Sector Trend Analysis – Packaged food trends in the Philippines

Market and consumer overview

The Philippine market attained annual real GDP growth of 7.6% in 2022, surpassing the Asia Pacific average of 3.9% in 2022 as expansion was driven by an influx of new tourists, the easing of supply chain restrictions, as well as high continuing remittance inflows (Philippines is the fourth largest receiver of remittances globally), mainly from the United States (Euromonitor International, PEST Analysis, The Philippines, June 2023).

Similar to other global economies, rising inflation in 2022 placed a strain on the consumers' purchasing power. In response, the country's central bank implemented an aggressive monetary policy to restrain price growth, however, the policy was also expected to temporarily curb the country's economic activity and investments. In the forecast period, the country is expected to witness strong consumer income growth through to 2040, benefiting primarily from rising domestic investments and recovery in travel and tourism (Euromonitor International, PEST Analysis, The Philippines, June 2023) In addition, a new agreement to boost trade, the Regional Comprehensive Economic Partnership (RCEP) came into force January 2022, creating a new Asia Pacific trading bloc between the ten ASEAN (Association of Southeast Asian Nations) countries and Australia, China, Japan, New Zealand and South Korea. Further, the RCEP is also expected to further enable supply chain diversification strategies, encouraging production relocation to low-cost Southeast Asian countries. As a result, emerging countries such as Vietnam, Indonesia, Thailand, Cambodia and the Philippines are aiming to enhance their manufacturing power with firms increasingly looking for alternatives to diversify their operations (Euromonitor International, PEST Analysis, The Philippines, June 2023).

The Philippine consumer is relatively young and affluent. The population aged 30-34 in particular, is forecast to remain the highest gross income earners in 2040, due to their higher levels of education and English language use. In addition, the 35 to 39 age group will be prevalent in the top-income band (those with an annual gross income over US$250,001), while young adults (aged 15 to 24) will register the steepest increase in their average gross income levels through to 2040 (Euromonitor International, PEST Analysis, The Philippines, June 2023).

The single person household is anticipated to increase 82.0% and account for 12.5% of all households by 2040 and can be attributed to rural-urban migration and changing lifestyles (choosing education and establishing a career and financial foundation prior to having children) among Philippine youth, while couples with children will remain the dominant household type, accounting for 54.5% of all households by 2040, mainly due to prevailing traditional family lifestyles (Euromonitor International, Households: The Philippines, July 2022).

The national capital region is anticipated to remain the largest consumer market in the Philippines accounting for 20.8% of total consumer expenditure by 2040, and food and non-alcoholic beverages in particular, are forecast to be the largest consumer spending category also by 2040 (Euromonitor International, Income and Expenditure, August 2022).

As noted in the Euromonitor International's Voice of the Consumer: Lifestyles Survey (fielded January to February 2023), regarding consumer attitudes and behaviour; 69% of respondents, including 75% of millennials (aged 30 to 44), report they extensively research the products and services they consume. Of those noted millennials, 77% will only buy from companies and brands they trust completely (Euromonitor International, Consumer Lifestyles in the Philippines, page 12, July 2023).

In terms of eating and dietary habits, unhealthy eating habits and more sedentary lifestyles are prompting many consumers to look for ways to manage their weight (50% say they actively monitor what they eat in order to manage their weight), and there is an increased focus on healthy ingredients, as 50% read the nutrition labels on the products they consume. Further, for a variety of reasons including personal health, rising prices and sustainability, many consumers are focusing on the proportion of meat in their diets (28% say they are trying to reduce their meat consumption while 14% say they now eat meat (and fish) only occasionally) (Euromonitor International, Consumer Lifestyles in the Philippines, page 24, July 2023).

In addition, as food prices increase, 28% of respondents say they regularly seek private label and low-cost products when they shop, while a lack of time to buy groceries and prepare home-cooked meals impacts meal choices as 63% of consumers cook or bake at home at least weekly rather than dine out, and 47% of respondents say they reheat/prepare ready meals to save time and effort. Similarly, 38% say they regularly order food for home delivery while 41% are regularly ordering food for takeaway or pick up ready-made food to eat at home (Euromonitor International, Consumer Lifestyles in the Philippines, page 24, July 2023).

Retail markets

Global retail sales of packaged food

The global market for packaged food has experienced positive growth with a moderate CAGR of 6.0% as retail value sales have increased from US$2.0 trillion in 2017 to US$2.7 trillion in 2022 and are expected to increase by an additional CAGR of 6.5% as retail sales are expected to reach US$3.8 trillion by 2027. The United States (U.S) was the largest global market for packaged food with retail sales of US$519.4 billion (19.0% market share), followed by China with values of US$341.3 billion (12.5% market share) and Japan, with retail sales of US$176.8 billion (6.5% market share) in 2022.

The Philippines was the twenty-ninth largest global retail sales market for packaged food with values of US$16.5 billion, representing a 0.6% market share in 2022. Philippines experienced a moderate increase in CAGR of 7.4% as retail sales grew from US$11.5 billion in 2017 and is expected to further improve with an increase in CAGR of 6.7% in the forecast period as retail sales are anticipated to reach US$22.8 billion by 2027. Canada in comparison, was the twelfth largest retail sales market for packaged foods, accounting for a 2.0% market share with values of US$55.9 billion in 2022. Canada is expected to maintain its positive growth with an increase in CAGR of 4.7% in the forecast period as retail sales are expected to attain US$70.4 billion by 2027.

