Rising price sensitivity amongst local consumers as a result of decreasing disposable incomes in light of the pandemic and general weakening consumer sentiment as Thais were forced to remain at home for longer periods of time as a result of restrictive measures to control the spread of the virus, resulted in significant declines for savoury snacks in 2020. There was a greater switch during this time in consumer behaviour from premium products such as seasoned seaweed and seafood snacks under other savoury snacks to more economy options.
The smaller foodservice channel witnessed more drastic declines in demand for savoury snacks in 2020, as Thailand’s tourism industry was significantly impacted by the pandemic. Even as restrictions are relaxed and tourists start to arrive in Thailand over the early part of the forecast period, the number of foreign travellers arriving is estimated to be much lower compared to pre-pandemic levels.
With the exception of longstanding leader Frito-Lay Thailand Co Ltd, which benefits from the popularity of its Lay's potato chips in Thailand, no other players hold double-digit value share in what is essentially a fairly fragmented competitive landscape. Decreasing disposable incomes in the wake of the pandemic have seen increasingly price-sensitive consumers move towards affordable brands such as Snack Jack and Party within puffed snacks with these brands set to see improving value sales during 2021.
Lingering price sensitivity amongst local consumers heading into the forecast period will mean that many Thais continue to purchase more affordable options in terms of savoury snacks; while demand for this category is set to continue to improve, volume sales for both foodservice and retail channels are unlikely to fully recover to pre-pandemic levels until 2023. However, as restrictions relax and consumers start to spend longer periods of time outside of the home, impulse demand for certain savoury snacks is likely to drive sales forward, while greater confidence to return to foodservice in addition to a recovering tourism industry depending on travel restrictions and the threat level of the virus, will ensure that foodservice records higher volume growth compared to retail over the forecast period.
Nuts, seeds and trail mixes is predicted to record the highest retail volume growth rate, with the category strengthening in demand over the course of the forecast period. This will be driven by the greater recovery of health and wellness trends, which will become a stronger focus area for health-conscious consumers in line with improving disposable incomes.
While salty snacks is predicted to record further growth over the forecast period, particularly through the foodservice channel when consumers are less likely to be as concerned about eating healthily when they are out socialising and enjoying snacks with a drink, the health and wellness trend has potential to subdue demand through retail as increasingly health-conscious consumers look to make more informed choices. Mounting pressure for companies to reduce the salt content in their products had already emerged towards the end of the review period, with consumers in Thailand consuming twice the amount of salt recommended by the World Health Organization, while advocacy group Less Salt continued to campaign for greater awareness about the dangers of consuming too much salt.
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