Bisbuit PDF

Independent Market Research Report
on the Premium Snacks and RTD Drinks Market

in Thailand and CLMV
Final Report
August 2019
© 2019
IMR Report i
© Frost & Sullivan 2019
Frost & Sullivan (S) Pte Ltd
100 Beach Road
#29-01/11 Shaw Tower
Singapore 189702
www.frost.com
Date:
The Board of Directors

Srinanaporn Marketing Public Company Limited
325/6, Lanluang Rd., Dusit,
Bangkok 10300 Thailand
Dear Sirs / Madams,

Independent Market Research Reporton the Premium Snacks and RTD Drinks Marketin
Thailand and CLMV for Srinanaporn Marketing Public Company Limited(“SNNP” or the
“Company”).
We, Frost & Sullivan (S) Pte Ltd (“Frost & Sullivan”), have prepared this Independent Market
Research Report on the Premium Snacks and RTD Drinks Market in Thailand and CLMV (“the
Report”) for inclusion in SNNP’s Prospectus dated
(“Prospectus”) in relation to the initial public offering and the listing of SNNP on the Stock Exchange
of Thailand.
We are aware that this Report will be included in the Prospectus and we further confirm that we are
aware of our responsibilities as the appointed independent market researcher of this listing exercise.
We acknowledge that if we are aware of any significant changes affecting the content of this Report
between the date hereof and the issue date of the Prospectus, we have an on-going obligation to
either cause this Report to be updated for the changes and, where applicable, cause SNNP to issue a
supplementary prospectus, or withdraw our consent to the inclusion of this Report in the Prospectus.
Frost & Sullivan has prepared this report in an independent and objective manner and has taken
adequate care to ensure the accuracy and completeness of this Report. We believe that this Report
presents a true and fair view of the industry within the limitations of, among others, secondary
statistics and primary research, and does not purport to be exhaustive. Our research has been
conducted with an “overall industry” perspective and may not necessarily reflect the performance of
individual companies in the industry. Frost & Sullivan shall not be held responsible for the decisions
and/or actions of the readers of this Report. This Report should also not be considered as a
recommendation to buy or not to buy the shares of any company or companies as mentioned in this
Report or otherwise.
For and on behalf of Frost & Sullivan (S) Pte Ltd:
______________________
Keith Lee
Director, Business & Financial Services
IMR Report ii
TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................................... III
1 MACROECONOMIC ANALYSIS FOR THAILAND AND CLMV........................................................... 1
1.1 MACROECONOMICS OVERVIEW FOR THAILAND ................................................................ 1
1.1.1 GDP and population ...................................................................................... 1
1.1.2 Social economic trends ................................................................................. 2
1.1.3 Political and business environment ............................................................... 3
1.1.4 Prospects and outlook for Thailand ............................................................... 4
1.2 MACROECONOMIC OVERVIEW OF CLMV ........................................................................ 4
1.2.1 GDP and population ...................................................................................... 4
1.2.2 Social economic trends ................................................................................. 9
1.2.3 Political and business environment ............................................................. 12
1.2.4 Prospects and outlook ................................................................................. 14
2 ANALYSIS OF THE SNACKS AND RTD DRINKS INDUSTRY IN THAILAND ...................................... 15
2.1 INDUSTRY DEFINITION AND SEGMENTATION ................................................................... 15
2.2 INDUSTRY DYNAMICS ................................................................................................... 16
2.3 INDUSTRY SIZE ............................................................................................................ 21
2.3.1 Snacks ......................................................................................................... 21
2.3.2 RTD drinks ................................................................................................... 23
2.4 SUPPLY CONDITIONS ................................................................................................... 25
2.4.1 Manufacturing trends ................................................................................... 25
2.4.2 Distribution channels ................................................................................... 27
2.5 COMPETITIVE LANDSCAPE ........................................................................................... 31
2.5.1 Competitive trends ....................................................................................... 31
2.5.2 Profile of key players ................................................................................... 34
2.5.3 Pricing analysis ............................................................................................ 35
2.5.4 Market share ................................................................................................ 37
2.6 REGULATORY TRENDS ................................................................................................. 45
2.7 INDUSTRY OUTLOOK & PROSPECTS ............................................................................. 46
3 OVERVIEW OF THE SNACKS AND RTD DRINKS INDUSTRY IN CLMV ......................................... 47
3.1 INDUSTRY SEGMENTATION ........................................................................................... 47
3.2 INDUSTRY DYNAMICS ................................................................................................... 47
3.3 INDUSTRY SIZE ............................................................................................................ 50
3.3.1 Snacks ......................................................................................................... 50
3.3.2 RTD drinks ................................................................................................... 51
3.4 SUPPLY CONDITIONS ................................................................................................... 52
3.4.1 Manufacturing trends ................................................................................... 52
3.4.2 Distribution channels ................................................................................... 53
3.5 COMPETITIVE LANDSCAPE ........................................................................................... 55
3.5.1 Snacks ......................................................................................................... 56
3.5.2 RTD drinks ................................................................................................... 57
3.6 INDUSTRY OUTLOOK & PROSPECTS ............................................................................. 58
4 PROSPECTS AND OUTLOOK FOR SRINANAPORN MARKETING PCL (SNNP) .............................. 59
IMR Report iii

1 MACROECONOMIC ANALYSIS FOR THAILAND AND CLMV
1.1 M ACROECONOMICS OVERVIEW FOR THAILAND

Thailand is an advanced developing country and the second-largest economy in South East
Asia (“SEA”), after Indonesia. The country achieved the upper-middle income economy1 status
in 2011 and was recognised by the World Bank as one of the success stories in terms of social
and economic development.
1.1.1 GDP and population

The International Monetary Fund (“IMF”) reported that the nominal GDP of Thailand stood at
THB12,915 billion in 2013 (approximately USD420 billion) and has reached THB16,316 billion
in 2018 (approximately USD487 billion). In 2017, the service and service-related 2 sectors
contributed to 61.6% of the country’s GDP, followed by themanufacturingsector which
contributed to 27.7% of the GDP. Other sectors, such as agriculture, mining and quarrying, and
construction, contributedto the remaining 10.7% of the country’s GDP. The real GDP grew by
4.1% in 2018, recovering compared to a weak growth of 1.0% in 2014 due to political tensions,
rising household debt and weakening of the global demand. Thereal GDP growth rate is
forecasted to bebetween 3.5% and 3.6% in the period between 2019 and 2023, underpinned by
improving political situation in Thailand, expansionary fiscal policy, andthe recovery of
Thailand’s export and the tourism industry. Thailand’s nominal GDP is projected to reach
THB20,971 billion (approximately USD645 billion) by 2023. Similarly, the GDP per capita is
forecasted to grow from THB240,681 in 2018 to THB307,400 in 2023, at a CAGR of 5.0%.
Chart 1-1: Thailand’s Nominal GDP (in THB billion) and Real GDP Growth, 2013 – 2023F
21,000 4.0% 4.1% 5.0%

