The sausages and salami market in Asia Pacific was valued at 7.55 billion USD in 2015. Until 2019, it grew at a compound annual growth rate (CAGR) of 2.72% and reached 8.99 billion USD.
Although sausages and salami are not among the primary food products in Asia Pacific, consumer interest in sausages has grown. The convenience they offer to increasingly time-pressed consumers is among the main drivers of demand for processed and ready-to-eat food.
While the sausages and salami market in the region is still maturing, more and more local consumers eat sausages at least several times a month. Asia Pacific holds a lot of potential as sausages become more popular and consumption levels continue to increase.
Impact of COVID-19 on the Market
Most Asia Pacific meat companies have seen no major disruptions along the supply chain due to the COVID-19 pandemic. However, the reduced consumer spending power and demand has had a substantial impact on local meat companies.
As a result, the consumption of poultry and pork in countries like India and Thailand has significantly decreased. Thus, seriously impacting the entire meat industry. Тhe proliferation of false news reports that the virus spreads through meat has also contributed to modest consumption.
Restaurants, bars, and other food outlets were severely impacted by containment measures, as governments around the region enforced lockdowns. Thus, sales of sausages and salami at restaurants and other food establishments have dramatically fallen.
At the same time, some consumers began stocking up in an attempt to self-isolate. As a result, there was a rush in many retail stores due to consumers seeking to supply themselves with essential items.
Particularly in Australia, demand for meat through retail has surged because consumers were forced to eat their meals at home. Sausages and salami is a staple and affordable protein food due to which demand has been strong. The sausage category has significantly contributed to the recent increases in fresh meat sales in the domestic market.
Sausage Casings
The sausages and salami market is closely linked with the casings market. Sausages used to be produced with mainly naturally available casings such as the intestines of pigs, sheep, goats, and cattle. Today, sausage casings are also made from film-forming polymers, using collagen or cellulose, which can be either consumed or discarded. Casings can also be produced from plastics such as polyamide, polypropylene, and polyethylene.
Over the past few years, the regional market has witnessed a shift away from natural casings from pig intestines, partially due to regulations over African Swine Fever (ASF). The religious sentiments over pork and beef intestines were also a crucial factor for producers' choice to use alternative options.
Most pig intestine casings in the region usually come from China. However, the country has been suffering from a devastating outbreak of ASF. That has forced many meat processors in Asia Pacific to seek animal casings from suppliers within and outside the region.
The ASF outbreak also forced companies to use more sausage casings made with cellulose and collagen. Due to these considerations, the Department of Veterinary Services in Malaysia banned all sausage casings originating from China, Poland, Russia, Hungary, Moldova, and Ukraine.
As a result, manufacturers in Asia Pacific increasingly use sausage casings made from collagen and cellulose. Collagen is the preferred option for premium sausages, while producers opt for cellulose for lower market segments.
Vietnam, Thailand, and Malaysia are the countries where collagen casings have gained significant popularity. Consumers in these countries show a growing interest in Western-style smoked sausages and are also more willing to pay a premium for them.
In response, more processors use collagen casings, which are also a healthier option. The sausages and salami market in the Philippines, and the premium segment, in particular, recorded substantial growth until 2019. That resulted in the widespread use of cellulose and collagen casings.
However, for most small companies, natural and locally produced casings remain the most common option. Companies in Indonesia, Bangladesh, and India use cellulose casings the most. That is due to the smaller premium market and the larger share of the middle-low segment.
Meat Consumption in Asia Pacific
A crucial consideration in the Asia Pacific sausage and salami market is the large number of vegetarians in the region as India, Indonesia, and Sri Lanka are among the largest vegetarian markets in the world.
Vegetarianism is a part of the region’s culture and is linked to some extent with Buddhist beliefs. What is more, the share of vegetarians in Asia Pacific will continue to grow, propelled not only by religious considerations but also by environmental and health concerns.
However, meat consumption varies significantly across countries in terms of both quantity and type. For instance, many people are vegetarians in India, while Hong Kong has a considerable per-capita meat consumption in volume terms.
In China, Vietnam, and South Korea consumers increasingly opt for pork. In Malaysia, most people prefer chicken meat.
Pork consumption in China was severely affected in recent years by several supplier safety scandals. The popularization of public health campaigns that encourage consumption of lower fat protein options also played a role.
Similarly, poultry has also witnessed some issues owing to recent bird flu epidemics. Thus, beef and veal have become the fastest-growing meat categories in volume terms in China.
The number of vegetarians in Australia has also grown. The country ranks among the top three fastest-growing vegan markets worldwide. Although Australia has long been considered a meat-loving country, health and environmental concerns have changed a significant part of the population’s attitude towards meat consumption. With the growing appetite for meat-free products, the domestic market has observed a rise in vegetarian and vegan-friendly product launches.
Sausage Meat Alternatives
Cell-cultured Meat
Motivated by many factors, companies have begun to dedicate resources to create viable alternatives to meat. Research and development of cell-cultured meat have manufactured promising alternatives to slaughtered meat.
Cell-cultured meat or lab-grown meat is produced from a live animal’s cells without the need for slaughter. While the technology is still at a nascent stage, Asian consumers are becoming more open to meat alternatives. Although there has been extensive research on cell-cultured meat in recent years, there are still some crucial challenges it will face in the coming years.
Plant-based Meat
Plant-based meat is another strong competitor in the sausages and salami market in Asia Pacific. There is an increasing number of new innovators, who enter the area of plant-based food and disrupt the meat industry.
Companies attempt to change consumer perception by providing a viable meat substitute, which can be superior in terms of nutrition, taste, and texture. Producers target not only vegans and vegetarians but also place effort to attract meat-eaters.
For instance, Impossible Food, a Californian start-up company in the plant-based meat segment, recently stepped into the Asian market by launching its Impossible Burgers in Singapore.
In the beginning of 2020, the company also debuted its two new meat-free products, namely Impossible Pork and Impossible Sausage. Impossible Food also aims to gain halal certification for its new products, enabling the company to target people with religious objections.
Beyond Meat is a competing plant-based meat producer that also shows interest in Asia Pacific. In 2019, the plant-based protein brand partnered exclusively with the vegan fast-food chain Lord of the Fries to launch its Beyond Sausage in Australia. As of 2020, the company has been offering plant-based meat, including sausages in Singapore, Taiwan, and Hong Kong.
While the plant-based meat industry matures, companies will face numerous challenges that will hinder development. However, as more people reduce their meat consumption to mitigate the effects of environmentally destructive animal agriculture, meat alternatives will continue to grow.
