Top Trends Driving Malaysia’s Food & Beverage Market in 2023

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Food forms a massive part of Malaysian culture. With this in mind, let’s dive into some of the top trends shaping Malaysia’s food and beverage market, and the opportunities specific to Australian exporters.

  1. The Rise of the Sustainable Consumer

Reflecting broader global trends, sustainability has become an important consideration for the Malaysian consumer. This has translated into greater demand for organic foods, plant-based foods and eco-friendly products. Regarding organic foods, driving forces behind demand include both worries about the environmental impacts of pesticides, and, at the same time, the impact of genetically modified ingredients, antibiotics and hormones on consumer health. 

The second arm of sustainability trends is the growing interest in plant-based foods, which is prompting retailers and foodservice venues alike to tweak their offerings to cater for this trend. In fact, categories such as plant-based meat are seeing significant growth above 6.00%, especially meat tofu, which is widely popular due to Malaysia’s majority Muslim population. In response, retailers such as Village Grocer and Ben’s Independent Grocer are offering a variety of plant-based brands. Finally, Malaysian consumers aren’t just concerned about the products they’re consuming, but also their packaging. This is propelling food brands in both retail and foodservice to swap out nasty plastics for eco-friendly, recyclable materials.

2. Convenience Driving Demand for Packaged Foods

With many impacts of the pandemic being left in the past, consumers are returning in droves to school and work. As such, consumers are becoming increasingly time-pressed. So, they’re looking for convenient, packaged foods that they can throw in their backpack and take with them on-the-go. Plus, prepared meals are also in high demand, with consumers looking for simple meals solutions which they can simply pop in the microwave or oven to eat within minutes. As a reflection of these trends, Malaysia’s prepared meals segment is set to surpass a CAGR of 7.00% over the next five years to 2027. Other notable areas of growth in the convenience foods space include frozen foods, pasta and noodles, and soups, all of which will see compound annual growth rates above 7.50%. Consumers are also much more likely to order food for takeaway or delivery, and eat out, than their global counterparts, with over 50% doing so at least once or twice a week, while the tendency to cook or bake is significantly lower than the global average due to time constraints.

3. Health Concerns Boosting Health Food Sales

It’s no surprise that healthy foods are once again making the list for the top food trends to watch in Malaysia. This is largely a result of the pandemic, but health-consciousness is also being boosted by the rising obesity rate. With one in two adults being overweight, and the growing prevalence of chronic illnesses like diabetes, of which Malaysia has one of the highest rates in the Western Pacific region and globally, this comes as no surprise. These health concerns are driving the growth of many free-from and healthier food categories, including low-calorie foods. In particular, 44% of Malaysians are aiming to boost their health and wellness spending in the coming year, and 44% are also willing to pay more for healthier foods. Alongside the rise in lifestyle-related diseases, demand for gluten-free food is also becoming more prevalent, with bakeries such as Fresco Grano observing rising demand for gluten-free products not simply from gluten-intolerant consumers, but also those looking to cut down on carbs. In fact, supermarkets such as Jaya Grocer are already stocking Australian gluten-free brands such as Yes You Can and Orgran. Other notable health trends include demand for gut-friendly, immune-boosting and organic foods.

4. A Strong and Stabilising Economy

According to Bloomberg, Malaysia’s economy is among the 13th fastest-growing Asian economies! Following an unexpectedly strong recovery in 2022, with the economy experiencing a 7.8% growth rate–the fastest rate in over two decades–Malaysia’s economy is set to stabilise and slow in 2023. In the last year, labour market conditions improved considerably, with the government boosting the minimum wage, contributing to higher consumer spending. This has supported greater demand for premium foods as well as organic, natural and fresh foods which typically come with a higher price tag.