3.4% 3.5% 3.5% 3.5% 3.5% 3.6%
3.1%
Nominal GDP (THB billion)
Real GDP Growth Rate (%)

19,000 2.7%
3.0%
17,000
1.0%
15,000 20,971
1.0%
19,868
18,886
13,000
18,000
17,168
16,316
15,452
11,000 (1.0%)
14,555
13,743
13,230
12,915
9,000
(3.0%)
7,000
5,000 (5.0%)
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Nominal GDP (THB billion) Real GDP growth (%)
Source: IMF Economic Outlook Database (April 2019), Frost & Sullivan
1
Defined as country with Gross National Income per capita of between USD4,125 and USD12,736.
2
Service-related sectors includes wholesale and retail trade (including hotels and restaurants), transport, and
government, financial, professional, and personal services such as education, health care, and real estate services.
Also included are imputed bank service charges and import duties
IMR Report Page 1

Chart 1-2: Population (in million) and GDP Per Capita at Current Prices (in THB thousand)
for Thailand, 2013 – 2023F
GDP Per Capita (THB thousand)
450 70
Population (million)
400
350 291 303
265 277
300 241 253
216 228
250 193 197 204
68
200
150
100
50 66.8 67.0 67.2 67.5 67.7 67.8 67.9 68.0 68.1 68.2 68.2
0 66
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Population (million) GDP per capita current prices (THB thousand )
Source: IMF Economic Outlook Database (April 2019), Frost & Sullivan
1.1.2 Social economic trends

Between 2013 and 2017, the economically active population segment (between 15 and 64
years old) 3 in Thailand remained stable at an average of 70% of the total population.
Furthermore, Thailand had the fourth lowest unemployment rate in SEA in 2018. Thailand also
recorded a growth of 2.5% CAGR in its households final consumption per capita from 2013 to
2017.
In terms of inflation-adjusted growth, the growth of households final consumption per capita
declined in 2013, mainly due to the political crisis in 2013 which affected consumer confidence.
Nonetheless, it recovered in 2015, partly due to the increase in government expenditureand
investment, as well as a decrease in imports. In 2016, the Thai Government introduced various
stimulus packages, such as a tax reduction scheme, subsidies for farmers affected by drought
and handing out one-off payments for the lower income earners. The tax reduction scheme
included a tax deduction for personal income tax when purchasing selected goods and services,
especially during festive seasons. This resulted in the households final consumption per capita
growing in 2016. In line with the stabilisation of global oil prices and of the global economic
climate, Thailand’s inflation has also stabilised since 2016. Thailand’s inflation was 1.1% in
2018, in line with a continuously higher oil price, rising prices of certain key farm products and
processed food, and higher domestic demand and it is expected to remain in the range of 1.0%
to 2.0% between 2019 and 2023.
Chart 1-3: Unemployment Rate4 (%) in Thailand and other SEA Countries in 2018
5.0%
Unemployment Rate
4.3%
4.0% 3.4%
(%)
3.0%
2.1% 1.9%
1.8%
2.0% 1.3%
0.7% 0.8%
1.0%
0.2%
0.0%
Cambodia Lao PDR Myanmar Thailand Singapore Vietnam Philippines Malaysia Indonesia
Source: World Bank; Frost & Sullivan
3
Total population between the ages 15 and 64 is the number of people who are economically active.
4
Unemployment refers to the share of the labor force that is without work but available for and seeking employment.
IMR Report Page 2

Chart 1-4: Households Final Consumption Expenditure Per Capita in Thailand (in THB),
2013 – 2017
115,000 3.5%
Consumption per capita
111,426.4
3.0%
Households FInal
110,000 107,625.4 2.5%

104,291.7 2.0%
103,484.3
(THB)
105,000
101,061.6 1.5%
100,000 1.0%
0.5%
95,000 0.0%
2013 2014 2015 2016 2017
Household Final Consumption per capita in current prices (THB)
Growth of Household Final Consumption per capita in constant prices (%)
Source: World Bank Data;Frost & Sullivan

Chart 1-5: Inflation in Thailand, 2013- 2023F
3% 2.2% 2.0%
1.9% 1.8%
Inflation in Thailand (%)
2% 1.6%
1.3%
2% 1.1% 1.0%
1% 0.7%
1% 0.2%
0%
-1% 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
-1%
-0.9%
-2%
Source: World Bank Data; Forecast by IMF; Frost & Sullivan

In 2015, Thailand experienced a deflation of 0.9% primary driven by falling crude oil prices.
Between 2013 and 2015, inflation in Thailand declined. Inflation was 2.2% in 2013 due to high
energy price and a slowdown in domestic demand as prices of prepared food increase. A
further decline in inflation was observed between 2014 and 2015 primarily driven by falling
crude oil prices. Since 2015, there was a recovery of energy price inflation that led to a rebound
of inflation. Moving forward, the IMF estimates inflation in Thailand to rise, predominantly as a
result of its view on economic recovery in Thailand which is led by higher expected government
spending. Rising product and services price due to higher global oil prices is also expected for
the near term contributing to inflationary pressure.Favourable public and private investments
are also the supporting factors for near term inflation, for new and expansion of existing
infrastructureprojects,andincrease in applications for investment. 5 Long-term inflation is
expected to rise towards 2.0% by 2023 underpinned by the expected recovery of the Thai
economy.
1.1.3 Political and business environment

The economic growth in Thailand was affected in 2014 following the military coup. Since then,
the political administration has been placed under the control of the National Council for Peace
and Order. Martial law was lifted on 1 April 2015, with the government focusing on political
stability before the election held on the 24th March 2019, which were won by the pro-military
party.
5
Bangkok Post, Inflation reached 4-year high in 2018, last updated January 3, 2019, retrieved from
https://www.bangkokpost.com/business/news/1604542/inflation-reached-4-year-high-in-2018
IMR Report Page 3

The passing of King Bhumibol Adulyadej, in October 2016 has led to some short-term
uncertainties. Following the ascension of King Maha Vajiralongkorn in December 2016, a
Constitution was signed by the King in April 2017 that signals the possibility of a return for a
democratic ruling. The Government of Thailand has committed to continue its effort towards a
return to the democratic ruling following the general election conducted in March 2019. Some of
the ongoing reform efforts include the passing of the Eastern Economic Corridor Act,
Competition Act and the Foreign Business Act, signalling a stable political situation and the
government’s effort to boost foreign investment in the country. As such, Frost & Sullivan
expects the political and business environment to continue stabilising in the medium to long
term with limited economic impact to the country.
Thailand moved into the top 30 countries globally (27th) in terms of ease of doing business
according to the World Bank in 2019 and it is ranked third in SEA. Moreover, Thailand moved
up from 40th in 2017 to 38th in 2018 in the World Economic Forum’s Global Competitiveness
Index Report. Thailand has also marginally improved its Corruption Perception Index to be
ranked the 99th least corrupt nation in 2018 from 102nd in 2013.6
1.1.4 Prospects and outlook for Thailand

