The government’s development and support programme for SMEs helped to stimulate sales growth for butter and margarine in 2017. Foodservice increased rapidly over the review period as a result of the imported coffee culture. Flourishing cafés and bakery shops were major drivers of Thailand’s economic growth. Therefore, the government invested THB3.7 billion to ensure the success of these businesses by providing monetary and business advisory support to traditional restaurants and bakeries – both in-store units and stand-alone shops. The rising influx of trendy cafés and restaurants has also increased consumer-awareness of various cuisines. Thais cooking from home tend to cook a broader variety of food and better-quality food, which requires the use of premium products. More frequent eating out has also made consumers more willing to spend on more expensive ingredients.
KCG Corp Co Ltd led sales in 2016 and continued to lead sales in 2017, with a 36% value share. KCG Corp is a major company in Thailand that takes charge of the brand Allowrie. The company invests heavily in reinventing products to better answer the demands of Thai consumers. This includes lowering prices, producing simple and eye-catching packaging designs, introducing bigger sizes and widening its distribution channel. Although Allowrie is priced higher than Imperial and Anchor, which held 9% and 7% share of value sales in 2017, respectively, Allowrie’s brand positioning is most relatable to Thais. KCG Corp is expected to continue to lead sales in the forecast period, as the company ramps up its marketing efforts in order to maintain its leadership position.
In the forecast period, a retail value CAGR of 3% at constant 2017 prices is anticipated, a slower rate than the review period’s. The main reason for the projected drop is the lack of movement from the category, especially with regard to product innovation from different players. In contrast, foodservice will record a higher volume CAGR – 5% vs retail’s 3% –, s significant growth rate from 2016. Sales are expected to be led by a rising demand from an increasing number of restaurants, cafés and bakeries.
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