Malaysia’s central bank has predicted a 4-5% expansion for the coming year, with the slowdown a reflection of both unexpectedly high growth in 2022, as well as a potential mild global recession. Even alongside this slower growth, consumer spending is set to remain relatively stable, driven by residual savings from economic stimulus measures and lockdowns due to the COVID-19 pandemic. An anticipated rise in inbound tourism following Malaysia’s re-opening in April 2022 is set to further support consumption. Malaysia’s inflation rate also remains comparatively stable in regional and global terms while the government introduces initiatives to reduce the cost of living and maintain spending, however rising food prices are impacting households, especially those on the lower-end of the income ladder. 

5. A Strong Trading Relationship With Australia

Australia’s trading relationship with Malaysia is defined by a series of free trade agreements–both bilateral and multilateral–which have already supported a variety of Australian F&B brands in entering the market. The Malaysia-Australia Free Trade Agreement (MAFTA), which has been in place for just over 10 years, has made Australian goods more competitive in Malaysia by reducing and eliminating tariffs on 99% of goods, and simplifying non-tariff barriers like import licensing requirements and declarations of origin. On a multilateral level, the ASEAN-Australia-New Zealand FTA (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership Agreement (RCEP) complement MAFTA, offering tariff reductions across the various regions as well as reductions in non-tariff barriers.

6. Demographic Trends Driving Interest in Global Brands

When it comes to demographics, Malaysia has quite a bit in common with Australia! A total population of 32.16 million creates a consumer base only slightly larger than that of Australia, while population growth is on-par with Australia at 1.3%. While Malaysia is slightly less urbanised, with an urban population of 76%, its population is comparatively younger than Australia’s with a median age of 30.3 years creating a young population with growing disposable incomes. This young consumer base may explain the fact that most consumers agree that imported products are higher quality than local goods, especially when it comes to categories such as baby food and confectionery. As such, due to these country-of-origin effects, the demand for imported goods is higher amongst Millennials and Generation Z. And as their disposable incomes rise, this is good news for Australian premium F&B exporters.

7. Foodservice Sector Heating Up Post-COVID-19

Following a growth rate of 22% in 2022, Malaysia’s F&B industry is set for further growth of 8% in 2023. In particular, there’ll be a spotlight on the foodservice sector following years of closures and lockdowns which have spurred pent-up demand. With many of the impacts of the pandemic behind us, Malaysia’s restaurant and cafe scene is heating up! Among the key developments include the arrival of the Michelin Guide, a focus on sustainability and transparency in line with broader consumer trends and the rise of coffee culture focusing on high-quality, well-crafted coffees. As local and international tourism (especially from China) makes its comeback, many F&B providers have already upgraded and transformed into high-end eateries to appeal to tourists and locals alike. While the return to eating out will be key, delivery remains popular, with food delivery services like GrabFood and FoodPanda expected to continue reaping the benefits of consumers’ desire for convenience.


As we’ve seen, the Malaysian market offers a significant opportunity for Australian F&B exporters. Malaysia’s strong and stable economy continues to support consumer spending, with the return of tourism and residual savings built up during the pandemic expected to support spending in the coming months. Malaysia’s trading relationship with Australia, fortified by several free trade agreements including the Malaysia-Australia Free Trade Agreement and the ASEA-Australia-New Zealand FTA, also enhances the opportunity through minimising tariff and non-tariff trade barriers.

From a consumer standpoint, the demand for sustainable foods, including organic, plant-based and eco-friendly packaged foods is an exciting space. Convenience trends are also driving growth for various food categories, while the health food space is also set to grow following rising health-consciousness and the prevalence of lifestyle-based diseases. Meanwhile, Malaysia’s Millennial and Generation Z population–with their rising disposable incomes–are supporting demand for premium imported foods. The pent-up demand for foodservice offerings is also set to contribute to overall F&B industry growth in 2023 as locals and tourists alike flock to restaurants and cafes for their food fix.

We hope you’ve found these insights on the Malaysian market helpful. As always, if you’ve got any questions or want to discuss export opportunities for your company, feel free to drop us a line at Export Connect – we’d love to hear from you.