Thailand is on the path of economic recovery after the stagnation of its economy in 2014.
Thailand’s economy stabilised in 2015 and its real GDP grew by 4.1% in 2018 and it is
forecasted to continue growing at a rate of between 3.5% and 3.6% up to 2023, mainly driven
by the growth in exports of goods and services in the near term and the gradual improvement in
the domestic demand in the medium term. The Government of Thailand has also put in place
measures to strengthen public investments in the country.
As reflected in Thailand’s National Budget for the year 2019, the investments in infrastructures
from the private and public sectors will be one of the main contributors to the economic growth.
In addition, the export and tourism sectorsare also expected to expand. This is in line with
Thailand’s 4.0 economic development plan introduced by the Government of Thailand, where
upgrading of transportation infrastructure and the Eastern Economic Corridor (EEC)
development are in progress. Ten target industries7 are expected to grow rapidly, as well as
Thailand’s performance in trade, technology development, and overallsocial well-being.
1.2 M ACROECONOMIC OVERVIEW OF CLMV

The regional economic cooperation between Cambodia, Myanmar, Laos, and Vietnam
(“CLMV”) was conceptualised by the Asian Development Bank (“ADB”) in 1992 after decades
of instability within the region. It was an event which marked the beginning of geopolitical
stability, which was expected to attractFDIs in the region. CLMV are high growth emerging
markets within SEA. According to the ADB, CLMV countries are gradually shifting from being
agricultural-focused to more diversified economies, and to more open, market-based systems.
The process of modernisation and industrialisation of industries in these countries have led to
strengthening regional and trade relationships in terms of investment, cross-border trade,
andlabour mobility.
1.2.1 GDP and population

Cambodia
Cambodia is moving towards becoming one of the new growth economies in Asia after decades
of internal conflict and poverty.8 Its nominal GDP grew from USD15.2 billion in 2013 to USD24.5
billion in 2018 with a real GDP growth of 7.1% in the same period. The supply of inexpensive,
6
TransparencyInternational
7
Refer to Next-Generation Automotive, Intelligent Electronics, Advance Agriculture and Biotechnology, Food
Processing, High Wealth and Medical Tourism, Digital, Robotics, Aviation and Logistics, Comprehensive Healthcare,
Biofuel and Biochemical
8
ADB
IMR Report Page 4

low-skilled labour in Cambodia has attracted FDIs into the country, particularly for the
production of garments and footwear for export, which in addition to the construction and
services sectors are the main drivers of the economy. The growth is expected to remain strong
in 2019 with a robust construction sector as well as a strong demand for exports. The
government had approved 2,867 construction projects worth USD5.2 billion in2018 9 . The
service sector is growing due to the higher number of international tourist arrivals, which grew at
11.8% and 11% in 2017 and 2018 respectively; this is attributable to the Government of
Cambodia’s introduction of the “China-ready” initiative that attracts Chinese tourists 10 & 11 .
Cambodia’s nominal GDP is forecasted to grow from USD24.5 billion in 2018 to USD37.2 billion
in 2023 and its real GDP growth is expected to be between 6.2% and 7.3% from 2018 to 2023.
Laos
The nominal GDP of Laos grew from USD12.0 billion in 2013 to USD18.4 billion in 2018. The
real GDP growth was 6.5% in 2018. The country’s real GDP growth averaged 7.0% in the
period from 2013 to 2018,due tothe increasing use of the country’s natural resources, such as
water (for hydropower), minerals and forestry. The construction and services sectors also
expanded in line with the growing regional integration and attraction of foreign investments and
tourists. The growth in the period from 2019 to 2023 will be supported by hydropower projects
expected to begin commercial operation, and continuous investments in infrastructures. The
public debt-to-GDP ratio is also expected to be lower due to the passing of the Public Debt
Management Law.12Moving forward, Laos’ nominal GDP is expected to grow from USD18.4
billion in 2018 to USD28.4 billion in 2023 and its real GDP growth is expected to be between
6.5% and 6.8% from 2018 to 2023, with exports, construction and services sectors as the main
pillars of growth. In addition, according to the ADB, Laos is on track to upgrade from being a
least-developed country to a developing country status by 2020.
Myanmar
Myanmar is an emerging economy with its nominal GDP growing from USD60.1 billion in 2013
to an estimated USD68.6 billion in 2018, and with a real GDP growth rate at 5.9% in the period
between 2013 and 2018. In 2011, the government of Myanmar embarked on fundamental
policy reforms including anti-corruption initiatives, liberalising its foreign exchange rules to adopt
a managed float exchange rate system, introducing new foreign investment laws and
undergoing tax reformation policies to encourage investments to accelerate economic growth.
The second wave of reforms in the Myanmar Sustainable Development Plan, with greater
investments in both physical and human capital will help sustain the growth take-off and
achieve the Sustainable Development Goals.
In 2018/19, Myanmar’s economy performed moderately compared to 2018/17, driven by the
growth in agricultureand someservice subsectorssuch as telecommunications. However, the
growth will be offset by slower growth in manufacturing, construction, and transport sectors due
to slowing growth in investments, higher production costs and weakening domestic
demand.13The nominal GDP of Myanmar is expected to reach USD94.2 billion in 2023 from
USD68.6 billion in 2018 whereas its real GDP growth is expected to be between 6.% and 6.9%
from 2019 to 2023.
Vietnam
Vietnam’s nominal GDP has grown at a robust pace, from USD170.4 billion in 2013 to an
estimated USD241.3 billion in 2018 with its real GDP growth at 7.1% in 2018. Since the political
and economic reforms in 1986, Vietnam transformed from one of the lowest income countries in
the world to a country of lower middle-income status with GDP per capita of USD2,551in2018.
The services sector is estimated to contribute 41.2% of the GDP in 2018, while industrial
9
Open Development Cambodia, Construction, last updated February 27, 2019, retrieved from
https://opendevelopmentcambodia.net/topics/construction/
10
World Bank “East Asia Pacific Economic Update”, April 2018
11
Khmer Times, Cambodia 3rd in ASEAN for tourist growth, last updated January 22, 2019, retrieved from
https://www.khmertimeskh.com/570963/cambodia-3rd-in-asean-for-tourist-growth/
12
Lao Economic Monitor: Macroeconomic Stability amidst Uncertainty, January 2019
13
World Bank, Myanmar Economic Monitor December 2018
IMR Report Page 5

activities, such as food processing, garment, and shoes manufacturing and mining, as well as
construction, contributed to 34.3% of GDP during the same year. A total of 14.6% of the GDP
was contributed by the agriculture industry including products such as rice, coffee, rubber, and
tea, while product taxes subsidies on production contributed the remaining 10.0%. 14 The
ongoing shift of labour from agriculture to manufacturing and services sectors as well as the
strong FDIs inflow are expected to support the growth of Vietnam’s nominal GDP from
USD241.3 billion in 2018 to USD361.2 billion in 2023 and its real GDP growth between 6.5%
and 7.1% from 2018 to 2023.
Chart 1-6: Nominal GDP in CLMV (USD billion), 2013 – 2023F
600
500
GDP (USD Billions)
400
300
200
100
0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Cambodia 15.2 16.7 18.1 20.0 22.2 24.5 27.0 29.3 31.8 34.4 37.2
Laos 12.0 13.3 14.4 15.9 17.1 18.4 20.2 22.0 24.0 26.1 28.4
Myanmar 60.1 65.6 59.7 63.2 66.7 68.6 65.7 71.4 78.1 85.9 94.2
Vietnam 170.4 185.8 191.3 201.3 220.4 241.3 260.3 282.4 306.0 332.3 361.2
Source: IMF; Frost & Sullivan