Market size of packaged food in the Philippines

According to Euromonitor International (Packaged Food in the Philippines, February 2021), the emergence of the pandemic and government implemented isolation restrictions resulted in early stockpiling tendencies for staple foods and an increase in home cooking and meal preparation, as many Filipinos worked and studied from home. Staple foods such as rice and noodles (instant noodle cups) were popular packaged food items purchased by the consumer during their home seclusion.

The packaged food market in the Philippines was valued at US$16.5 billion in 2022. During the 2017 to 2022 period, this market grew at a substantial CAGR of 7.4% from US$11.5 billion in 2017, with growth of 8.5% between 2019 to 2020 with the onset of the pandemic. The Philippine packaged food market recently experienced greater growth (10.1%) between 2021 and 2022 as retail sales increased from US$15.0 billion in 2021. Of note, all packaged food product categories experienced positive growth within the historic period.

The top three packaged food categories in the Philippines, in terms of retail value sales in 2022, were processed meat, seafood and alternatives to meat with values of US$3.0 billion (18.2% market share) attaining the largest CAGR (11.2%) of all packaged food categories, as retail sales increased from US$1.8 billion in 2017, followed by dairy with values of US$2.9 billion (17.8% market share) increasing at a CAGR of 8.1% from US$1.9 billion in 2017, and savoury snacks with values of US$1.7 billion (10.6% market share), representing an increase in CAGR of 5.4% as retail sales grew from US$1.3 billion in 2017.

During the forecast period, packaged food is expected to attain a CAGR of 6.7% as retail sales reach US$22.8 billion as the market benefits from continued home cooking, while the demand for convenient packaged food products that adhere to emerging health and wellness trends evolve (Euromonitor International; Packaged Food in the Philippines, February 2021). Similar to the historic period, all product categories of packaged food are anticipated to experience positive growth, with the exception of edible oils, which experiences a slight decline in CAGR (0.8%) by 2027. The plant-based dairy category in particular, is anticipated to perform the best with increases in CAGR of 8.7% achieving US$62.8 million by 2027, while the dairy and ice cream categories are also expected to perform well, attaining increases in CAGR of 8.4% each, with values of US$4.4 billion and US$578.2 million respectively, by 2027.

Competitive landscape

The Philippine's packaged food market remained a highly fragmented industry throughout 2017 to 2022, accounting for a measurable representation of smaller companies. San Miguel Corp, (Brand names; Purefoods, Magnolia, Star, Dari Crème, Baker's Best and Buttercup) was the largest packaged food company in the Philippines with retail sales of US$1.4 billion (8.3% market share), while Nestlé SA (Brand names including Bear Brand, Nido, Chuckie, Nestlé, S-26), the second largest packaged food company, attained US$1.3 billion (8.1% market share) in 2022.

Private label companies in comparison, represent a minimal presence in the packaged food market with retail sales of US$335.8 million (2.0% market share) in 2022, despite increasing measurably in CAGR (by 9.1%) from retail sales of US$217.5 million in 2017, while artisanal companies attained stronger retail sales of US$418.1 million (2.5% market share) in 2022, representing an increase in sales from US$369.8 million in 2017.

Distribution retail channels

The majority of the Philippine's packaged food market is distributed through grocery retailing versus non-grocery retailing. Grocery retailing (offline) of packaged food accounted for a 96.9% market share in 2022, increasing slightly from 96.0% held in 2017, while grocery retailing (online), e-commerce in particular, increased its market share representation to 3.4% in 2022, growing from 0.0% held in 2017. Further, within grocery retailing (offline), supermarkets and small local grocers were the predominant distribution channels for packaged food representing US$7.9 billion and US$5.2 billion each, with market shares of 51.7% and 33.9% respectively, in 2022. Of note, e-commerce retail sales of packaged food increased from US$0.6 million in 2017 to US$554.8 million in 2022.

Subsector analysis

Cooking ingredients and meals

According to Euromonitor International, the cooking ingredient and meals market in the Philippines has recently stabilized following the increase in demand resulting from home seclusion, as most lifestyles return to pre-pandemic life. Retail value growth was cited to rise in 2022 primarily as the result of price increases, most notable in the edible oil category.

In the forecast period, retail values sales of cooking ingredient and meals are expected to record slower growth as consumers return to foodservice channels, leading to a lower demand for cooking ingredients and meals products through retail channels. Further, with the recent increase in retail food prices, there will likely be a contraction in consumer demand, especially if retail prices remain elevated for long periods of time (Euromonitor International; Cooking Ingredients and Meals in the Philippines, November 2022).

