PETALING JAYA: As consumption for fast-moving consumer goods (FMCG) pick up, the industry is poised for growth despite inflationary pressure.

       Currently, an estimated one-fifth of the Malaysian household consumption is spent on such goods and this figure is expected to rise in the coming years.

       Etika Group CEO for Malaysia, Singapore and Brunei Khalid Alvi said with the revival in demand and consumption, he expects better growth for the industry this year.

       He said the FMCG industry is also facing an unprecedented level of inflationary pressure due to a rise in the cost of key raw materials such as palm oil and packaging materials as well as transport costs.

       “The global Covid-19 pandemic has also pushed the FMCG sector to adopt new technology and changes along with adapting to the new normal.

       “With the fast-evolving industry, companies will need to focus more on sustainable practices in their businesses, including responsible sourcing and sustainable production and packaging, end-to-end visibility, integration, agility and optimisation,” he said in an email interview with StarBiz.

       Etika Sdn Bhd is one of the leading halal beverage manufacturers in the country with 18 brands.

       Khalid said factors that would spur the growth of the FMCG sector this year would be the demand for healthier alternative, plant-based products and consumer convenience.

       He added that healthier alternative products have made their way into supermarkets which previously were available only in specialty health food stores.

       He attributed this to consumers wanting food and beverages that would improve their health and general well-being.

       “We can see entries of global plant-based brands like Beyond Meat and OmniMeat in the country which shows that there’s a growing demand for plant-based products locally.

       “Supermarkets across the country are now selling more plant-based products and we can also see local businesses introducing plant-based product innovation to the market.”

       He said that for the FMCG industry, this could provide an opportunity for companies to expand their product offering and tap into a new market.

       “One of our brands, Goodday Milk, has also tapped into this market when we added Good Vibes by Goodday Milk to our portfolio back in 2019,” Khalid noted.

       Etika Group is one of the leading manufacturers and distributors of PepsiCo’s global brands such as Pepsi, Tropicana, Mountain Dew, Revive Isotonic, Mirinda, 7UP, Gatorade, Lipton Ice Tea, MUG, Sting and Evervess exclusively in Malaysia.

       The company also manufactures, distributes and markets Wonda Coffee and Calpis, plus its own brands like Goodday Milk, Dairy Champ, Kickapoo (a Monarch trademark), Hijrah, Chill Asian Drinks and Bleu Mineral Water.

       As consumers live busier lifestyles, he said they are demanding more convenience, especially when it comes to getting meals and necessities.

       With eCommerce platforms like Grab, Shopee and Lazada, he said consumers are buying more online and are now expecting their items to be conveniently delivered to their house rather than having to go out to get what they want.

       Jumping on the convenience bandwagon, he said Etika’s acquisition of Atlas Vending has allowed it to have access to 10,000 vending machines across Malaysia and Singapore.

       As vending becomes a new shopping trend, he said this allows the company to fulfill its consumers’ on-the-go lifestyle.

       According to Kantar’s Asia Omnichannel Report 2021, while the eCommerce value share of FMCG is currently under 10%, it is the fastest growing at 27.2%, while total FMCG in Asia grew by around 5%.

       The report said e-commerce was also the fastest-growing channel in the region, posting 56% growth based on 2021 first-half trends.

       Not only are consumers shopping online but the repeat rate is also increasing (above 50% for South-East Asia) as they become more accustomed to buying on eCommerce platforms.

       “The pandemic has pushed many consumers to make their purchase online. This trend is likely to stay as consumers can now enjoy the convenience that online shopping offers, both in terms of product variety and pricing range,” he added.

       So what are some of the key trends in the FMCG industry this year? Khalid said he expects the shift in the consumers’ value perception and their buying habits, growing interest in eco-friendly products and healthier product options.

       A research by Mckinsey and Co in 2020 shows that consumers are being mindful about their spending and trading down to less expensive products.

       And this is true as Etika sees a shift where consumers are not spending as much as they used to and there is a change in their spending habits as compared to how it was previously, he said.

       Khalid added: “Over the past years, there has been a growing interest in eco-friendly products. Consumers are becoming increasingly aware of the environmental impact of their actions and those of the larger community.”

       He said this is especially with the changing climatic condition not just being a talk but has become an international concern.

       “One of the steps we took is becoming a member of the Malaysian Recycling Alliance (Marea). We will be working closely with Marea to tackle consumer packaging waste issues and work towards attaining Sustainable Malaysia 2030.

       “A strategic thrust identified in the Plastics Sustainability Roadmap is to implement mandatory extended producer responsibility initiatives and a recycling rate of 25% for post-consumer plastic packaging by 2025.”