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The Future of Functional: What’s next for Malaysia’s Functional Food and Beverage Industry

March 12, 2025

As the consumer spending outlook in Malaysia for 2025 is looking quite strong with a projection of 5% year on year growth in 2025, many food and beverage manufacturers can remain optimistic about the opportunities that are present in the country for the year.1 One area that remains a strong opportunity for manufacturers are within the functional category where according to a recent GlobalData 2024 Q3 consumer survey, it mentions that 70% of respondents in Malaysia stated that their product choices are often influenced by how well the product or services impact their health. 

There are several key areas which are quite intriguing for Malaysian manufacturers to explore on including within the meal replacement as well as the sports drinks category while many manufacturers are looking into different ways to incorporate sugar reduction within their products portfolio. 

Figure 1 – (on the left) : Number of launch for functional beverages in South Asia and Southeast Asia, (on the right) : Launch of functional beverages by country (2024) 

Recent data by Innova shows that as a whole, the South Asia and Southeast Asian region is experiencing a significant growth of NPD within the functional beverage category with a 22% upswing in 2023 bucking many analysis that the category will decrease once the pandemic is over. The growth in NPD within the region can be attributed to many factors but it can essentially be broken down into two segments which are the growing consumers’ health concern such as Thailand’s main focus on beauty-targeted products as well as the growing aging population in several Asian countries.  

Malaysia itself is ranked second along with Indonesia when it comes to the number of functional beverages being launched in the region just slightly behind the market-leader, Thailand. However, while many Thai are focused in targeting slim & beauty products, many Malaysians continue to prioritize products that can reduce the risk of non-communicable diseases such as obesity, hypertension and heart diseases as statistically, over 50% of Malaysian adults are obese or overweight while 18% have diabetes.  

The rise of meal replacements in Malaysia  

Meal replacement product launches are growing well in Malaysia because Malaysians focus to prevent health issues, with nearly half concerned about weight management. The sole focus of too many meal replacements in the market is on weight loss, which means their calorific value can be as low as under 100 calories and completely free of carbohydrates.2 Based on GlobalData 2024 Q3 consumer survey, many Malaysians also need a meal replacement that can supply the complete nutrients of a high-protein, low-carb meal, low-sugar while also having sufficient calories to keep customers satiated.1 

Besides powder-based meal replacement and snack bar, liquid meal replacements or meal replacement drinks are also trending in the market right now. Liquid meals are more convenient and suitable for on-the-go consumption that don’t take a long time to prepare. Malaysians want simple meals with a good taste and more consider using traditional ingredients that they know before and feel common as the main ingredient.  

Figure 2 – Top 5 positionings for meal replacement & other drinks subcategory launches in Asia Pasific (2024)

Most producers are combining some fruit extracts with plant protein ingredients in their product to make users feel full. Moreover, 47% of respondents in APAC preferred to choose high protein meal replacement.4 The products also can be contained by edible bits to make the body feel like it’s consuming an actual meal, helping users feel fuller for longer.2  

Meal replacement products can be complicated by dietary fiber, prebiotics and protein ingredients as the main ingredients to promote gut health, addressing another common issue faced by many who skip meals regularly. Combining protein, dietary fibers and prebiotics in the meal replacement are also intensely investigated on the benefits it brings in managing blood sugar levels and supporting weight management.3 Soluble fiber can slow sugar absorption and improve insulin sensitivity, benefiting individuals with or at risk of diabetes. These benefits have made dietary fibers and protein ingredients as staple ingredients in meal replacement products. 

How dietary fibers and protein ingredients support weight management system  

With many Malaysian consumers largely focusing on weight control; high-protein and high-fiber meals are the most claims that preferred by customers. Beyond its conventional use in gut health-related products like yogurt, dietary fiber has found applications in a broad spectrum of products, ranging from functional beverages to meal replacement products. 

Despite the various health benefits, there are still gaping holes among many dietary fiber products that can leave many consumers feeling unsatisfied. Several factors such as low tolerate dosage that can result to the side effects of bloating or laxative effects. 

Addressing the evolving demand for dietary fiber in various applications, LNK introduces FiberCremeTM that brings a new portrait to the world of dietary fiber as it is high in dietary fiber but has a unique creamy taste profile which means it is able to enhance the taste profile of many food and beverage products. Moreover, FiberCreme is well tolerated up to 50-60 g/day with minimal risk of laxative effects for consumers.  

One of FiberCreme’s clinical studies shows that the combination of high protein-high fiber diet using FiberCreme can result in better weight control performance than high-protein diet only; as it resulted to a more significant reduction of body weight loss, body mass index and body fat percentage in comparison to consuming high protein diet only.5  

This result is beneficial for manufacturers who are exploring to create functional products, especially meal replacement that contains high protein and with the combination of FiberCreme, it can prove to be a formidable combination that results to better weight management control. Moreover, FiberCreme is beneficial to act as masking agent in plant-based products or when combined with plant-based protein sources as it helps to mask “beaniness” or “nuttiness” that often arise in these products.5 

For further insights on how FiberCreme can enhance the value of your products, we encourage you to reach out through our website at www.business.fibercreme.com . Explore a collection of white papers on FiberCreme developed for diverse applications: 

Yogurt –  https://www.business.fibercreme.com/application/dairy
Meal Replacement –  https://www.business.fibercreme.com/application/health-nutrition
Fruit Juice –  https://www.business.fibercreme.com/application/dairy-alternatives

References:  

  1. Savitha Kruttiventi. (2024). Heightened health concerns to spur demand for functional beverages in Malaysia. GlobalData. https://www.globaldata.com/media/consumer/heightened-health-concerns-spur-demand-functional-beverages-malaysia-says-globaldata/  
  2. Shathana Kasinathan. (2024). These M’sians quit law to build a meal replacement brand that’s now expanded abroad. https://vulcanpost.com/873807/tastebudds-malaysian-meal-replacement-healthy-vegan-brand/#google_vignette  
  3. Eastlake D. (2024). Gut health: why this consumer trend is here to stay. Food Navigator.  https://www.foodnavigator.com/Article/2024/03/14/Gut-health-Why-this-consumer-trend-is-here-to-stay 
  4. Innova Market Insight. (2024). Overview in Meal Replacements & Other Drinks in Asia Pasific. 
  5. Hendi Wijaya (2022). The combination of isomalto-oligosaccharides (IMO)-based dietary fiber and hypocaloric high-protein diet could improve the anthropometric profile and fasting plasma glucose of healthy adults: A repeated single-arm clinical trial. Science Direct Journal. 

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