Following the recent and extremely successful food industry event in Bangkok, ThaiFex Anuga 2023, Asian Insiders partner for Thailand, Axel Blom discusses the size, scale and sheer opportunities of Thailand’s retail food industry, worth an estimated USD 67 billion in 2023.
Thailand is the second largest economy in Southeast Asia with a 2021 GDP of USD 506 billion and the country’s economy continues to recover well from the pandemic. Thailand is a world leader in a range of agricultural food products including shrimp, poultry, canned tuna, pineapple and other fruits, rice and sugar. As the Thai economy has grown, with an increasingly urbanised and expanding middle class the local population has enjoyed an increasingly international diet. The various Asian economies are moving towards interdependence and consumers are able to find a wider range and source of foods in their local supermarkets and convenience stores. Indeed, while traditional district wet markets remain the place for local people to obtain fresh produce and protein, locally-owned chains expand with supermarket outlets alone numbering around 500 – along with the more than 21,000 mini-markets and chain convenience stores dotting every suburb and district.
The pandemic and changes in the structure of Thai households stimulated by a rapidly changing economy have changed how Thais eat with a rising demand for food delivery services, ready-to-eat meals as well as increased demand for healthier food choices. While much of this has been driven by a growing urban younger professional market, Thailand also faces an aging population with the over-60’s soon to reach 27% of the total population in the next few years. This further adds to desire for a healthier diet with greater demand for less calories, less salt and sugar and an increased awareness of food ingredients on packaging.
The strong growth in food delivery, along with reducing in-store patronage has led to retailers using their stores as distribution and preparation points, with increasing competition around health, quality and presentation. Thailand offers a world-famous and distinctive cuisine and Thai people naturally gravitate towards this, however Bangkok and other major centres now hold significant numbers of foreign residents along with the 30 million+ annual visitors leading to a diverse food and hospitality environment. This along with the increasingly affluent Thai population has meant a growing taste for premium and gourmet products available through specialty importers and boutique channels, along with the large and growing number of world class restaurants in Bangkok, Phuket, Chiang Mai and other centres.
One good example of this is the surging growth in Norwegian seafood, particularly salmon that is flown into Thailand – over USD 300 million per annum and representing a significant shift from frozen to higher grade chilled imports. Similarly, Thailand’s tightly controlled liquor market still allows for some USD 60 million wine imports per annum and with the pandemic largely behind us, this is surging again.
There are three major conglomerates that dominate Thailand’s retail food market, Central Group, TCC Group and CP Group, each with associated importing divisions and branded retail chains, however there are an increasing number of independent importers that support other channels to market including online, boutique, premium and hospitality supply. There are several government agencies that regulate food imports into Thailand, including the Food and Drug Administration (FDA) of the Ministry of Public Health, the Department of Livestock (DLD) and the Department of Agriculture (DOA) of the Ministry of Agriculture and Cooperatives and the Thai Excise Department of the Ministry of Finance. Appropriate licenses and permissions must be gained before importing and sales is allowed.
Coming back to the recent ThaiFex event held in Bangkok, there were some 79,000 trade visitors over four days visiting over 3,000 exhibitors across 130,000 sqm of exhibition space. For the observant, trends presented that illustrate the continued evolution of the Thai retail food industry included opportunities in alternative proteins, organic and healthy foods, including a growing interest in superfoods, along with sustainable packaging, clean labelling and private labels as well as strong interest in whole new food concepts and franchises. The future for Thailand’s retail food industry is looking robust with an increasingly diverse and internationally oriented market for quality products supported by a sophisticated approach to food service. Thailand, lying at the demographic and logistical centre of Southeast Asia also is an ideal starting point for an expanding food supply business in Asia.
Thailand’s retail food industry represents major opportunities for international companies looking to develop a stronger market in Southeast Asia. For a no-obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com or Axel Blom, Managing Partner, Thailand, axel.blom(at)asianinsiders.com