Edible oils

The Philippine edible oil market grew at a measurable CAGR of 10.9% during the 2017-2022 period, increasing in retail sales from US$965.0 million in 2017 to US$1.6 billion in 2022, as edible oils are a main ingredient used in home cooking and meals. Relatedly, Euromonitor International notes that retail prices in the edible oil category have increased due to supply shortages (the recent sunflower oil shortage has resulted in an increased demand for other types of edible oil globally, thereby increasing prices within the category) and raw material price increases (Euromonitor International; Cooking Ingredients and Meals in the Philippines, November 2022).

Other edible oils were the largest edible oil category with retail value sales of US$938.9 million (58.1% edible oil market share) in 2022 and achieved the best performance expanding 43.6% between 2021 and 2022 as retail sales increased from US$654.0 million in 2021. During the historic period, other edible oils achieved an increase in CAGR of 12.4% from US$52.2 million in 2017. Of interest, palm and rapeseed oil also performed well within the historic and forecast period, as consumers sought more affordable oil types as a reprieve from overall increased edible oil retail prices. Canola oil in particular, is popular amongst local consumers as it is generally perceived as a healthier, and less expensive edible oil option (Euromonitor International; Edible oils in the Philippines, November 2022).

The edible oil market is forecast to decline slightly in CAGR by 0.8% reaching US$1.6 billion by 2027 as consumer patronage of foodservice channels is expected to gradually improve. In the edible oil competitive landscape, United Coconut Oil Mills (UNICOM) (Brand name: Minola) led sales with a market share of 38.2%, followed by International Oil Factory (Brand name: Baguio) with a market share of 34.8% while private labels represented a 9.5% market share in 2022. Of note, product innovation in vegetable and seed oil is stagnant as there is usually minimal differentiation amongst available brands and products (Euromonitor International; Edible oils in the Philippines, November 2022).

Meals and soups

Meals and soups experienced continued growth at a CAGR of 8.9% during the historic period attaining retail sales of US$160.7 million in 2022. Ready meals and soup were the predominant product categories with retail sales of US$87.3 million (54.3% market share of the meals and soups category) and US$72.8 million (45.3% market share of the meals and soups category) respectively, in 2022. Shelf stable meals in particular, experienced volume growth in 2022 as the product was considered both affordable and convenient for consumers in their meal preparations. Pizza in comparison, was the best performing category increasing in growth by 100% from US$0.3 million in 2021 to US$0.6 million in 2022, as some foodservice providers introduced new products such as Yellow Cab Toaster Oven Pizza (frozen pizza), for retail channel distribution (Euromonitor International; Meals and Soups in the Philippines, November 2022).

The market is expected to expand at a CAGR of 7.5% in the forecast period, reaching retail sales of US$231.0 million by 2027. Of interest, plant-based offerings in ready meals are anticipated to become more prevalent in the Philippine market due to growing consumer interest in plant-based diets as a healthier alternative to meat and dairy consumption (Euromonitor International; Meals and Soups in the Philippines, November 2022). In the competitive landscape of the meals and soups market, Unilever Group (Brand name: Knorr), San Miguel Corp (Brand name: Purefoods) and Campbell Soup Co (Brand name: Campbell's) were the leading ready meal and soup companies in the Philippines, accounting for a combined 63.9% market share in 2022.

Sauces, dips and condiments

The sauces, dips and condiments market grew measurably at a CAGR of 7.9% during the 2017-2022 period, with total retail sales attaining US$1.2 billion in 2022. Similar to other packaged food categories in the Philippines, growth in the sauces, dips and condiment category stabilized in 2021, following the increase in sales due to consumers shifting to working and studying from home (Euromonitor International, Sauces, Dips and Condiments in the Philippines. November 2022). Sauces were the largest segment of the sauces, dips and condiment category with retail value sales of US$681.0 million (59.1% market share), followed by cooking ingredients and condiments valued at US$431.0 million (37.4% market share) in 2022. Of note, the recent prominence of the health and wellness trend has encouraged some brands in the category to add healthy ingredients such as vitamins and/or minerals to their products to improve their positioning within the health and wellness category (Euromonitor International, Sauces, Dips and Condiments in the Philippines. November 2022).

The sauces, dips and condiments sector are expected to experience moderate growth, albeit at a lower CAGR of 6.3%, during the forecast period as retail sales reach US$1.6 billion by 2027. Unilever Group (Brand names: Knorr, Lady's Choice and Best Foods/Hellmann's), Nutri-Asia Inc (Brand Names: UFC, Datu Puti, Silver Swan, Jufran, Papa, Mafran and Lauriat) and Ajinomoto Co Inc (Brand names: Ajinomoto and Crispy Fry) were the leading companies, representing a combined 62.9% market share in 2022.

Sweet spreads

The sweet spreads market experienced moderate growth attaining a CAGR of 8.6% during the historic period, achieving retail sales of US$79.4 million in 2022. Product collaborations have been a common strategy employed by manufacturers in the sweet spreads category while some leading brands in the chocolate spreads category such as Nutella, have released limited edition products which have featured morning greetings printed on the front label, in order to help sustain consumer interest in the product (Euromonitor International; Sweet Spreads in the Philippines, November 2022).

Nuts and seed-based spreads were the largest of the sweet spreads category with retail value sales of US$30.5 million (38.4% market share) in 2022, while chocolate spreads were the best performing category in terms of annual growth, registering 34.2% as retail sales increased from US$12.0 million in 2021 to US$16.1 million in 2022.

