Despite predictions for improving demand for butter and spreads over 2021 compared to the significant declines of 2020 as consumers prioritised their expenditure in the face of decreasing disposable incomes as a result of the pandemic, these products are not considered to be a main ingredient for many Thai dishes. While 2021 is likely to offer a more positive scenario for butter and spreads through retail as Thai consumers continue to remain confined to their homes for long periods due to a third wave of the pandemic, boosted by home-bakers who have been able to dedicate time to baking and cooking, overall volume sales will remain much lower compared to pre-pandemic levels.
With demand for butter in Thailand being mainly driven by more affluent consumers due its higher than average unit price, retail volume sales remain lower compared to the foodservice channel which dominates the category. This channel has been severely disrupted by the emergence of the pandemic, with many outlets forced to close as a result of the initial national lockdown in 2020 and state curfews, followed by a more severe second wave which resulted in a further rise in case numbers and deaths lasting into March 2021.
KCG Corp Co Ltd is predicted to retain its overall leadership of butter and spreads in 2021 in addition to regaining some lost value share following its weak performance in 2020 which saw it record one the strongest declines in value terms linked to butter, a category which it dominates. The player offers both its own local brand, Imperial, in addition to representing imported brands such as Président (which it distributes for Groupe Lactalis) and leading brand Allowrie for Fonterra Cooperative Group Ltd.
Demand for butter through foodservice is predicted to gradually improve over the course of the forecast period depending how quickly various restrictions are relaxed once the threat of the pandemic has waned and a greater proportion of the Thai population has been vaccinated. This will boost the entire economy and tourism industry, resulting in strengthening consumer sentiment and a greater willingness to spend on non-essential goods.
Apart from baked goods, the “butter grill” buffet has been an emerging trend in Thailand with butter becoming a major source of oil when grilling meats and seafood. Both franchise outlets and independent foodservice establishments were aggressively expanding prior to the pandemic, driven by the increasing demand from university students and young adults who are always ready to try new flavour experiences.
With an increasing trend for baking pastries and croissants at home during the pandemic, consumers of butter are likely to seek a greater choice in terms of bakery ingredients moving forward, considering both cost and a healthy positioning when making a purchasing decision. Smaller domestic companies see this as an opportunity to tap into the market by developing their own brands or importing source ingredients.
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Understand the latest market trends and future growth opportunities for the Butter and Spreads industry in Thailand with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Butter and Spreads research and analysis database.
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