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12 Dec 2019

Industry

Ready-to-Eat Food Market, 2020: Growing 3-5%...Adjustments to Market Conditions and Weak Consumer Purchasing Power Needed (Current Issue No.3060)

          We at KResearch view that turnover in the ready-to-eat food market may reach THB20.2-20.5 billion, increasing 3.0-5.0 percent YoY in 2020, thanks to the diversity of new products developed by related entrepreneurs as a result of heightened competition. Meanwhile, the domestic food and beverage market will likely grow only 2.4-4.4 percent YoY to THB2.46-2.51 trillion in 2020. 

             However, the ready-to-eat food market will be pressured by a number of factors amid weak economic conditions and consumer purchasing power. These include: 1) Changing consumer behavior, especially those in the labor market, towards becoming more price-sensitive. As a result, they may reduce purchases of ready-to-eat foods or switch to other types of food that are cheaper and have better value for the money, such as instant and street foods; 2) Slower sale growth seen at convenience stores, being an important sale point for ready-to-eat foods; 3) rising operating costs as prices of food raw materials will likely be driven by drought and the increase in daily minimum wages, effective January 1, 2020 nationwide; and, 4) A likelihood that the government will impose a tax on foods containing high sodium levels, which may include ready-to-eat foods. If so, this will make it harder for related entrepreneurs to manage costs and marketing activities.                To brace for such challenges, they are urged to introduce new products, with prices that are more affordable in order to penetrate consumers in the large labor market



Industry