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Consumer Spending Boosts Food and Beverage Companies on Forbes Asia's 'Best Under a Billion' List

The UBJ Desk

The UBJ Desk

— 3 min read
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Forbes Asia has released its much-anticipated 2024 Best Under A Billion list, spotlighting 200 top-performing small and midsized publicly-listed companies in the Asia-Pacific region. This esteemed list is featured in the August issue of Forbes Asia and available online. It highlights companies with annual sales ranging from $10 million to $1 billion, selected from a pool of over 20,000 listed entities. The selection is based on a composite score that considers financial performance, including debt management, sales growth, earnings-per-share growth over recent fiscal periods, and strong returns on equity.

Selection Criteria and Economic Background

Companies on the list were chosen based on a rigorous evaluation of their financial health and growth trajectory. The criteria included:

  • Debt Management: Assessment of how effectively companies manage and leverage their debt.
  • Sales Growth: Examination of growth in sales over the most recent fiscal one- and three-year periods.
  • Earnings-Per-Share (EPS) Growth: Evaluation of EPS growth in the same periods.
  • Returns on Equity (ROE): Analysis of the strongest one- and five-year average returns on equity.

The list emerges in a year marked by economic challenges, including geopolitical tensions and inflationary pressures. Despite these headwinds, the Asia-Pacific region showed resilience and growth in 2023, driven by robust domestic demand, increased infrastructure spending, and rising global trade. This positive economic environment has been particularly beneficial for sectors such as food and beverage, beauty, and semiconductors.

Sector Highlights

  1. Food and Beverage:
    • Growth: The food and beverage sector saw a significant increase, with 21 companies making the list this year—more than double the number from the previous year. This growth is attributed to a recovering consumer spending environment and an expanding middle class in the region.
    • Examples: Delfi, a Singapore-based confectionery company, and Sariguna Primatirta, an Indonesian bottled water producer, are notable newcomers reflecting this trend.
  2. Beauty Industry:
    • Renewed Interest: The beauty sector experienced a revival, with nine companies making the list. The rebound in consumer spending on personal care products has driven this sector’s success.
    • Examples: Specific companies are not listed, but this sector’s prominence indicates a broader trend of increased spending on beauty and personal care.
  3. Semiconductors:
    • Sector Adjustment: The semiconductor sector, which had strong representation last year, saw a reduction this year. The number of semiconductor firms on the list decreased from 14 to eight, reflecting a normalization as supply constraints eased.
    • Impact: The decrease in representation does not diminish the sector’s importance but indicates a shift in focus and recovery from previous shortages.

Notable Newcomers and Returnees

Newcomers:

  • Delfi: Based in Singapore, Delfi achieved a 13% revenue increase to $538 million. The company’s well-known confectionery brands, including Ceres and Goya, are sold in over 17 countries, with Indonesia contributing the majority of its sales.
  • Vadilal Industries: Founded in 1907, this Indian ice cream maker saw a 52% increase in net profit to 1.5 billion rupees ($18 million) and a 7% rise in revenue to 11.4 billion rupees. The company is expanding production to meet growing demand.
  • Sariguna Primatirta: This Indonesian bottled water company saw a 25% revenue increase to 2.1 trillion rupiah ($137 million) and a nearly two-thirds increase in net profit. The growth reflects the rising affluence of Indonesia’s middle class and their concerns over water quality.

Returnees:

  • Sappe: A Thai beverage company known for its fruit juices and coconut jelly drinks, Sappe is making its third appearance on the list. It reported a 33% revenue increase to 6 billion baht ($174 million) and is expanding its production capacity to meet growing demand.
  • Yankershop Food: Based in Changsha, China, this snack maker experienced a 42% revenue growth to 4.1 billion yuan ($576 million). The company’s investment in Chinese snack giant Mingming Henmang highlights its strategic growth and market expansion.

Legacy and Impact

The Best Under A Billion list, which began in 2002, has showcased many of Asia’s notable business success stories. Alumni include major tech firms such as Baidu, Alibaba, and Tencent; India’s Infosys and Biocon; and popular companies like Jollibee from the Philippines and AirAsia from Malaysia. These companies have significantly influenced their respective sectors and continue to set benchmarks for success.

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