Chart 1-7: Real GDP Growth in CLMV compared to ASEAN-5, Korea and Japan, CAGR
2018- 2023F
10%
9%
8%
Real GDP Growth (%)
CAGR 2018-2023F
6.8% 6.7% 6.6% 6.5%

7%
6% 5.3%
5%
4%
2.8%
3%
2%
1% 0.6%
-
Lao P.D.R. Myanmar Cambodia Vietnam ASEAN-5 Korea Japan
Note: ASEAN-5 comprises Indonesia, Malaysia, Philippines, Singapore and Thailand.

Source: IMF; Frost& Sullivan
14
Vietnam General Statistics Office, 2018 estimates
IMR Report Page 6

Chart 1-8: GDP per Capita at Current Prices in CLMV (USD), 2013 – 2023F
5,000
4,000
GDP Per Capita (USD)
3,000
2,000
1,000
0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Cambodia 1,009 1,091 1,163 1,270 1,388 1,509 1,635 1,750 1,871 1,997 2,127
Laos 1,900 2,075 2,212 2,417 2,555 2,720 2,932 3,157 3,390 3,638 3,903
Myanmar 1,180 1,275 1,151 1,210 1,267 1,298 1,239 1,338 1,454 1,588 1,733
Vietnam 1,899 2,047 2,086 2,172 2,353 2,551 2,726 2,929 3,145 3,384 3,646
Chart 1-9: GDP per Capita at Current Prices in CLMV, ASEAN-5, Japan and Korea (USD),
2018
45,000
39,305.8
GDP per Capita at Current
40,000
35,000 31,345.6
Prices (USD)
30,000
25,000
20,000
15,000
10,000 5,363.3
5,000 1,297.7 1,508.8 2,551.1 2,720.3
0
Myanmar Cambodia Vietnam Laos ASEAN-5 Korea Japan

The CLMV region experienceda stable population growth in the past five years, with its total
population growing from 162.1 million in 2013 to 170.4 million in 2018 at a CAGR of 1.0%. In
2018, the total population in CLMV countries contributed to 26.3% of thetotal population in SEA.
The total population in CLMV is expected to grow to 178.2 million, contributing to 26.1% of total
SEA population by 2023.
Table 1-1: Population Growth Trends in CLMV (million), 2013 – 2023F
Year Cambodia Laos Myanmar Vietnam % of CLMV
population in SEA
2013 15.1 6.3 51.0 89.8 26.5%
2014 15.3 6.4 51.4 90.7 26.4%
2015 15.5 6.5 51.8 91.7 26.4%
2016 15.8 6.6 52.3 92.7 26.4%
2017 16.0 6.7 52.6 93.6 26.4%
2018 16.3 6.8 52.8 94.6 26.3%
2019F 16.5 6.9 53.0 95.5 26.3%
2020F 16.7 7.0 53.4 96.4 26.2%
2021F 17.0 7.1 53.7 97.3 26.2%
2022F 17.3 7.2 54.1 98.2 26.1%
2023F 17.5 7.3 54.4 99.1 26.1%
CAGR (2013 – 2018E) 1.5% 1.5% 0.7% 1.1% N/A
CAGR (2018E – 2023F) 1.5% 1.4% 0.6% 0.9% N/A
IMR Report Page 7

The population in CLMV countries is relatively young compared to more mature markets. Even
by 2023, over 40% of the population is forecasted to be below 30 years old. The young
population in CLMV countries contributes to a young workforce, which is expected to contribute
to the economic development of the country and associated growth of income and expenditure.
Chart 1-10: Population pyramid, Cambodia, 2013-2023F
2013 2023F
+60 6.4% 8.4%
50-59 7.2% 8.5%
40-49 10.6% 10.7%

Age groups
30-39 13.1% 16.2%
20-29 19.7% 17.3%
10-19 20.9% 18.7%
0-9 22.1% 20.2%
-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

Share of Population, %
Source: UN DESA/ Population Division; Frost & Sullivan
Chart 1-11: Population pyramid, Laos, 2013-2023F
2013 2023F
+60 5.9% 7.2%
50-59 6.2% 7.5%
40-49 9.3% 11.1%

Age groups
30-39 13.2% 15.9%
20-29 19.5% 18.2%
10-19 22.4% 19.9%
0-9 23.5% 20.3%
-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

IMR Report Page 8

Chart 1-12: Population pyramid, Myanmar, 2013-2023F
2013 2023F
+60 8.3% 11.1%
50-59 9.3% 10.6%
40-49 12.5% 13.3%

Age groups
30-39 15.3% 14.8%
20-29 16.7% 17.2%
10-19 19.1% 17.1%
0-9 18.8% 15.9%
-25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
Chart 1-13: Population pyramid, Vietnam, 2013-2023F
2013 2023F
+60 9.6% 14.0%
50-59 10.3% 11.6%
40-49 13.4% 14.1%

Age groups
30-39 16.0% 16.9%
20-29 19.1% 13.9%
10-19 15.7% 14.3%
0-9 15.9% 15.1%
-25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%
1.2.2 Social economic trends

Vietnam has 66.7 million economically active people in 2017, contributing to 69.8% of its total
population. Laos, on the other hand, has 4.3 million economically active people contributing to
63.1% of its total population. Myanmar registered 36.0 million economically active people or
67.4% of its total population, followed by Cambodia with 10.3 million economically active people
or 64.3% of its total population. CLMV countries have a total economically active population of
over 117.3 million and favourable demographics comprising a young workforce.15
15
World Bank data for total labour force, 2017
IMR Report Page 9

Chart 1-14: Economically Active Population in CLMV (million), 2017
100.0 CLMV Average
Proportion of Population
68.3% 80%
Economically Active
Population (million)
80.0
69.8%
67.4%
60.0 64.3% 63.1%
(%)
60%
40.0
20.0
10.3 4.3 36.0 66.7
0.0 40%
Cambodia Laos Myanmar Vietnam
Source: World Bank; Frost & Sullivan

