Page 32 - FoodFocusThailand No.166 January 2020

SPECIAL FOCUS
SPECIAL FOCUS

The 2020 Ready-to-eat Food Market

Poised to Grow by 3-5%

With Adaptation to Market Changes and Slackening

Purchasing Power

Recently, ready-to-eat (RTE) meals have enjoyed a higher growth than that of the overall food and beverage
1
industry thanks to an increasing number of easily accessible points of sale such as convenience stores, the
soaring popularity of out-of-home dining, certain limitations (such as lack of time or cooking space), urban
lifestyles, the prevalence of single families, and the competition among RTE food entrepreneurs in developing
food-manufacturing innovations that have generated a wider variety and convenience while elevating the quality
of RTE meals to the same level of freshly prepared foods (in terms of flavor, texture, ingredients, and nutrition).

Even though these factors are expected to keep nurturing the Therefore, the main focus lies on how consumers, in an attempt
expansion of the RTE meal market in 2020, the economic slowdown to trim off these expenses, change their behaviors, which may range
may continue to put pressure on the slumping purchasing power while from price comparison and reduced consumption to selection of
a large number of alternative products may become a challenge to the alternative and budget-friendly products with better price-to-quality
RTE food sector. Kasikorn Research Center, therefore, points out that ratio such as instant meals or street foods, all of which may negatively
the challenges of the RTE food market in 2020, which will differ from affect the sales of RTE meals.
those of 2019, include the following:
The Sluggish Growth of Convenience Stores:
The Changes in Consumer Behavior as A Result of 2convenience stores are an important point of sale for RTE foods,
1The Stumbling Economy: according to the latest employment but in 2020 the sales generated through this channel is projected to
data in November 2019, the number of employed individuals has been come to a slowdown. This is mainly due to a growing competition
constantly heading downhill, with a YoY drop by 550,000 persons. The within the sector deriving from a rising number of new outlets while
employment in the manufacturing sector saw a dip by 210,000 positions the target group remains the same in terms of size. The sector will
while the number of unemployed individuals remains high, at 60,000 face the pressure of lower purchasing power and will fight for
persons. This is partly due to the global trade situations, which have customers by churning out new promotions in order to boost up the
affected Thai business, manufacturing, and export sectors. The impacts sales and minimize overstocking (especially of perishable goods with
rippled out into other labor markets (thus resulting in declining needs short shelf life such as frozen RTE foods). These attempts will result
for new labor, reduced work shifts, increasing dependence on human- in dwindling per-branch profits and incomes.
replacing technology, and closures of factories. These situations point
toward a shrinking purchasing power that may continue further into A Hike in Business Costs Due to Higher Ingredient
2020. Although food expenses are fundamentally necessary to our lives, 3Prices and Wages: in terms of costs, the challenge that
they are expected to be kept within a tighter budget in the next phases, RTE food manufacturers have to face in 2020 is the consequences
especially for those in the labor market (from office workers to blue-collar of drought and low water level in reservoirs that may lead to lack of
workers in the manufacturing industry) who are an important target irrigation water for agriculture and lower supply of fresh ingredients
group of RTE meals. such as vegetable, meat, and rice. These factors will result in shrinking
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