Food and beverage market in Thailand 2012

CONTENTS
1 MARKET STRUCTURE
1.1 Market Overview
1.2 Market Drivers
1.3 Market Potential
1.4 Import Trends
1.5 Key Players in the Market
1.6 Regulatory
1.7 Sustainability
2 MARKET ENTRY AND DEVELOPMENT
2.1 Market Entry Strategies
2.2 Points of Differentiation
2.3 Long term strategic issues for exporters to consider
2.4 Distribution Channels
2.5 Pricing
3 MARKET RESOURCES AND CONTACTS

Market Overview
Domestic Production
Thailand has a rapidly growing food processing sector and is the only net food exporter in Asia, earning it the nickname “kitchen of the world”. Thanks to its rich agricultural resources and government incentives, which have encouraged diversification into more value-add products, Thailand has become one of the world’s largest producers and exporters of processed foods. Fifty percent of production is sold outside of the country.i
Its food and beverage processing industry is made up of over 10,000 companiesii and the Thai Ministry of Industry estimates the production of processed food to be more than 28 million tons annually. More than 80 percent of the raw materials used are sourced locally.

Thailand is the leading producer and exporter of rice, canned and frozen seafood, processed chicken, processed shrimp and canned pineapple.ii Other key food and beverage products include cassava, sugar, maize, fruit and vegetables, sauces and curries.

Thailand’s food exports were valued at US$24.38 billion in 2010, and are expected to rise to US$27.65 billion in 2011. Main export markets include the United States, Japan, Association of South East Asian Nations (ASEAN) and the European Union (EU).Thailand also has a well developed brewing industry.

Retail
Total retail sales for the food and beverage sector in Thailand were estimated to be US$13 billion in 2009.
The average Thai consumer spends US$150 per month on retail products, 49 percent of which is spent on fresh foods.
Competition in the food retail market is intense and modern retailers (hypermarkets, supermarkets and convenience stores) account for around 70 percent of total retail sales.
In 2010, there were estimated to be:
• 430 supermarkets (Central Food Retail, Leader Price)
• 360 hypermarkets (Casino, Tesco, Makro)
• 8,100 convenience stores (7-Eleven, FamilyMart, Tesco Lotus Express)

Hypermarkets account for around half of retail sales and are dominated by a small number of multinational players. Most hypermarkets and supermarkets also offer additional services, such as fast food outlets, kiosks and bookstores rather than being stand-alone stores. Convenience stores account for around 15 percent of retail sales.Wet markets are still popular in rural areas where people prefer more traditional diets and tend to be price sensitive.

The Thai government is looking to protect traditional and smaller operators from largescale foreign retailers. A new bill has been proposed, that would require retailers to seek approval from provincial authorities before setting up stores. However, this bill is still pending approval. The convenience sector is expected to benefit if the bill is approved, given that their smaller sized stores are likely to create less opposition from traditional retailers.