Foodservice is a major driver of cheese consumption, with it accounting for the majority of total volume sales in Thailand, with this set to continue over the forecast period. Thai food culture is becoming more modern and cosmopolitan.
The retail consumption of cheese remains low as it is not considered to be a common ingredient in Thai cooking, with it typically used only on special occasions when preparing Western food or desserts. In response to this, KCG Corp, a prominent local manufacturer and distributor, launched several new products at the end of the review period targeting retail consumers in an attempt to grow this channel.
Thai consumers are more familiar with sliced processed cheese than other cheese products due to several factors. Firstly, stores display sliced processed cheese on the shelf while displaying unprocessed cheese in a separate refrigerator.
Imported brands were among the most popular options over the review period with these seen to offer a better and more authentic taste. However, the high price of these products also impeded the development of cheese in Thailand with it remaining unaffordable for many consumers.
Australian company Bega Cheese, which looks to provide affordable cheese for everyday use, expanded its presence in Thailand at the end of the review period with it expanding its presence in convenience stores, especially the popular 7-Eleven chain. The company is looking to expand across Asia and its pricing strategy, whereby its products are priced similar to those of local options, is helping it to win over price-sensitive consumers.
KCG Corp Co Ltd retained a healthy lead in cheese in 2019, with the company continuing to innovate with products such as Allowrie Squeeze Cheese and Imperial Selected Shredded Cheese. Offering a wide range of processed cheese products in formats such as sliced, triangles and squeezable the company is able to cater to local preferences while also benefiting from a strong and established distribution network.
The sugar tax that was proposed by the Thai government in September 2017 with it coming into effect in October 2019 after a two-year grace period. Manufacturers were given time to reformulate their products with alternative sweeteners or to reduce the added sugar content.
Consumers in Thailand have become more discerning and are increasingly looking for products that cater to their age group and lifestyle. Drinking milk products is evolving to capitalise on this trend, with players using special nutrients and positionings to target the elderly, children and active adults.
Other milk alternatives remained the most dynamic category in 2019, albeit from a relatively low base. These beverages are made from ingredients ranging from nuts and legumes to grains.
With the sugar tax coming into effect in October 2019 the major players in soy drinks have been forced to reformulate their products to avoid price rises. Both Lactasoy and Vitamilk, which dominate soy drinks, have taken this step.
In soy drinks brands such as Tofusan and Homesoy that are offering chilled options over shelf stable products are benefiting from an increasingly health-conscious consumer base. Consumers perceive chilled products to be fresher and therefore healthier, and these brands offer single-serve packaging to overcome any reservations about wastage.
Previously products within other milk alternatives carried a high unit price, being targeted at niche consumer groups such as vegans and lactose intolerant consumers. However, over the review period demand exploded as products such as almond milk gained a reputation for their health benefits.
The government’s sugar tax was proposed in September 2017, with it coming into effect in October 2019 after a two-year grace period. During this period leading players have introduced products with a lower sugar content, or products with sweeteners.
Drinking yoghurt benefits from an established healthy image with consumers won over by claims of the benefits of probiotics in leading brands such as Yakult and despite the sugar tax it is likely to remain by far the largest category of yoghurt in Thailand. Meanwhile, flavoured yoghurt suffers from an image of being somewhat of a frivolous product.
Consumers in Thailand are increasingly looking for healthier options with regard to yoghurt. New product developments generally centre on features such as a clean label, low sugar and high protein, with low-fat yoghurt, yoghurt with a granola topping and Greek yoghurt all becoming commonplace in retailers.
Major players launched reduced sugar/no sugar drinking yoghurt in 2018/2019 as they looked to prepare for the introduction of the government’s sugar tax. New products included Betagen Light, Yakult Light, Dutchie life and Delight low sugar.
Rising health consciousness amongst consumers has helped drive demand for plant-based yoghurt, with local and imported niche brands like Rivon and Joya benefiting from this trend. Consumers are attracted by the higher protein content of plant-based yoghurt compared to their traditional dairy variants, while it also attracts those looking to lead a vegan or lactose-free diet.
Yakult Sales (Bangkok) Co Ltd retained second place in the rankings in 2019. The company has built up a unique and effective operating model in Thailand over a period of decades, with Yakult Ladies delivering the products door to door through direct selling.
Thailand’s booming coffee culture has resulted in the proliferation of both chain and artisan coffee shops. The growing number of coffee shops has resulted in increasing demand for coffee whiteners, condensed milk and cream throughout Thailand.
With the number of cafés and bakery shops increasing in Thailand, it has become less desirable to cook and eat at home for consumers. As a result, coffee whiteners and condensed milk saw retail volume growth slow further in 2019, with the latter registering a decline.
Another factor driving demand for other dairy through the foodservice channel is the growing popularity of bubble tea cafés and Thai milk tea shops, for which coffee whiteners is a key ingredient. Furthermore, the growing number of in-store bakeries and cafés offering Japanese-style baked goods, such as light and fluffy Japanese cheesecake and choux crème, are gaining in popularity.
Nestlé (Thai) Ltd’s Coffee-mate brand continued to dominate coffee whiteners in 2019. Coffee-mate is synonymous with coffee whiteners among local consumers because it was the first brand to enter the category in Thailand.
Some players in coffee whiteners are targeting specific foodservice channels as they look to increase their sales. For example, Coffee Dreamy is targeting the bubble tea market as it looks to grow its share.
Home consumption is favouring convenient, fat-free products, as was seen with the favourable response to squeezable condensed milk tubes and to new cans for evaporated milk and instant whipped cream. All of the leading players in condensed milk have launched squeezable bottles, which makes it easier to create sweet treats.
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Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Thailand with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Packaged Food market research database.