Like so many nations in the Asia Pacific region, Thailand was adversely affected by the recent Covid-19 pandemic. However, despite these recent and significant challenges, the country’s food and beverage industry looks set to enjoy growth. In this article we’ll take a look at Thailand’s food and beverage industry; covering the main areas of production and manufacturing, whilst also considering the difficulties faced by the industry and how these are being overcome.
Thailand’s food and beverage sector
Thanks to varied and abundant natural resources, Thailand has long enjoyed a position as one of the leading agricultural suppliers in the world. The country has a well-developed and most advanced food processing sectors in the Asia Pacific region and it is this strength which enables Thailand to export value added products to overseas markets including Europe, the US, Japan, and China. Accounting for 23% of GDP, Thailand’s food and beverage sector is the country’s third largest, with a wide range of exports including canned vegetables, processed meat and dried fruit.
Food culture in Thailand
Food culture is incredibly important to Thais, and is widely seen of one of the cornerstones of the country’s identity. As specialist food and beverage recruitment consultants in Thailand, at Peak we have an in-depth understanding of the sector; including how the sector is particularly sensitive to fluctuations in consumer preferences and trends from overseas.
It looks as though the Covid-19 pandemic has only caused a temporary blip in the food and beverage sector’s growth, with the main influences upon its growth including several factors. Firstly, Thailand has a rapidly increasing and high penetration of mobile phone, social media and internet use. As such, consumers are increasingly exposed to the influences and experiences of family, friends, and colleagues, with wider access to information on the latest food trends. This has resulted in a steady increase in interest in imported foods which shows no sign of abating.
Dynamic urbanisation is also providing an important aspect of Thailand’s evolving food culture. Whilst this phenomenon is mainly concentrated around central Thailand and Bangkok, other areas are undergoing rapid development, particularly in the north of the country. This rapid urbanisation is, in turn, leading to an increase in dining out which has given the food service segment a further boost.
Thanks to Thailand’s worldwide image as a ‘global kitchen’, the country’s abundant food resources and diverse cultures have helped to shine an international spotlight upon its food and beverage industry. Although this has given Thailand a significant market advantage over other countries in the Asia-Pacific region, an underdeveloped logistics system is hampering the export of products to foreign markets. As a result, it is evident that there is likely to be ongoing demand for food and beverage industry recruitment in Thailand.
Lastly, Thailand has a growing ‘e-marketplace’, with pre-pandemic 2020 digital food and beverage industry revenues predicted to reach US$ 1.45 billion. However, despite the challenges of the pandemic, experts are still in agreement that Thailand’s annual growth rate from 2020-25 could reach up to 17% - a figure which would equate to one of the largest in the Asia Pacific region.
Although Thailand’s consumer trends vary little from their neighbours in the Asia Pacific region, the following have had an impact upon its food and beverage sector.
There’s no doubt that Thais are becoming increasingly health conscious and are paying more attention to the nutritional value of their food. Furthermore, problems caused by obesity continue to rise, low-carb and sugar free foods continue to perform well, potentially leading to an increase in food and beverage recruitment in Thailand.
The convenience foods segment is another which is enjoying growth as consumers demand ‘instant’ meals. Fast-food and convenience foods are performing very well in Thailand, with higher-than-average growth in comparison to other food product or service segments. Whilst this growth could be seen as contradiction to increased interest in healthier foods, the real trend is likely to be the consumption of ‘instant’ foods which are healthy and nutritious.
Alternative proteins such as insect or plant-based foods, although not a new concept for many Thai consumers, are enjoying increased growth. Soybeans, for example, have long been an important part of Thailand’s diet, however new meat substitutes are growing in popularity, such as insect-based proteins which offer as much as 50% healthy protein.
The largest food and beverage segments in Thailand
We’ve talked about changes to Thailand's food culture and consumer trends, but which are the country’s most important food and beverage segments? Bread and bakery goods are, by revenue, the biggest segment. In 2020 it was estimated that this segment would reach almost US$ 9 billion, however the market is currently saturated, resulting in low growth of 1.2% which is likely to last until around 2025.
Thailand’s seafood sector is the world’s third largest and one which exports 90% of output. However, because this sector is largely orientated towards exports, it is vulnerable to a range of factors which can limit its growth potential, including climate change, overfishing and trade policy.
In contrast, Thailand’s packaged foods sector is extremely fragmented, with one third of its total sales value controlled by the top ten countries. Furthermore, although the country’s meat segment generates just over US$ 7 billion per annum, its growth has slowed to 1.6% since as far back as 2015.
Soy sauce and fish sauce remain the pillars of Thailand’s domestic food consumption, with these products remaining at the top of the list of products by consumption. Consumption of pasteurised milk continues to increase, whilst the most popular meat products include chilled and frozen chicken. Frozen yoghurt and fruit juices are the most popular beverages in Thailand.
Last and by no means least, in terms of export foods, there are many agri-food products which have an important part to play in Thailand’s global trade. Products made from cassava account for a 67% share, with canned tuna in second place at 44%, tinned pineapple at 41%, and rice and sugar at approximately 20%.
Peak Recruit - food and beverage recruiters in Thailand
At Peak Recruit we specialist in recruitment in the food and beverage sector in Thailand. Thanks to our wide-ranging expertise, we can help you find your dream role or the talented individuals you need to ensure the success of your business. To find out more about our recruitment services in Thailand, please get in touch to speak to one of our food and beverage consultants.