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Sweet Prospects for Thailand's F&B Sector

Source:Ringier Release Date:2011-06-20 743
Food & Beverage
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AS ONE of the top developing nations in the region, Thailand is expected to be one of the crucial product development and marketing engines in Southeast Asia over the coming decade. With the number of tourists, single person households and baby boomers on the rise, the demand for foods outside the home has intensified and has been accommodated by a growing foodservice industry.

The major driving force for Thailand's economic growth in 2010 is the government's spending through the economic stimulus programmes such as Thai Khem Kaeng (Strong Thailand 2012) with a total budget of $11 billion mainly for infrastructure projects and other measures to encourage consumer spending and stimulate demand. It is expected therefore that Thai economy will continuously to expand at the normal range of 3.5-4.5 per cent in 2011.

 

The retail sector is a vital component of the Thai economy, and the total value of food and beverage expenditures is expected to grow to about 26% by 2015

 

Strong purchasing power is also expected due to wage increases. The government has a policy to match the salary of government officers and politicians to the level of corporate employees within five years and the cabinet approved an increase in salaries of 5-10 per cent, which were to be effective by April 2011. The unemployment rate was reported at 1.54% in May of 2010.

The total value of food and beverage expenditure in Thailand is expected to grow to about 26% by 2015. Although dining out is becoming increasingly popular, especially amongst younger generations, there is a general preference amongst Thais to cook at home rather than eat out. Thus, the retail food market accounts for about 70% of total spending on food and beverages, whilst food service accounts for the remaining 30 per cent.

Urban consumers usually purchase their meals on the go, buying prepared meals from street shops or fresh markets. Cooking is conducted on occasion, most commonly at dinnertime and over weekends. However, the 51.6% increase in fresh food consumption is indicative of the fact that cooking is becoming more popular in Thailand. Whilst most Thais prefer to eat their meals from street shops or restaurants near their workplace or homes, the 2008-2009 financial crunch has caused many Thais to retreat to the more  cost effective means of cooking meals at home.

 

Retail sector

Thailand represents one of the most attractive food and drink markets in the Asia Pacific region. The country's retail sector is a vital component of the Thai economy and retail sales in is predicted to continue growing despite concerns surrounding the world economic downturn and domestic political uncertainty.

Modern retail formats, such as hypermarkets, supermarkets and variety stores, are becoming increasingly popular for their convenience and wide product range, especially in urban areas where about 90% of Thai shoppers visit hypermarkets at least once a month. This presents many opportunities in the area of packaged and processed foods, especially chilled and frozen foods, as new hypermarkets, supermarkets and convenience stores are established throughout Thailand. Nevertheless, traditional markets remain important for the purchase of fresh produce. Thai consumers are very price conscious, and will often make their agri-food purchases based upon price more than anything else. In fact, less then one third of Thai consumers make their purchasing decisions based upon brand.

Retail sales accountedMercurial X Proximo

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