The sweet spread market is expected to see continued growth at a lower CAGR of 6.1% during the forecast period, anticipating retail sales of US$106.8 million by 2027. The category will continue to benefit from the demand for baked goods, as an addition and compliment to many breakfast and snack options, suiting busy lifestyles, especially those of urban dwellers. In addition, chocolate spreads (considered an accessible indulgence by most) and their versatility in the baking of sweet treats may persist during the forecast amidst the heightened interest garnered in home baking.

Of note, the growth prospects in honey, used most commonly as a sweetener by health-conscious consumers, is expected to remain limited in the forecast period due to its high price point (Euromonitor International; Sweet Spreads in the Philippines, November 2022). In the competitive sweet spread market, Newborn Food Products Inc (Brand name: Lily's) a local brand, was the leading spread company in the Philippines with a market share of 17.8%, followed by Ferrero and related parties (Brand name: Nutella) with a market share of 15.5% in 2022.

Dairy products and alternatives

As noted in Euromonitor International, the introduction of new products in the dairy and alternatives category has contributed to an increase in demand and resulting sales growth during the historic period, specifically in 2022. Further, dairy consumption appears to have resumed pre-pandemic patterns, yet overall consumption remained higher in 2022, due to the consumer's increased interest in home cooking and baking fostered during time spent at home. Baby food remained an established segment as demand in the category was associated primarily with fluctuations in the country's birth rate (Euromonitor International; Dairy Products and Alternatives in the Philippines, September 2022).

In the forecast period, dairy products and alternatives are expected to expand at a CAGR of 7.9% reaching retail sales of US$5..7 billion by 2027. In the dairy segment, shelf stable milk, cheese and yoghurt in particular, are anticipated to increase in value sales attributed to product preferences established during home consumption. Further, interest in home baking and cooking in general, is expected to resume in the forecast period. The performance of baby food is anticipated to remain stable (Euromonitor International; Dairy Products and Alternatives in the Philippines, September 2022).

Baby food

The Philippine baby food market grew by a CAGR of 2.0% during the 2017-2022 period, increasing in retail sales from US$851.7 million in 2017 to US$938.7 million in 2022. The market has recently experienced lower volume sales which have been attributed to supply chain issues however, the measured decline in birth rate, in addition to the increase in mothers who breastfeed, are expected to present challenges to segment growth (Euromonitor International; Baby food in the Philippines, September 2022). Milk formula was the largest baby food category with retail value sales of US$913.4 million (97.3% of baby food market share) in 2022, despite the official recent ban on the promotion of milk formula in place in 2022 (Euromonitor International; Baby food in the Philippines, September 2022), while other baby food was the best performing category, increasing in CAGR by 4.8% as retail sales grew from US$1.5 million in 2017 to US$1.9 million in 2022

The baby food market is forecast to remain positive with a CAGR of 6.1% with retail sales anticipated to reach US$1.3 billion by 2027, as demand in the category is expected to be propelled and effected primarily by future birth rates, breastfeeding and the spending capacity of parents. The milk formula category is expected to remain a top performing category in the forecast period, increasing in CAGR by 6.1% to reach sales of US$1.2 billion by 2027 despite the recent increase in breastfeeding and the official ban placed on the promotion and advertising of milk formula in 2022 (Euromonitor International; Baby food in the Philippines, September 2022). Further, other baby food is anticipated to increase in CAGR by 5.6% in the forecast period as this product is fortified with immunity boosting nutrients, addressing parent's concerns of food safety and hygiene, since heightened by the pandemic (Euromonitor International; Baby food in the Philippines, September 2022). In the baby food competitive landscape, Nestlé SA (Brand names : S-26, Nido, Nan, Nestogen, Bonamil, ) led sales with a market share of 47.0%, followed by Reckitt Benckiser Group Plc (RB) (Brand names: Lactum, Enfamil and Alacta) with a market share of 44.8% and Abbott Laboratories Inc (Brand names: Similac and PediaSure) with a market share of 4.6% in 2022.

Dairy

The dairy category was the second largest packaged food category in the Philippines with retail sale values of US$2.9 billion in 2022 and experienced a moderate increase in CAGR of 8.1% from retail sales of US$1.9 billion in 2017. Drinking milk products was the largest dairy segment with retail sales of US$1.6 billion (53.1% market share of dairy products) in 2022. Popular drinking milk products were flavoured milk drinks and shelf stable milk, which offered an additional consumption product option to the consumer as fresh milk is limited in availability in the country. Of note, more than 90% of the country's milk supply is imported since local production remains low in comparison to demand. As such, the country's Department of Agriculture has recently concluded agreements with France, Qatar and Israel to develop and modernize the country's dairy sector. Further, shelf stable milk is an economical and convenient alternative to having a light meal or snack, as milk is perceived as nutritious and offering fortified/functional immunity boosting ingredients (Euromonitor International, Drinking Milk Products in the Philippines, September 2022). Dinking milk products are expected to record a positive performance in the forecast period as consumption habits established during the pandemic are anticipated to develop into long-term consumption trends.