Households final expenditure per capita 16 in CLMV countries increased from 2013 to 2018, in
line with the rapid growth of disposable income, as consumers have a higher propensity to
spend in line with the positive economic conditions.
Chart 1-15: Households Final Expenditure Per Capita CLMV (USD), 2013 to 2018
2,000
1,500
1,000
USD
500
0
2013 2014 2015 2016 2017 2018 CAGR
Cambodia 794 846 892 966 1,016 1,078 6.3%
Laos 1,404 1,506 1,579 1,577 1,645 1,738 4.4%
Myanmar 566 586 549 618 646 667 3.3%
Vietnam 1,249 1,351 1,432 1,518 1,626 1,749 7.0%
Source: World Bank; IMF; Frost & Sullivan
16
Households final consumption expenditure is the market value of all goods and services, including durable products
(such as cars, washing machines, and home computers), purchased by households. It excludes purchases of dwellings
but includes imputed rent for owner-occupied dwellings. It also includes payments and fees to governments to obtain
permits and licenses, World Bank Data
IMR Report Page 10

Chart 1-16: Households Final Expenditure Per Capita in CLMV compared to ASEAN-5,
Korea and Japan, (USD), 2018 and CAGR 2013-2018
6.3% 4.4% 3.3% 7.0% 1.0% 2.2% -3.2%
25,000 8.0%
20,245.8
20,000 6.0%
CAGR 2013-2018
14,722.9 4.0%
15,000
USD
2.0%
10,000
0.0%
5,000 2,848.6 -2.0%
1,078.2 1,738.0 1,749.4
666.8
0 -4.0%
Myanmar Cambodia Laos Vietnam ASEAN-5 Korea Japan
2018E CAGR 2013-2018E

Chart 1-17: Disposable Income Per Capita CLMV (USD), 2013 to 2018
2,000
1,500
1,000
USD
500
0
2013 2014 2015 2016 2017 2018 CAGR
Cambodia 824 879 928 1,005 1,082 1,155 7.0%
Laos 1,461 1,562 1,640 1,645 1,727 1,813 4.4%
Myanmar 732 789 747 780 790 850 3.0%
Vietnam 1,291 1,396 1,482 1,566 1,682 1,809 7.0%
Source: World Bank; IMF; Frost & Sullivan

Chart 1-18: Disposable Income Per Capita in CLMV compared to ASEAN-5, Korea and
Japan, (USD), 2018 and CAGR 2013-2018
3.0% 7.0% 7.0% 4.4% 1.7% 3.7% -1.5%
25,000 23,156.3 8.0%

7.0%
20,000 6.0%
CAGR 2013-2018
16,741.4
5.0%
USD
15,000 4.0%
3.0%
10,000 2.0%
1.0%
5,000 3,146.4 0.0%
849.7 1,154.9 1,809.2 1,812.9
-1.0%
0 -2.0%
Myanmar Cambodia Vietnam Laos ASEAN-5 Korea Japan
2018E CAGR 2013-2018E

Between 2013 and 2017, inflation varied across CLMV economies due to both internal and
external factors. In 2018, Cambodia’s inflation rate was at2.4% mainly due to therising of fuel
IMR Report Page 11

and food prices.17 Prior to that, Cambodia’s inflation dropped in 2015 due to low oil prices. The
inflation rate rose higher in 2016 and 2017 due to recovery in oil prices. The inflation rate in
Cambodia is expected to remain stable between 2.5% and 3.0% in the next 5 years and it is
expected to be at 3.0% by 2023.18
The inflation in Laos is the lowest among the CLMV economies, at 2.0% in 2018. The inflation
rate rose slightly compared to the previous year due to rising domestic retail fuel prices and
rising food prices due to temporary disruption of food supply after flooding. 19 In 2017, the low
inflation was due to low fuel prices (recorded its lowest level in 6 years in 2016) and
commodities prices20. Moving forward, inflation in Laos is forecast to stabilise at 3.1% towards
2023.21
Myanmar recorded an inflation rate of 3.5% in 2018 which is a decrease from the 10%
recorded in 2015 from the food price shock. 22 Nonetheless, inflation in Myanmar has been
rising since 2013 on the back of a shortage of food for internal demand and easing of credit by
banks. In the next 5 years, the inflation in Myanmar is expected to be between 3.9% and 6.7%
in the period from 2018to 2023due to higher food and fuel prices.
Vietnam recorded an increasing inflation rate of 3.5% in 2018 attributed to the increase in oil
and food prices.23 In 2011, Vietnam registered a high inflation rate of 18.7%, mainly driven by
increases in domestic prices (e.g. electricity, coal, gasoline, minimum wages) and shortage in
food supply due to flood and epidemics in agriculture.24 Since then, the government’s fiscal
policies and falling commodity prices have contributed to the falling of the inflationary pressure
in Vietnam. In the forecast period up to 2023, the inflation in Vietnam is expected to stabilise
and grow steadily to between 3.1% and 3.7%, underpinned by the recovery in economic growth
and support from FDIs inflow into the country.
Chart 1-19: Inflation in CLMV, 2013 to 2023F
15%
10%
Inflation (%)
5%
0%
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Cambodia 3.0% 3.9% 1.2% 3.0% 2.9% 2.4% 2.5% 2.8% 3.0% 3.0% 3.0%
Laos 6.4% 4.1% 1.3% 1.8% 0.7% 2.0% 3.1% 3.3% 3.1% 3.1% 3.1%
Myanmar 5.7% 5.1% 10.0% 6.8% 4.0% 3.5% 3.9% 6.7% 6.2% 6.1% 6.1%
Vietnam 6.6% 4.1% 0.6% 2.7% 3.5% 3.5% 3.1% 3.3% 3.5% 3.6% 3.7%
Source: IMF; World Bank; Frost & Sullivan
1.2.3 Political and business environment

Cambodia has been governed by the Cambodian People’s Party since 1985, in which peace,
socio-economy development, and poverty reduction have been central to the government’s
development strategy. The Government of Cambodia launched an industrial development
17
World Bank, Cambodia: 2018 Article IV Consultation-Press Release; Staff Report; Staff Statement; and Statement by
the Executive Director for Cambodia, December 2018
18
IMF : Inflation rate, average consumer prices, Cambodia
19
World Bank, Lao DR Economic Monitor: Macroeconomic Stability amidst Uncertainty, January 2019
20
AEC News Today : Tight Grip & Diversification Needed for Laos Economy in Uncertain Times
21
IMF: Inflation rate, average consumer prices, Lao
22
World Bank: “Myanmar Economic Monitor, October 2017”
23
ADB: “Asian Development Outlook 2018 Update”
24
State Bank of Vietnam
IMR Report Page 12

