Thailand Food and Drink Report Q3 2012

Cooling external demand and deteriorating global economic conditions would inevitably take their toll on consumer confidence in the near future. Moreover, as uncertainties over the outlook for employment in export-related sectors continue to weigh on sentiment and prompt households to cut back on spending, we believe private consumption growth should remain relatively muted over the coming quarters. In the longer term, the positives of a massive youth population, strong economic growth and rising incomes will remain major draws for foreign consumer goods investors. This potential will continue to attract the sights of consumer players such as Meiji Holdings, Fraser and Neave and Mai Tan, which should instil greater dynamism to the sector going forward. Headline Industry Data (local currency) ?? 2012 food consumption growth = +4.1%; compound annual growth rate (CAGR) forecast to 2016 = +5.0% ?? 2012 soft drinks value sales growth = +7.0%; CAGR forecast to 2016 = +7.1% ?? 2012 alcoholic drinks value sales growth = +4.9%; CAGR forecast to 2016 = +4.3% ?? 2012 mass grocery retail sales growth = +5.6%; CAGR forecast to 2016 = +5.1% Key Industry Trends Pursuing Growth Beyond Thailand: Thai food company Charoen Pokphand Foods (CP Foods) is reportedly preparing a GBP2.5bn (US$4bn) bid for fish finger manufacturer Birds Eye, a part of frozen food group Iglo. The first round bids have also been submitted by private equity investment firms Blackstone and BC Partners, although reports suggest that CP Foods is likely to acquire Birds Eye. Moreover, CP Foods has recently acquired a 74.18% stake in Vietnam-based feed business and agribusiness services firm CP Pokphand, further bearing out its overseas expansionary ambitions.

Japanese ingredients producer Ajinomoto recently announced that it has set up a sales company in Bangladesh in August to sell seasonings and processed foods to local consumers. This investment forms part of Ajinomoto’s broader strategy of growing its footprint across international markets with a particular focus on emerging markets (EMs) in the Middle East, Africa and South Asia.

Tesco’s Impressive Debut Reflects Investor Confidence In Thai Retail – In Thailand’s biggest initial public offering (IPO) since Rayong Refinery ’s US$710mn listing in 2006, UK mass grocery retail (MGR) giant Tesco ’s property fund surged by more than 10% on its trading debut on March 19 2012, allowing it to raise capital funds of around THB18.4bn (US$600mn). Tesco’s strong debut performance comes against the backdrop of a softened demand environment, and our broadly cautious outlook on Thai equities, and these headwinds have certainly not quelled investors’ desire to jump on the Thai retail bandwagon. The dynamics of rising incomes, higher urbanisation and the rapid emergence of sector competition underpin our bright retail outlook for Thailand. Clearly, Tesco’s debut showing is a strong signal of investor confidence in its ability to ride on Thailand’s retail growth story and consequently enjoy robust growth prospects.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Thailand Food Industry SWOT

Thailand Drink Industry SWOT

Thailand Mass Grocery Retail Industry SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Asia Pacific Risk/Reward Ratings

Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q

Thailand Food And Drink Risk/Reward Ratings

Macroeconomic Outlook

Table: Economic Activity

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts

Canned Food

Table: Canned Food Value/Volume Sales – Historical Data & Forecasts

Confectionery

Table: Confectionery Value/Volume Sales – Historical Data & Forecasts

Trade

Table: Food & Drink Trade Indicators – Historical Data & Forecasts

Drink

Alcoholic Drinks

Table: Thailand Alcoholic DrinksValue/Volume Sales Historical Data & Forecasts

Table: Beer

Soft Drinks

Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts

Hot Drinks

Table: Hot Drinks Value Sales – Historical Data & Forecasts

Mass Grocery Retail

Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts

Chapter 5 - Food

Key Industry Trends And Developments

Pursuing Growth Beyond Thailand

Food Companies Pushing Deeper Into Thailand

Rice Exports Likely To Fall In / Despite Better Crop

Market Overview

Agriculture

Organics

Food Processing

Trade

Dairy

Chapter 6 - Drink

Key Industry Trends And Developments

Investments To Intensify In Soft Drinks Sector

Looking Forward To NonCarbonates Outperformance

Brewers Building Regional Presence Across Thailand

Market Overview

Alcoholic Drinks

Soft Drinks

Chapter 7 - Mass Grocery Retail

Key Industry Trends And Developments

Tesco’s Impressive Debut Reflects Investor Confidence In Thai Retail

Embarking On An Expansionary Wave

PriceCutting Not A Practical Strategy For The Hypermarket Duo

Market Overview

Table: Structure Of Mass Grocery Retail Market By Estimated Number Of Outlets

Table: Structure Of Mass Grocery Retail Market – Sales Value By Format (US$bn)

Table: Structure Of Mass Grocery Retail Market – Sales Value By Format (THBbn)

Table: Average Sales Per Outlet By Format –

Table: Grocery Retail Sales By Format

Chapter 8 - Competitive Landscape

Key Players

Table: Key Players In Thailand’s Food Sector

Table: Key Players In Thailand’s Drink Sector

Table: Key Players In Thailand’s Mass Grocery Retail Sector

Chapter 9 - Company Monitor

Food

Chokchai

Charoen Pokphand Foods (CPF)

Thai President Foods

Thai Union Frozen Products

Drink

Thai Asia Pacific Brewery (Thai APB)

Thai Beverages Plc (ThaiBev)

Singha Corporation (formerly Boon Rawd Brewery)

Mass Grocery Retail

CP All Ltd

Siam FamilyMart

Tesco Lotus

Central Food Retail Company Ltd (CFR)

Big C Supercentre

Chapter 10 - Demographic Outlook

Table: Thailand's Population By Age Group,(')

Table: Thailand's Population By Age Group,(% of total)

Table: Thailand's Key Population Ratios,

Table: Thailand's Rural And Urban Population,

Chapter 11 - Risk/Reward Ratings Methodology

Table: Rewards

Table: Risks

Weighting

Table: Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food &rink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Thailand (in Asia)