The yoghurt and sour milk product category experienced the largest CAGR of 11.9% as retail sales grew from US$213.3 million in 2017 to US$373.7million in 2022. Drinking yoghurt retail sales in particular, continued to support the demand for functional/fortified immunity boosting products, such as Yakult drinking yogurt products, while sales of sour milk products remained negligible due to the limited availability of such products. Drinking yogurt products will remain the most promising product over the forecast period as an increased number of manufacturers is expected to lead to improved product innovation to sustain consumer interest (Euromonitor International; Yoghurt and Sour milk Products in the Philippines, September 2022).

Butter and spreads, and cheese remain the smaller categories within the dairy category in the Philippines. According to Euromonitor International, butter and spreads are used as common ingredients in many local Philippine dishes however, an impending legislative ban on trans fat and increasing consumer price-sensitivities are expected to impact the category significantly in the forecast period (Euromonitor International; Butter and Spreads in the Philippines, September 2022).

The cheese category in comparison, witnessed strong growth in the historic period due primarily to the favourable performances registered in spreadable cheese and processed cheese, as cheese remains a product commonly used as a sandwich filling, as well as an ingredient in the preparation of a wide range of dishes. Artisanal or unprocessed cheese in contrast, remains limited as the demand for the product is confined to higher income consumers however, some local producers, Malagos Farmhouse for example, are helping improve both awareness and appreciation of unprocessed cheese as a product. Cheese is expected to perform well in the forecast period as home cooking trends established during home seclusion are predicted to continue. (Euromonitor International; Cheese in the Philippines, September 2022).

The dairy market is expected to expand at a CAGR of 8.4% in the forecast period, reaching retail sales of US$4.4 billion by 2027, due to the recent expansion and innovation of dairy products available to the consumer. In terms of competitive landscape, Nestlé SA (Brand names: Bear Brand, Chuckie, Nestlé, Nido and Carnation), was the leading dairy company in the Philippines, accounting for a 29.2%% market share, followed by Royal FrieslandCampina NV (Brand name: Alaska) with a 15.4% market share and San Miguel Corp (Brand names: Magnolia, Star, Dari Crème, Baker's Best and Buttercup) held a 14.8% market share in 2022.

Plant-based dairy

Plant-based dairy (milk) market grew slightly a CAGR of 2.6% during the 2017-2022 period, with total retail sales valued at US$41.4 million (1.1% market share of dairy products and alternatives) in 2022, as the category remains a predominantly niche grouping. Soy drinks accounted for most of the retail sales of plant-based dairy as they are considered impulse purchases meant for on-the-go consumption. Interest in other plant-based milk, such as oat milk, is also increasing in consumer interest, as Starbucks for instance, began offering oat milk as an alternative to dairy milk for their milk-based beverages. Similarly, as demand for plant-based alternatives in drinking milk products increases, interest in plant-based yogurt is also being explored by small-scale entrepreneurs. Relatedly, plant-based cheese offerings have the potential to become more popular in the Philippines in the future as consumer awareness and interest in the product increases (Euromonitor International; Plant-Based Dairy in the Philippines, September 2022).

The plant-based dairy sector is expected to experience increased growth with a CAGR of 8.7% during the forecast period and is anticipated to be valued at US$62.8 million by 2027, as the awareness and benefits of plant-based diets, and the range of products available, strengthens. With respect to the competitive landscape, Green Spot Co Ltd (Brand name: Vitamilk) held a majority of the market share (78.5%), while Vitasoy International Holdings Ltd (Brand names: Vitasoy) maintained a 13.8% market share in 2022.

Staple foods

Retail sales in staple foods are recovering post-pandemic despite fewer snacking, home cooking and baking opportunities at home. The market has witnessed increases in retail product prices due to recent supply chain challenges, increased raw material prices and production costs, and inflation. Processed meat, seafood and alternatives, and the rice, noodles and pasta categories in particular, did experience favourable growth in the historic period as these staple foods remain prominent in the Filipino diet. In the forecast period, all staple food categories will continue to grow building from historic category strength and/or recovery from supply or material disruptions incurred during the pandemic (Euromonitor International; Staple Foods in the Philippines, November, 2022).

Baked goods

The Philippine baked goods market grew by an increase in CAGR of 4.6% during the 2017-2022 period, increasing in retail sales from US$859.0 million in 2017 to US$1.1 billion in 2022, despite the recent interest and increase in the home baking trend, as more people worked and studied from home. Euromonitor International notes that recovery in the baked goods category has been driven in part, by product price increases due to raw material shortages, flour in particular, as a result of the recent Russia-Ukraine war, which some companies have addressed by incorporating cheaper alternatives, such as coconut flour, into their recipes and baked products (Euromonitor International; Baked Goods in the Philippines, November 2022).

Bread was the largest baked good segment with retail value sales of US$546.1 million (50.7% market share) attaining a CAGR of 5.1% as retail sales grew from US$426.7 million in 2017, while pastry was the best performing category growing 5.6% in annual sales from US$219.0 million in 2021 to US$231.3 million in 2022. The cake category also maintained sustained growth during the historic period as cakes, although considered a discretionary and indulgent food item, remained relevant as a means to relieve emotional stress experienced during home confinement. Unpackaged cakes for example, delivered through alternative retail channels such as mobile-commerce apps like GrabFood, proved a popular option for consumers (Euromonitor International; Baked Goods in the Philippines, November 2022).