policy in an effort to diversify the economy and upgrade its industries from low-costlabor-
intensive manufacturing to higher value-added production. As such, the government
encouraged the expansion and modernisation of small and medium enterprises by providing a
stronger regulatory framework and enforcement, as well as a better business environment.
Special Economic Zones (“SEZ”) in Cambodia also opened up opportunities for investors
especially in border areas, for the export-based manufacturing. Major industries in Cambodia
include garment and footwear exports, light manufacturing, tourism, and agriculture. 25
Cambodia was ranked 110th in the 2018 World Economic Forum’s Global Competitiveness
Index Report and 139th in terms of ease of doing business in 2019. Moving forward, Cambodia
is expected to benefit from a stabilisation of its political and social situation, which is expected
to boost FDIs inflow, tourism and industrial production that were disrupted by strikes in 2015.
However, corruption, bureaucracy and weak property rights remain as major challenges to the
development of the country, as evidenced by the low Corruption Perception Index ranking of
161st in 2018.
Laos haslargely enjoyed a political stability over the years through the governance of its single
political party, the communist-inspired Lao People's Revolutionary Party. The country’s
economy is strongly oriented towards external markets and favours FDIs. In order to raise the
country's profile among foreign investors, the government of Laos has developed special
economic zones replete with tax incentives. Major industries in Laos include mining,
hydroelectric power, and agriculture, while construction and agribusiness are the industries
earmarked for future development in line with the country’s overall development strategy.26 In
2017, Laos ranked 112nd in terms of competitiveness globally. The country’s ranking declined in
terms of ease of doing business (from 141st to 154th) in 2019 and corruption ranking (from 123rd
to 132nd) in 2018.
Myanmar’s legislative elections in November 2010 ended decades of military rule, followed by
its first openly contested general election which saw the National League for Democracy (“NLD”)
being elected. The NLD was re-elected in the subsequent general election in November 2015.
Major industries in Myanmar include agriculture, textile manufacturing, construction, and
transportation.27 In 2019, Myanmar was ranked 171st out of 190 economies by the World Bank
in terms of ease of doing business.28 The country was also ranked 132nd in terms of corruption
globally. The NLD is expected to carry out reforms to reduce bureaucracy and corruption within
the country and at the same time create a better trade environment to support economic growth.
The enactment of the SEZ Law in 2014 has also spurred developments of SEZs and is likely to
promote foreign trade and investments in Myanmar. Three SEZs, namely KyaukPhyu in
Rakhine State, Dawei in the Thanintharyi and the Thilwa in the Yangon region are currently
under development. Additionally, the National Export Strategy 2020-2025 is expected to boost
Myanmar’s export sectors moving forward.This strategy would be supported by theTrade and
Investment Project (2019-2021), which helps to improve trade competitiveness by removing
bottlenecks in the business environment.
Vietnam is a single-party Communist state. The Communist Party governs the country’s
political and economic policies. In 2007, Vietnam joined the World Trade Organisation after 12
years of negotiations. Since then, the Government of Vietnam has been gradually loosening
foreign investment limits, including lifting foreign ownership limits on certain restricted industries.
The legal system has also been undergoing changes to better align commercial statutes with
international norms. In 2015, Vietnam began simplifying business registration and customs
procedures. These factors have resulted in improvements in the competitiveness and corruption
ranking in 2018. The country has improved from 77th in 2017 to 74th in 2018 in terms of global
competitiveness. However, Vietnam’s ranking declined from 107th in 2017 to 117th 2018 in
terms of global corruption ranking. The country ranked 69th in terms of ease of doing business
in 2019. Vietnam’s major industries include electricals and electronics manufacturing, mining,
construction, real estate,and finance.29
25
B2B Cambodia
26
ANZ Business: Laos
27
HKTDC: Myanmar market profile
28
Doing Business Report 2018 by the World Bank
29
HKTDC: Vietnam market profile
IMR Report Page 13

Table 1-2: Global Business Environment Ranking for CLMV Countries
Global Ease of doing
Anti-corruption
Country Competitiveness business
(2018)
(2018) (2019)
Cambodia 110th 138th 161st
Laos 112nd 154th 132nd
Myanmar NA 171st 132nd
Vietnam 77th 69th 117th
Note: NA indicates not available.
Source: World Economic Forum: Global Competitiveness Index Report; Frost & Sullivan
1.2.4 Prospects and outlook

Cambodia experienced a healthy real GDP growth from 2013 to 2018 underpinned by the
expansion of the industrial and services sectors, andthe country’s real GDP is expected to
continue growing between 2018 and 2023, driven by the construction and tourism activities.30
Meanwhile, the sustained economic growth is expected to lead to a significant reduction of
poverty in the country, with the GDP per capita expected to grow from 2018 to 2023.31 In 2015,
the Government of Cambodia launched the Cambodia Industry Development Policy 2015 –
2025 to develop industrial activities and achieve high economic growth through increased
productivity. The policy encompasses plans to reform industrial framework and public
investment planning in Cambodia and it is expected to make Cambodia an even more attractive
destination for private investments into the industrial sector.
In Laos, the government aims to achieve the status of a developing country by 2020. Within
this, five industries, namely tourism, hydroelectricity, agriculture, mining and construction
material manufacturing have been earmarked as priority industries. Lao’s real GDP is expected
to grow from 2018 to 2023, supported by exports, construction, and service sectors.
Furthermore, Lao’s GDP per capita is expected to grow from 2018 to 2023.32
Myanmar is expected to continue growing from 2018 to 2023. The country is expected to
undergo structural reforms aimed at improving the business environment and investor
confidence to attract FDIs. With the second largest population and labour force among the
CLMV countries, Myanmar is expected to benefit from being an attractive destination forFDIs,
which are expected to accelerate industrial development and support sustainable economic
growth. As such, Myanmar’s nominal GDP per capita is expected to grow from 2018 to 2023.33
Like Laos, Vietnam aspires to become a modern industrialised nation by 2020.34 The Socio-
Economic Development Plan (2016 – 2020) introduced by the Government of Vietnam
emphasises the need to accelerate structural reforms and address macroeconomic stability to
achieve the goal of becoming a modern industrialised middle-income country, with a target
GDP contribution of 85% from the industrial and service sectors by 2020. Vietnam’s real GDP
is expected to grow between 2018 and 2023 supported by rising domestic demand and strong
expected inflow ofFDIs. Meanwhile, Vietnam’s GDP per capita is expected to grow from 2018
to 2023.35
30
ADB
31
IMF World Economic Outlook Database, April2019
32
33
34
The World Bank, “Vietnam’s Development Goals in the coming decades and beyond”
35
IMR Report Page 14

2 ANALYSIS OF THE SNACKS AND RTD DRINKS INDUSTRY IN THAILAND
This report will focus on the two main product categories of focus of Srinanaporn Marketing
PCL (SNNP), namely snacks and RTD drinks.
2.1 INDUSTRY DEFINITION AND SEGMENTATION

