The Malaysia Food and Beverages Industry (F&B) is identified as a fast-growing market and one of the main contributors to the national account. In 2018, the Malaysia F&B Industry was valued at around €22.12 billion, growing annually at a rate of 7.6%. The F&B industry in Malaysia is very diverse with a wide range of processed food for Asian taste and dietary preference as well as many western recipes. This industry is predominantly dominated by small and medium-sized companies (SMEs). Besides SMEs, many foreign and MNCs companies are manufacturing processed food products in the country too. The F&B sector is very diverse including cocoa and chocolate products, fishery products, cereals and cereal products, processed fruits and vegetables, confectionery, food ingredients, herbs and spices, beverages, animal feed, and others. Malaysia is heavily dependent on the importation of many staples such as rice, meat and seafood products for domestic consumption. Many raw materials, such as dairy milk and wheat are imported for further production and export. Identified key F&B sectors are as follows: The F&B services that are certified Halal by the Department of Islamic Development (JAKIM) are known to have higher market opportunities owing to the vast majority (60%) of the Muslim population. The F&B distribution market is highly fragmented due to a large number of similar products and players in the market. The channel of distribution includes small-scale retailers (e.g. hawker, convenience store, peddler and market stall), large-scale retailers (e.g. department store, supermarket, hypermarket and shopping centre), and e-commerce platform, i.e. online shopping platforms that are growing in popularity tremendously especially during the COVID-19 times.

In 2020, the COVID-19 pandemic has triggered the Malaysian Government to take more drastic action in addressing the food security issue and food supply chain disruptions problems accounting to heavy reliance on imports. The pandemic has also accelerated the growth of E-commerce industry as the number of online shoppers that opt to switch from physical shopping to online purchasing is increasing. This trend has also triggered the Malaysian retailers’ business to transform and embrace digital marketplaces. It is difficult for many SMEs to capitalize on this new trend as many of them struggle to implement efficient production performance which is considered as the primary contributor to inefficient local production and indirectly affect the cost of goods and services.