Food and beverage market in Malaysia

Malaysia has a rising middle upper income population and has strong GDP forecasts with food and beverage sales expected to grow in the next three years to US$21.17 billion.(i)

Malaysia has ambitions to be the main halal hub for the world and this may provide opportunities for New Zealand meat exporters. New Zealand has a strong image for food safety and quality but needs to educate the Malaysian population more about its products.

Market structure

  • Malaysia has a packaged food industry worth US$5.5 billion in 2011, led by dried processed food, dairy and bakery and is forecast to grow to $5.9 billion by 2016. (ii)
  • Hong Kong's Dairy Farm, owner of Cold Storage, Mercato and Giant supermarkets, is the market leader in food retail taking more than 10 percent market share, followed by Tesco and Carrefour. Two domestic retailers, The Store and Mydin are growing and becoming serious competitors.
  • Malaysians have the largest daily intake of fish and seafood consumption per capita among the ASEAN group of countries, importing one third of its supply. Fish and seafood sales have increased at modern retailers for younger shoppers, though wet markets still dominate.
  • Malaysia's population of 27.7 million is 65 percent Malay, 27 per cent Chinese and eight percent Indian. The Malays are predominantly Muslim and have a strong consumer demand for imported beef, mutton and halal products.
  • Indulgence products, such as chocolate, ice cream and snack bars are in increased demand and supermarkets are expected to step up their ranges as manufacturers invest more in this area. (iii)
  • There is an increasing market share of supermarkets in the grocery retail sector and the supermarkets have a growing number of cheaper private label ranges following the global financial crisis.(iv)

Growth drivers

  • The Malaysian food and beverage retail market is expected to grow by 10 per cent per annum with Malaysian households spending almost a quarter of their incomes on food and beverages.
  • Malaysia has a more urbanised population and more women are working which is leading to a greater demand for packaged food, largely sold at supermarkets.
  • The health properties of food are important to Malaysian consumers and in recognition of this, Fonterra Brands for instance, has offered a free health scan and nutrition check for families.(v)
  • Demand for more expensive wines is expected to rise among middle and high income Malaysians as they become more familiar with them. Red wine is perceived as a healthier alternative to white.
  • New Zealand 's beef exports to Malaysia are expected to increase as a result of the Malaysian and New Zealand governments' 2011 bilateral arrangement setting out how New Zealand can meet Malaysia's halal requirements.
  • The Malaysian Government is planning to develop its food processing industry, specifically halal food products, which have the potential to expand into international markets. New Zealand meat exporters may be able to cooperate with the Malaysian food industry and participate in this global plan.

Import trends

  • The bulk of Malaysia's imports are food ingredients rather than packed product because Malaysia has its own processed food and drinks industry for the local and international market. Main imports are unprocessed cereals, edible oils, cocoa, sugar and fish and seafood. (vi) from regional neighbours such as Indonesia, Australia, Singapore and China.
  • Malaysia was New Zealand's 8th most important food and beverage market in the year ended 2011, representing a market of NZ$640 million and in the last year New Zealand's food and beverage exports grew by 14.6 percent.
  • New Zealand's top imports to Malaysia in food and beverage, were milk and cream, sheep and goats' meat, butter and other fats, malt extract, meat of bovine animals and preserved or prepared vegetables.(vii)
  • New Zealand was the fourth most significant supplier of meat to Malaysia in 2010 supplying 11 percent of all imports.
  • Australia is Malaysia's biggest wine supplier of the US $51 million wine imports in 2010, followed by France and Chile. New Zealand wines are distributed mainly to four and five star hotels and restaurants and a small amounts to supermarkets and wine shops.

Market entry and development

Market entry strategies

  • If New Zealand businesses are exporting processed foods with meat content to Malaysia, they need halal certification from JAKIM, the Malaysian Government's halal certifying organisation or by halal certifying bodies recognised by JAKIM such as the New Zealand Islamic Meat Management (NZIMM). Having a JAKIM logo gives a marketing advantage so NZ businesses might consider joint ventures with local Malaysian companies as JAKIM will not issue halal certifications to overseas processing operations though it will certify overseas abattoirs.
  • If selling into Malaysia's food retail, New Zealand businesses should have regular marketing campaigns with food sampling sessions, in-store promotions and giveaways. For NZ wine exporters, tasting sessions and media are best done jointly with an importer and a hotel or restaurant.
  • While NZ lamb is well known, marketing strategies are needed to help inform the population of NZ beef's qualities.

Regulatory information

NZ exporters are advised to consult closely with their importer or distributor before starting up in Malaysia.

The Ministry of Health is responsible for the production and sale of foodstuff regulations.

The Food Act 1983 and Regulations 1985 prescribe standards, labelling, date marking and the use of additives and preservatives.

Tariffs on 99.5 percent of New Zealand's current exports to Malaysia will be gone by 2016 under the free trade agreement involving the ASEAN group. For more information go to www.mfat.govt.nz

With a large Muslim population, labelling requirements for pork products and alcohol are very strict. See the USDA Malaysia Food and Agricultural Import Regulations and Standards (FAIRS) report.

Market resources and contacts

Government 

Malaysia Government  

Malaysia Ministry of International Trade and Industry (MITI) 

Department of Agriculture Malaysia 

Industry 

Halal Development Corporation Sdn Bhd 

Trade Events

Malaysia International Gourmet Festival

Sources

(i)Business Monitor International, November 2011, Malaysia Retail Report
(ii)(Euromonitor International: Current Market Insight (November 2010) Packaged Food - Malaysia (iii)Euromonitor International:Country Market Insight(November 2010) Packaged Food-Malaysia
(iv)Euromonitor International: Country Market Insight (November 2010)Packaged Food Malaysia.
(v)Euromonitor International: Country Market Insight (November 2010)Packaged Food 2010
(vi)USDA Foreign Agricultural Service, 2010. Malaysia Retail Foods.(gain.fas.usda.gov
(vii)Statistics NZ, via The World Trade Atlas, International Trade Centre, Trade Map

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