In the forecast period, baked goods are expected to expand at a CAGR of 7.4% reaching US$1.5 billion by 2027 as demand for the product continues as consumer lifestyles return to normal, post-pandemic (Euromonitor International; Baked Goods in the Philippines, November 2022). With respect to competition, Artisanal companies yielded a majority (38.8%) market share in 2022, while QAF Ltd (Brand name: Gardenia) was the largest baked good company in the Philippines, accounting for a 16.9% market share, while SM Retail Inc (Brand names: Goldilocks) accounted for an 8.4% market share respective in 2022.

Breakfast cereals

The breakfast cereal category experienced moderate growth at a CAGR of 7.0% during the historic period attaining retail sales of US$139.9 million in 2022. Hot cereal was the slightly larger segment in the breakfast cereals category recording retail sales of US$70.8 million in 2022, while children's breakfast cereals (as part of the larger RTE Cereal category) remained a notable category due to its large consumer (both adults and children) base as they are considered a practical option (as a snack or as a breakfast item) for those consumers with low or reduced purchasing power since these products can be consumed without milk and are a convenient item available in single-serve options. Nestlé Philippines Inc is active in the children's breakfast cereal market offering a variety of brands such as Nestlé Trix, fortified with B vitamins, calcium, and zinc, offering six different fruit flavours per box (Euromonitor International; Breakfast Cereals in the Philippines, November 2022).

The market is expected to expand at a CAGR of 7.9% between 2022 and 2027, reaching retail sales of US$204.4 million by 2027, as the market is expected to benefit from the healthy living trend enhanced by the pandemic and the consumer's demand for convenience. PepsiCo Inc (Brand name: Quaker) and Cereal Partners Worldwide SA (Brand names: KoKo Krunch, Stars, Nestlé and Milo) were the two leading companies, representing 32.7% and 27.1% of this market, respectively, in 2022.

Processed fruit and vegetables

Processed fruit and vegetables (shelf stable and frozen processed) experienced measured growth at a CAGR of 6.8% during the historic period attaining retail sales of US$306.0 million in 2022. Euromonitor International notes that value sales in this category have been driven primarily by price increases (supply chain issues and raw material price increases) as some consumers have opted to purchase fresh fruit and vegetables offered at affordable prices and perceived as a healthier option. Consumer interest in processed fruit and vegetables, however, has been sustained by the offerings of Del Monte Philippines, who has positioned the benefits of adding pineapples to a variety of recipes to increase the appeal and health of meal options Euromonitor International; Processed Fruit and Vegetables in the Philippines, November, 2022). Of note, frozen potatoes as a processed vegetable, French fries in particular, has recently declined in product availability due to low inventory on account of the global freight crisis, which has created delays in supply imports. McDonald's for example, recently posted an advisory that only regular size fries were available in outlets as of April 2022, in order to sustain the limited availability of French fries (Euromonitor International; Processed Fruit and Vegetables in the Philippines, November, 2022).

The forecast for the processed fruit and vegetable market is expected to expand at a CAGR of 7.2% between 2022 and 2027, reaching retail sales of US$433.0 million by 2027. The increase in growth will be measured however as foodservice patronage is expected to increase, while the government is expected to propose an urban agriculture program encouraging households to grow their own supply of vegetables. Further, the Department of Agriculture intends to provide a starter kit, Edible Landscaping (EL), containing assorted vegetable seeds, instructions for planting and sample design gardens for household implementation (Euromonitor International; Processed Fruit and Vegetables in the Philippines, November, 2022). In terms of the competitive landscape, Del Monte Pacific Ltd (Brand names: Del Monte, Today's and S&W), Itochu Corp (Brand name: Dole) and Dole Food Co Inc (Brand name: Seasons) were the leading processed fruit and vegetable companies in the Philippines, accounting for a combined 66.1% market share in 2022.

Processed meat, seafood and alternatives to meat

Processed meat, seafood and alternatives to meat was the largest packaged food category in the Philippines. The market grew considerably at a CAGR of 11.2% increasing from retail sales of US$1.8 billion in 2017 to US$3.0 billion in 2022. Processed meat was the largest of the processed meat, seafood and alternatives category with retail value sales of US$2.0 billion (66.1% market share) in 2022 and was the best performing category experiencing the largest increase in CAGR (11.7%) in the historic period, as retail sales increased from US$1.1 billion in 2017. Processed seafood was the second largest category attaining retail sales of US948.0 million (31.6% market share) in 2022, while the tofu and derivatives category value sales were lower as these products remained a niche category with limited product innovation in comparison to meat substitutes (products comprised of Quorn mycoprotein, soy or texturized vegetable protein), which have demonstrated their potential for growth through new product launches (Euromonitor International; Processed Meat, Seafood and Alternatives to Meat in the Philippines, November 2022).

