Salty snack food

 

 

Introduction

 
  • Snack foods are popular in Thailand. 
  • The market consists of a mix of traditional snacks and western products.
  • Retail sales of snack foods were growing at a healthy rate of 27% per annum immediately before the economic crisis. 
  • The market suffered during the years of the economic recession contracting by 20-30%. 
  • Recovery was registered in 1999 with an annual growth of 8%. 
  • The market has enormous potential for growth with present per capita consumption of all snack food only 1kg/person/yr.
  • The snack food sector is dominated by local manufacturers who also export a significant portion of their production. 
  • Snacks are also imported, but their contribution remains only a small proportion of the overall market.
  • Domestic firms pursue aggressive marketing strategies.
  • Snack sales have benefited from improvement in the distribution system which has opened the rural markets.
  • The market is well represented by MNC's producing locally through their Thai subsidiary (usually a JV with a local company).
  • This is a price sensitive market with a consumer base of children and teenagers.
  • Some imported snacks are able to compete with locally made products – these are in the high end segment, for example Pringels (Procter & Gamble, USA).

Description
  • The salty snack market is fragmented and segment definitions open to interpretation.
  • Core product segments:
    • Potato chips  (30% salty snack market)
    • Extruded snacks: (27% salty snack market)
      • Potato
      • Prawn
      • Rice crackers
    • Peanuts – (14% salty snack market)
    • Fish snacks (12% salty snack market)
    • Prawn crackers (10% salty snack market)
    • Cuttlefish snacks (4% salty snack market)
    • Popcorn (3% salty snack market)
  • There are over 200 brands of snack food available in Thailand.
  • Before the economic crisis sales of chips enjoyed the highest annual growth increasing over 60% from 1993 – 97.  Over the same period, extruded snacks grew 25% and nuts 10%.

Size
  • The snack food market is composed of:
    • Salty snacks such as potato chips - 60 per cent total snacks market. 
    • Biscuits - 16 per cent total snacks market. 
    • Chocolates - 10 per cent total snacks market.
    • Candy products  - 14 per cent total snacks market.
  • The total snack market is valued at Bt 15 billion (1998).
  • The total sales value of salty snack products in 1998 was stagnant between Bt 8.5 billion and Bt 9 billion compared to 1997, while the consumption in tonnage dropped by between 20 and 30 per cent from 62,000 tons in 1997 to only 41,000 tons 1998. 

Major players

Potato Chips

  • Frito- Lay Thailand
  • United Foods Public Co. Ltd.
  • Siam Snack Co Ltd

 Extruded snacks

  • Useful Food Co. Ltd.
  • Frito- Lay Thailand
  • Friendship Co Ltd

 Peanuts

  • Mae-Ruay Snack Food Factory Co Ltd.
  • BB Snack Co. Ltd
  • Tong Garden Co. Ltd.

 Prawn Crackers

  • Friendship Co. Ltd.
  • Calbee  Tanawat Co. Ltd.
  • Laem Hong Food Industries Co. Ltd.

 Cuttlefish snacks

  • T. Thai Snack Foods Co. Ltd.

 Popcorn

  • United Foods Public Co. Ltd 

Raw material issues
  • The main player in the Potato sector has its own potato contract farming system, which it expanded by almost 50% last year to 40,000 rai.  This is mainly in the northern provinces.
  • The company is also trying to establish a contract farming system for maize. 

International trade
  • Trade is restricted within the region.
  • Thailand is rapidly becoming the snack production base of Indo China.
  • Exports to: China, Vietnam, Cambodia, Laos, Singapore, Malaysia, Myanmar, Hong Kong, and China. 

Trends/ recent news
  • To offset rising production costs, producers are decreasing their packet size rather than increasing price.
  • Recent growth in this sector has been driven by the improved economic situation and more aggressive marketing by major snack players.
  • Frito-Lay has injected between Bt170 million and Bt180 million this year to stimulate domestic snack consumption.
  • The extruded products are now limited to traditional sales outlets.
  • Domestic consumption of potato chips was flat in 1998 because potato output was limited in the planting areas.
  • There is a huge potential for the extruded snack segment, which is now under-developed in terms of product innovation and development of modern distribution channels. 

 

[Canned tuna] [Yoghurt] [Salty snack food] [Instant noodles] [Canned pineapple]
[Candy] [Thai agrifood] [Food industry] [Agriculture]

 

 

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