Snacks: The snacks industry refers to a category of food products which are generally
consumed in small amounts and generally in between the main meals of the day. The snack
industry includes a broad category of products (e.g. seafood snacks, biscuits, wafers, crackers,
potato chips, nuts,and beans). Overall there exist multiple types of snacks, and their ingredients
and level of consumption are different among geographical areas, mostly due to cultural and
culinary preferences of the population. With regards to snacks sold by SNNP in Thailand, the
main categories of focus are:
- Seafood snacks:Consists of snacks with seafood ingredients of fish and cuttlefish,
which can be fried, baked and grilled.
- Biscuits, wafers and extruded and stick crackers:Refers to fried or baked goods
that are crispy and brittle. This category includes biscuits and wafers. Crackers can be
further categorised according to theirform of snacks such as extruded36 or stick form.
Figure 1: Main products classification of the snacks category in Thailand
Snacks
Biscuits,
Seafood Potato Nuts & Confec-
Wafers, Popcorn Dry Fruits
Snacks Chips Beans tioneries
Crackers
Note: the categories highlighted are the categories of focus for SNNP
Source: Frost & Sullivan
RTD drinks:The RTD drinks industry refers to packaged beverages that are sold in a prepared
form and are ready for consumption. It comprises of two main categories, namely alcoholic and
non-alcoholic drinks. Non-alcoholic drinks include categories such asRTD jelly, Asian specialty
drinks, fruit juice, other functional drinks andRTD coffee or tea, among others.
With regards to RTD drinks sold by SNNP in Thailand, the main categories of focus are that of
jelly products (e.g. drinks, syrup) and Asian specialty drinks.
- RTD Jelly:Refers to gelatinous drinks that contain ingredients which aremade from
carrageenan powder or gelatine.The RTD jelly generally has athicker texture than
normal drinks and can be in different flavours, including fruits.
- Asian specialty drinks:Refers to drinks with ingredients such asgrass jelly
andcoconut and other plants water. It also includes drinks with sugar cane, longan,
pandanus leaf juice,chia seeds or basil seeds, and similar drinks with a juice content
below 100% but above 25%.Some Asian specialty drinks may include Nata de Coco.
36
Extruded snacks are prepared using extrusion method, a process which combines several units of operations
including mixing, cooking, kneading, shearing shaping and forming.
IMR Report Page 15

Figure 2: Main products classification of the RTD drinks category in Thailand
RTD
Drinks
Non-
Alcoholic
alcoholic
Other Energy
Asian RTD
RTD Func- & Soft Bottled
Specialty Juices Coffee/ Milk
Jelly tional Sports Drinks Water
Drinks Tea
Drinks Drinks
Note: the categories highlighted are the categories of focus for SNNP
2.2 INDUSTRY DYNAMICS

Sustained economic growth and growth of disposable income
Household income in Thailand has grown rapidly over the past decade in line with growing
urbanisation. The sustained economic growth supported the growth of the middle-income
population and a stable employment rate,especiallyamongwhite collars. The white collar
employment grew from 5.9 million in 2012 to 6.8 million as of the third quarter of 2016 at a
CAGR of 3.7%.37 Simultaneously, Thailand’s average annual salary increasedat 5.2% in 2017
and at 5.5% in 2018.38 The GDP per capita has continued to grow, indicatingoverall economic
well-being of the economy. 39 The growth of disposable income supports the spending in
consumer goods, including food & beverage products.
Chart 2-1: Employed persons with occupation within the white collar sector (in
thousand), in Thailand, 2012-Q3 2016
CAGR 2012 – Q3 2016: 3.7%

No. of employed
(in thousand)
4,000
persons
6,881 6,971 6,767

3,000 5,856 6,219
2,000
1,000
0
2012 2013 2014 2015 Q3 2016
Note: Estimation based on occupation categories of legislators, senior officials, managers, professionals,
technicians, and clerks across all industries
Source: National Statistical Office, Thailand
Increasingconsumption of ready food & beverage
Consumers in Thailand are increasingly adopting a modern urban lifestyle that encourages a
higher expenditure. Major urban centers such as Bangkok continue to be the hub of urban
consumption. As per the World Bank, 10 million people out of the total population of 68 million
live in Bangkok. The population in main urban areas is more exposed to product launches
through advertisements on billboard, media broadcast or digital advertising. Besides, on top of
37
National Statistical Office, Thailand
38
Willis Towers Watson: “2017 General Industry Total Rewards Survey”
39
World Bank
IMR Report Page 16

physical points-of-sale, the possibility topurchase online provides an additional avenue to
purchase food & beverage products, especially packaged food and RTD beverages. With
improvement in technology and greater convenience, vending machines have started to appear
in Thai retail scene, providing an additional layer of convenience in purchasing packaged food
and RTD beverages. Apart from captive areas as offices, cafeterias, they are increasingly being
installed in convenience stores.Overall, ready to eat meals and drinks segments have been
among the fastest growing food & beverage products in Thailand, due to their growing demand
caused by an ever busier lifestyle of urban workers, and wide availability in modern retail stores
nationwide.
The market of ready meals continues to be driven by factors such as their greater availability in
large supermarkets and convenience stores, and the launch of more menus / options, which
makes the products offering more easily available and attractive for consumers.
Chart 2-2: Ready meal localconsumption in Thailand, 2013-2023F
Sales Sales per capita 465

40.0 409 500
Sales per capita in THB

361
Sales in THB billion
30.0 319 400

284
234 255 300
195 214
20.0 157 176
31.7 200
24.6 27.9
10.0 19.3 21.7
13.1 14.5 15.8 17.3 100
10.5 11.8
0.0 0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
Note: Ready meal includes food products that are ready for consumption (with no or minimal addition of
ingredients) and require only to be warmed
The market for packaged food continues to be driven by new products launches by
manufacturers, with new products more aligned with the changing preferences of consumers,
among others with the introduction of more “healthy” packaged food options. Due to the
growing demand by consumers, retailers are allocating more spaces for packaged food.
Chart 2-3: Packaged food in Thailand, 2013-2023F
Sales Sales per capita 9,200

800.0 8,474 10,000
7,249
7,827 Sales per capita in THB
600.0 6,027 6,313 6,748 8,000

5,400 5,710
4,836 5,113 6,000
400.0
627.6 4,000
200.0 407.7 428.0 458.2 493.1 533.0 577.7
322.9 342.6 363.1 385.2 2,000
0.0 0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
The market is driven by the launch of new types of snacks (e.g. chips, biscuits, rice snacks,
snacks with nuts and seeds), such as those richer in protein and overall offering a healthy
value-proposition to consumers. Among the driving trend by consumers, particularly by
consumers in urban areas, is the fitness trend: consumers search more for products to meet
their energy needs for sports activities.
IMR Report Page 17

Chart 2-4: Snacks in Thailand, 2013-2023F
2,357
180.0 Sales Sales per capita 2,092 2,500

1,875
1,698 2,000
130.0 1,439 1,555
1,202 1,293 1,373 1,500
1,053 1,121
80.0 160.8
115.5 127.7 142.6 1,000
87.2 92.9 97.5 105.6
30.0 70.3 75.1 80.9
500
-20.0 2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F 0

The introduction of the sugar tax impacted the market for non-alcoholic drinks, in particular
product categories such as carbonated drinks and juices. Nevertheless, manufacturers are
adjusting their products offering to reduce the sugar content and to meet the changing
requirement of healthier drinks by consumers. Among others, manufacturers have introduced
various fruit-flavoured products (e.g. apple, watermelon, lychee) and products with vegetable
extracts (e.g. carrot, spinach, broccoli), both to target to consumers searching for healthier
drinks, as well as consumers continuously searching for novelty and new innovative products.
In addition, manufacturers have also introduced new packaging to differentiate their offering
from the competition.
Chart 2-5: Non-alcoholic drinks in Thailand, 2013-2023F
Sales
Sales per capita 4,000
3,253 3,380