The processed meat, seafood and alternatives to meat sector is expected to experience moderate growth with a CAGR of 8.0% during the forecast period as retail sales are anticipated to reach US$4.4 billion by 2027. Of note, processed seafood is expected to attain the largest increase in CAGR (9.7%) to reach US$1.5 billion in the forecast period as its affordability expands and product innovation continues, including seafood substitute products such as the brand unMeat Fish-Free Tuna Style Flakes, by Century Pacific Food Inc. Of note, Century Pacific Food Inc has launched several new product variants such as its limited-edition sardines, Century Portuguese Sardines in Piri-Piri Sauce and Century Portuguese Sardines in Olive Oil. (Euromonitor International; Processed Meat, Seafood and Alternatives to Meat in the Philippines, November 2022). San Miguel Corp (Brand names: Purefoods and Monterey), Century Pacific Food Inc (Brand names: Century, 555, Argentina, Ligo and Swift) and CDO Foodsphere Inc (Brand names: CDO and San Marino) were the leading companies in the processed meat, seafood and alternatives to meat category, representing a combined market share of 69.0%, while private label represented a 2.9% market share in 2022.

Rice, pasta and noodles

The rice, pasta and noodle category experienced positive growth obtaining a CAGR of 9.4%, increasing in retail value sales from US$906.9 million in 2017 to US$1.4 billion in 2022, despite the recent return to out-of-home lifestyles and the reopening of foodservice channels which has presented fewer opportunities for snacking occasions at home. Similar to other packaged food categories in the Philippines, the increase in retail sales in the historic period for the rice, pasta and noodle category can be attributed to increases in retail prices (Euromonitor International; Rice, Pasta and Noodles in the Philippines, November 2022).

Noodles was the largest segment of the rice, pasta and noodles category with retail values of US$996.8 million (70.1% market share) in 2022, increasing in CAGR by 9.4% from US$637.5 million in 2017, while pasta was the best performing category within the historic period, increasing in CAGR by 12.0% from US$118.1 million in 2017 to US$208.2 million in 2022, while experiencing annual growth of 12.3% from retail sales of US$185.4 million registered in 2021.

In the forecast period, the rice, pasta and noodle category are anticipated to increase by a CAGR of 4.9% to reach US$1.8 billion by 2027. Euromonitor International notes that during the forecast period, rice will remain robust since it is the main staple in the Filipino diet - despite the challenges branded packaged rice is facing from unbranded unpackaged variants, which are cheaper and more versatile. Of interest, rice substitutes such as Adlai rice, considered a superfood low in carbohydrates and glycaemic index and high in fibre, iron and calcium, has the potential to compromise the performance of rice as an alternate option, in the forecast period. (Euromonitor International; Rice, Pasta and Noodles in the Philippines, November 2022). In terms of competitive landscape, Monde Nissin Corp (Brand name: Lucky Me), JG Summit Holdings Inc (Brand names: Payless and El Real) and RFM Corp (Brand name: White King and Royal) were the leading companies, representing a combined market share of 64.2% while private label companies in comparison, represented a 4.7% market share in 2022.

Snacks

According to Euromonitor International, the snack market in the Philippines witnessed ongoing economic recovery supported by greater mobility, as most returned to work and school, which has assisted in sustaining growth post-pandemic. The savoury snacks and ice cream categories were the most dynamic categories reflecting the Filipino consumers craving for indulgence, despite their price consciousness to market products. In terms of channel developments, hypermarkets, supermarkets and small grocers accounted for the bulk of retail volume snacks however, e-commerce in most non-ice-cream categories, has experienced continuous momentum following the pandemic. In the forecast period, the snack market is expected to focus on greater consumer health and wellness properties, promoting functional qualities, added vitamins and plant-based snacks (Euromonitor International; Snacks in the Philippines, June 2023).

Confectionery

The Philippine confectionery market grew by an increase in CAGR of 2.1% during the 2017-2022 period, increasing in retail sales from US$672.0 million in 2017 to US$746.8 million in 2022. Chocolate confectionery, as a convenient and indulgent impulse snack, was the largest and best performing segment, expanding in CAGR by 4.7% from retail sales of US$343.7 million in 2017 to US$432.5 million (57.9% of confectionery market share) in 2022. Gum as a segment, declined in CAGR by 6.3% from 2017 to 2022 as budget conscious consumers limited discretionary and impulse purchases, while sugar confectionery experienced moderate annual growth of 7.9% from US$265.3 million in 2021 to US$286.2 million (38.3% of confectionery market share) in 2022, despite recent sale bans of sugar confectionery products in school canteens and stores within 100m of school premises, implemented by some cities (Euromonitor International; Sugar Confectionery in the Philippines, June 2023).

In the forecast period, confectionery is expected to expand at a CAGR of 7.2% reaching US$1.1 billion by 2027. With respect to competition, the Philippine confectionery market remained fragmented in the historic period. JG Summit Holdings Inc (Brand name: Jack 'n' Jill) was the largest confectionery company in the Philippines, accounting for a 39.1% market share, while Mondelez International Inc (Brand names: Cadbury, Toblerone, Halls and Clorets) and Mars Inc (Brand names: M&M's, Snickers, Doublemint, Juicy Fruit, Maltesers, Twix and Skittles), accounted for a 7.9% and 6.0% market share respectively, in 2022.

