"Today a large portion of the egg products used in Asia is imported from the west. In the future, more bulk liquid and powder egg products will be produced domestically leading to an increase in intra-Asian trade," asserted Morten Ernst, a director of the Lactosan-Sanovo Ingredients Group, addressing an International Egg Commission (IEC) meeting in Paris earlier this month.

He continued: "In the future, internationally-minded egg products companies will look to become domestic ASEAN Free Trade Agreement (AFTA) processors in order to export and import freely inside a two billion-strong population market that otherwise, they might lose. Such companies will benefit from this move by exporting from their new facilities in Asia back to their home market. Established processors outside of this area will switch from producing bulk products to more added-value items allowing them to enter the more sophisticated food segment where margins are much more rewarding."

In future, the bulk industrial products will come from the new egg processors in the emerging Asian markets, who will offer the same quality and traceability now required throughout the world, he said.

Currently, some 60 per cent of the world's eggs were laid in Asia and this dominance will continue to grow. It had been estimated that, by 2015, world egg consumption would have increased to 70 million tonnes with almost 70 per cent of the gain occurring in Asia.

It is estimated that there will be around 300 million more people in Asia in 2020 than today, and 450 million more by 2030. Only Japan will see a reduction in its population.

Today, half of Japan's population is older than 45, so there would be fewer young people there to take care of the elderly. However, China was in a similar position. Ten years ago, 130 million Chinese were over 60 but in 2030, more than 340 million will exceed this age.

"The reality is that we are in an era in which the elderly are making up an ever larger proportion of the population. This will have an impact on food trends in not only two of the most different countries – Japan and China, but in all Asia," Mr Ernst said.

The economic and demographic changes in Asia in the next decades will create urban, middle-class populations that are affluent, mobile and bilingual. In the next 20 years, these groups would constitute a demographic five times larger than Japan's domestic market.

Mr Ernst explained: "According to the Japan Centre for Economic Research, the Chinese economy in the next decade will be four times larger than Japan's and by 2030, it will be five times as big."

The launch in January this year of the tariff-free trade agreement between China and the ten member countries of the Association of South East Asian Nations (ASEAN) was the start of the world's biggest regional trade agreement from a population standpoint. This agreement covered close to two billion people and coincided with the implementation of a similar deal with Australia and New Zealand. Earlier deals between the ASEAN countries and India, Japan and South Korea will eventually lead to a huge tariff-free trading bloc.

Mr Ernst went on to observe: "Japan is the only country in Asia with fully industrialised egg processing, with egg products accounting for nearly 50 per cent of egg consumption. In China, this figure is less than one per cent."

The current urban population in East Asia, excluding Japan is 800 million. In the next 20 years, this figure is expect to grow to almost 1.5 billion people. Product development and marketing was changing to accommodate this growing segment of the population.

"Japan is already known for novel foods presented in innovative packaging and this will continue. But, China will move extremely fast from traditional food and eating habits to value-added food and eating habits dictated by western and Japanese trends. China went from no phones to mobile phones in a blink," he asserted.

He continued: "New foods with added health benefits will be invented. These will comprise each individual country's traditions, with an added western twist. Foods will be fresh and marketed as nutritious and healthy foods. They will also be safe and traceable. Finished value-added Asian foods will be exported inside Asia and to Europe and the USA. Asian food conglomerates will advertise their brands abroad, sponsor sports events and create brand awareness. These foods will be targeted at that portion of the population who have the money to purchase the latest trendy food products. In general these will be young men and women with jobs and a craving for well-known brands."

A large part of the Asian population is very poor but they have to eat, and the demand for food is growing throughout the region, although in recent years, this had caused severe problems for Asia's poor as the prices for simple staples had increased dramatically.

Mr Ernst said: "Nevertheless, more countries are becoming more affluent and this will lead to a more balanced diet, which will include more protein foods. We are in the business of delivering protein. While people living in the developed world eat on average more than 60 grams of protein a day, those in the developing countries average less than 20 grams. The potential for protein rich egg product ingredients is obvious."

He sees a more industrious egg industry in the emerging Asian countries, led by multi-national well-known food companies with well-known brands. Concerned customers will demand safer eggs, which will result in a growing interest in egg products.

Ten years ago, there were hardly any safe egg products manufactured in Asia's developing countries. Today, there were state-of-the-art factories in several countries and this trend will, as food safety increasingly becomes key.

Mr Ernst concluded by saying: "As the number of egg products factories will grow in Asia so possibly will protectionism. I see a future where less egg products will be imported from outside the region, because of more liquid and powder processing in Asia and intra-trading. After all, egg products processing was originally invented in Asia than 100 years ago!"

April 2010