Food Consumption Trend: Turning Issues into Opportunities

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Food Consumption Trend:
Turning Issues into Opportunities
M Nasir Shamsudin Jinap Selamat Alias Radam Abdul Gh iff Ramin Abd l Ghariff R i Tay Yeong Sheng Ahmad Hanis Izani Abdul Hadi Presented at the Agribusiness Marketing Conference Organised by Federal Agricultural Marketing Authority 23 February 2010 With Knowledge We Serve

Trends i F d C T d in Food Consumption ti
Typical of developing economies Stages:
Initial increase in traditional staple foods Increase in non-traditional staples Diversification in consumption habits Increase in higher value, processed & higher proteins

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Trend in per capita consumption of meat, vegetables, and fruits increases, but consumption of rice reduces. Consumption of Meat per capita, 1990-03 (kg/capita/year) 60 50 k g /c a p /y e a r 40 30 20 10 0 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2002 2003 1991 2001 4 8 .8 4 8 .8 4 9 .2 5 0 .1 5 1 .3

Consum ption of Vegetables per capita, 1982-01 (kg/capita/year) 50 40 kg/cap/year 30 20 10 0 1982 1985 1988 Year 1991 2000 2001 27.3 32.0 34.8 35.5 35 5 39.3

4 5 .6

4 5 .6

4 5 .0

4 3 .4

3 4 .6

3 6 .4

Year

4 1 .8

4 3 .9

4 4 .5

40.6

Consum ption of Fruits per capita, 1982-01 (kg/capita/year) 40 35 30 25 20 15 10 5 0

Consum ption of Rice per capita, 1970-2005 capita 1970 2005 (kg/capita/year) 34.1

32.8 21.2 23.5 25.6 27.7

140 120 100 80 60 40 20 0

118.8

109.5

kg/ca ap/year

kg/cap/year

97.7

94.0

79.8

82.7

79.6

74.3

1982

1985

1988 Year

1991

2000

2001

1970

1975

1980

1985

1990

1995

2000

2005

Year

Sumber:FAOSTAT Source: www.agrolink.moa.my/jph/dvs

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As income increases, proportion spent on food to total expenditures declines…..away from home increases 1973* 1980* 1993/94 1998/99 2004/05

Total

45.1

35.4

35.6

35.1

33.6

At home

36.2

28.4

23.8

22.6

20.1

Away from home

8.9

7.1

11.8

12.5

13.5

* Peninsular Malaysia

Source: Department of Statistics Malaysia, HES, various issues

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Why changes in the trend of the food consumption patterns? Wh are the ? What h driving forces?

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The Driving Forces
Income growth Urbanization Gender Employment Race Age

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Income growth
Economic growth led to income growth a growth, growth, dominant force, has…… pushed up middle-class consumers’ purchasing h d iddl l ’ h i power generated rising demand for food, and t d ii d df f d d shifted food demand away from traditional staples and towards higher value foods. higher-value foods

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ASEAN: GDP per capita
ASEAN:GDP per cap, 2003 (USD)

GDP per cap

0

5,000

10,000

15,000

20,000

25,000

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The ratio of food processing value added to agriculture value added rises with income

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Implications of Income Elasticity
Consumption Patterns (from ξy )
Indicates signs of convergence towards western diet Higher income elasticity (ξy) for wheat-based products than for rice products Decline in per capita consumption of staple food ξy for meat, fish, fruit & vegetable items are high Demand f red meats i D d for d t increases more th white than hit meat as shown by their ξy.

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Implications of Price Elasticity
Consumption Patterns (from ξii) p ( Wheat-based, meat, fish, fruits are more price sensitive than vegetables & rice => staples are not price sensitive compared to non-staples

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Consumption Trend –
monthly per capita food consumption yp p f p

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Income growth...
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