Ice cream

Ice cream experienced continued growth at a CAGR of 3.4% during the historic period attaining retail sales of US$386.0 million in 2022, as pandemic restrictions eased, and consumers pursued more active lives outside of the home. Family outings helped to reinforce the demand for take-home ice cream in particular, as this category was valued at US$203.4 million (52.7% of the market share) in 2022. Of note, plant-based ice cream was the best performing category, experiencing significant annual growth of 50.0% as retail sales grew from US$0.2 million in 2021 to US$0.3 million in 2022, benefitting those who preferred dairy-free (coconut milk, oat milk and soy milk) and healthier options (Euromonitor International; Ice Cream in the Philippines, June 2023).

The market is expected to expand at an additional CAGR of 8.4% between 2022 and 2027, reaching retail sales of US$578.2 million by 2027, as demand for impulse ice cream increases as more people are expected to be outdoors more often. In addition, the potential for product innovation through the introduction of unique flavours such as sampinit berries and/or hand-crafted ice cream options may prove beneficial for growth within the category (Euromonitor International; Ice Cream in the Philippines, June 2023). In terms of competitive landscape, Unilever Group (Brand names: Selecta, Cornetto and Magnum) was the prominent manufacturer in the Philippine ice cream market with a 64.4% market share, followed by Nestlé SA (Brand names: Nestlé, Drumstick and Lait) and Aice Group Holdings Pte Ltd (Brand name: Aice), reporting a 15.8% and 8.3% market share respectively, in 2022.

Savoury snacks

The savoury snack market increased by a moderate CAGR of 5.4% during the historic period, attaining retail sales of US$1.7 billion in 2022, as the improved economy associated with increased mobility of consumers post-pandemic, increased demand in the category, especially for those products purchased for children's school lunches (Euromonitor International; Savoury Snacks in the Philippines, June 2023). Salty snacks were the largest segment with retail sales of US$881.7 million (50.5% market share of the savoury snack category) in 2022 and experienced a CAGR of 6.2% as retail sales grew from US$651.6 million in 2017, while savoury biscuits increased to US$432.4 million (24.8% market share of savoury snack category) in 2022, improving 10.6% from US$390.9 million in 2021.

The savoury snack sector increased by 8.6% between 2021 and 2022 and is expected to experience moderate growth at a CAGR of 7.4% during the forecast period, reaching retail sales of US$2.5 billion by 2027. Nuts, seeds and trail mixes are expected to perform well in the forecast period led by increased consumer interest in wellbeing and immunity, particularly for those products containing natural and nutritional ingredients. As such, it is in the competitor's overall best interest to (further) develop healthier types of savoury snack product options such as vegetable, pulse and bread chips for example, in addition to providing baked, rather than fried product options in order to sustain and increase category growth (Euromonitor International; Savoury Snacks in the Philippines, June 2023). In terms of competitive landscape, JG Summit Holdings Inc (Brand names: Jack 'n' Jill and Granny Goose), Monde Nissin Corp (Brand names: Sky Flakes and Fita) and Liwayway Marketing Corp (Brand name: Oishi), were the leading companies representing a combined market share of 53.2%, in 2022.

Sweet biscuits, snack bars and fruit snacks

The sweet biscuits, snack bars and fruit snacks category experienced an increase in CAGR of 5.3% in the historic period, increasing from US$564.3 million in 2017 to US$729.1 million in 2022. Sweet biscuits represented the predominant segment of the category with retail sales of US$701.0 million (representing a 96.1% market share) in 2022 (as this item remained a popular product for return to school lunches), increasing in CAGR by 5.4% from US$539.0 million in 2017, while snack bars increased in growth by 3.6% as retail sales grew from US$2.8 million in 2021 to US$2.9 million in 2022, despite the products niche and pricier categorization (Euromonitor International; Sweet Biscuits, Snack Bars and Fruit Snacks in the Philippines, June 2023).

The sweet biscuits, snack bars and fruit snack market are expected to increase by a CAGR of 8.3% between 2022 and 2027, reaching retail sales of US$1.1 billion by 2027, as sweet biscuits is expected to remain the larger segment due to product variety and greater availability in modern and traditional channels. Fruit snacks in comparison, will experience retail sales growth primarily through the resurgence of tourism, as dried mangoes in particular, remain popular purchases for souvenirs or gifts. Relatedly, increase interest and demand for fruit snacks will be garnered by health-conscious consumers seeking nutritional snack options (Euromonitor International; Sweet Biscuits, Snack Bars and Fruit Snacks in the Philippines, June 2023). In regards to competitive landscape, the sweet biscuits, snack bars and fruit snack market in the Philippines is fragmented and led primarily by JG Summit Holdings Inc (Brand name: Jack 'n' Jill) and Monde Nissin Corp (Brand names: Nissin, MY San Grahams, Bingo, Cubee and Eggnog), representing a combined 43.7% market share, followed by Republic Biscuit Corp (Brand name: Rebisco and Frootees) with a 12.9% market share in 2022. The sweet biscuits market in particular, is further represented by JG Summit Holdings Inc and Monde Nissin with a combined 45.5% market share in 2022.