of 2012. This is the income level at which the middle class is said to start growing sharply.
The Asian food market is becoming increasingly important, as it continues to expand at a robust pace, enabling Nestle to offset the sluggish consumption in Europe since the sovereign debt crisis.
The company generated 18.9 billion Swiss francs ($21.4 billion) in sales in the Asia-Pacific and African regions in 2013, topping the 15.6 billion Swiss francs in Europe. While that amount is still below the level in the Americas, the Asia-Pacific and African regions recorded 5.6% year-on-year sales growth, beating the growth rates in Europe and the Americas.
Another key factor behind Nestle's interest in Asia is the aging of its population, which is expected to lead to higher demand for healthy foods.
The UN forecasts people 65 years or older will make up 11% of the total population of Singapore in 2015. The figure is forecast to climb to 21% by 2030. In Thailand, the ratio is estimated to go up to 10% in 2015 and 20% in 2030.
Demand from the elderly, who tend to seek healthier foods, will grow in Asia, Nannini said.
Asia is the birthplace of many fermented foods, such as soy sauce and miso. According to Nannini, this is evidence that Asia, more so than other regions, embraces a philosophy that closely links food and health. Nestle is thus hopeful that healthier foods will draw strong interest among Asian consumers.