2,944 3,032 3,135
2,806 2,803 2,877

200.0 2,574 2,624 2,719 3,000
2,000
100.0 206.2 213.5 221.8 230.6
171.8 175.8 182.9 189.3 189.6 195.0 199.9
1,000
0.0 0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
Note:“non-alcoholic drinks” includes water, juices, RTD coffee and tea, energy drinks, among others
Shrinking household size supporting the demand for smaller packages
Household size in Thailand has continued to shrink. During the period 1990-2010, the
household size in Thailand has dropped from 4.4 to 3.1 persons. 40The emergence of a larger
number of husband-wife only family, and of single-person family, has been prominent. The
husband-wife only family grew three-times during the period, while the classic nuclear family
with parents and child recorded a decline by half. Single-person household during the same
time doubled.41 The trend has been observed not only in urban areas but also in rural regions.
Smaller households are driving the demand forsmaller quantity packages across packaged
food. They also similarly emphasize more on the convenience factor, which include easy-to-
serve and portion-controlled products, as well as products that require less time for cleaning-up
after their consumption.This has led, among others, to the growing demand for ready-to-eat
snacks and meals, juices and beverages.
40
UNFPA, The State of Thailand’s Population 2015: Features of Thai Families in the Era of Low Fertility and Longevity,
2016
41
UNFPA, The State of Thailand’s Population 2015: Features of Thai Families in the Era of Low Fertility and Longevity,
2016
IMR Report Page 18

Urbanisation and changes in lifestyle
The ongoing urbanisation process is leading to changes in consumers’ preferences.
Consumers spend longer hours at work or commuting, leading to less time for self-cooking or
grocery purchases. At the same time, per capita income has also been on the rise. In thewake
of these developments, consumers are opting for convenience to save time and cooking effort,
as they can afford packaged food & beverage products. Another result of urbanisation isthe
increased female participation in the workforce. In 2018, 45.7% of the labour force in Thailand
consisted of females.42This led to less time for women to spend in housework such as cooking
and cleaning. These factors have continued to drive the consumer demand for fast and
convenient food options such as packaged meals, frozen food,and packaged snacks.
Besides, there are more consumers looking for food or beverage options during irregular hours
such as late evening or early morning due to their work schedules or nightlife. Longer working
hours, longer commuting distances,as well as irregular lifestyle and work schedules, have
continued to fuel the demand for on the go snacking and energy food. This demand translates
into the need for packaged RTD drinks such as juices, protein snacks, among others. Children
in urbanarea are more exposed to packaged food &beverage products, due to theirwide
availability, in-turn impacting their choices. The higher disposable income coupled with
convenience for parents and choicesfor children makes packaged snacks and juices an
attractive choice.
Table 2-1: Urbanisation rate, selected countries in SEA, 2017 2020 and 2050
Country 2017 2020 2050
Thailand 48% 51% 70%
Lao 34% 36% 56%
Myanmar 30% 31% 47%
Vietnam 35% 37% 57%
Cambodia 23% 24% 41%
SEA 48% 50% 66%
Note: SEA data is derived by Frost & Sullivan with the exclusion of high-income nations. As of 2017,
Singapore has already achieved 100% urbanisation
Source: World Bank for 2017 data; United Nations (“UN”), Department of Economic and Social Affairs,
Population Division (2018). World Urbanization Prospects: The 2018 Revision Database for 2020 and
2050 data
Thai consumers are increasingly willing to spend more for premium products. The sales value
of premium products is growing faster than total sales for categories, such as personal care,
household, impulse43and beverage products44. Premiumisation is becoming a key driver for the
growth in sales value. The addition of premium lines is contributing to nearly half the growth
ofsales value for selected product categories 45, 1.4% out of total 3.1% growth for personal care
products, 1.4% out of total 3.5% growth for household products, and 0.8% out of total 5.2%
growth for impulse products, in 2018 compared to 2017. Accordingly, Fast-Moving Consumer
Goods (FMCG) companies are leveraging on this growth opportunity by introducing more
premium products, with the share estimated to have reached approximately 31% of total FMCG
products.
Growing demand for healthier products
Thailand has been witnessing a chronic rise of obese individuals, particularly among the
youngsters. A Thai Public Health Ministry report in 2016 indicated an increase in the obesity
rate by 36% in just 5-years. Among adults, Thailand stands second in Southeast Asia for
42
World Bank, Labour Force, Female (% of Total Labour Force), last updated September 2018, retrieved from
https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS?locations=TH&view=chart
43
Impulse includes products such as chocolate biscuits, confectionery, snack foods, among others
44
Marketingoops, April 2018, https://www.marketingoops.com/news/biz-news/fmcg/
45
The Momentum: March 2019, https://themomentum.co/whats-next-in-2019-nielsen/ . On top of the addition of
premium lines, other factors such as inflation and sales volume growth are contributing to the total growth of sales
value
IMR Report Page 19

obesity, with an average of 32%, only behind Malaysia which has a 44% obesity rate46.In the
past years, there has been increased awareness about the issuewith rising education and
government efforts in policy and taxation. The Government of Thailand addressed this issue by
imposing a sugar tax and changing the excise tax scheme. In addition,the Governmentof
Thailand and health agencies have been running campaigns to instill a healthy lifestyle and
choices among Thai citizens. With increasing health challenges, consumers have started to
shift their choice of food & beverage products towards healthier options such as natural,
minimally processed food and drinks with lower sugar content.
This shift in demand is supported by the growth of the household incomeand by a more
sophisticated younger customer base. The increased household incomeallows customers to
pay a premium price for organic products. The organic food & beverage industry in Thailand,
though in its nascent stage, has been growing;the organic food market grew at a CAGR of 11.3%
and the organic beverages market grew ata CAGR of 7.5% in the period 2011-2016.47
High protein content snacks or bars are another emerging category in the Thai food market.
With an increasing emphasis on eating healthy, within the tight schedule of urban consumers,
protein-based snacks have become a choice product for urban youth. Meat-based, fish and
seafood snacks along with snack bars with cereal bars have increased in demand. The meat
snacks market in Thailand has witnesseda positive growth, registering a CAGR of 2.1% during
the period of 2013-2018.
Chart 2-6: Meat snacks market in Thailand, 2013-2023F
1.5 Sales Sales per capita 16.8 20

16.5

14.7 15.0 15.1 15.4 15.7 16.0 16.2
14.1 14.4
15
1.0
10
0.5 1.01 1.02 1.04 1.07 1.09 1.11 1.13 1.15
0.94 0.96 0.99
5
0.0 0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
Apart from meat and cereal bars, seafood snacks are also increasing in demand.48&49 With the
rapid economic development inThailand and overall in the ASEAN region (which is contributing
to the increase in disposable income) the preferences of consumers are changing towards a
higherintake of protein food (including red meat, white meat and seafood). In particular, the
consumption of seafood has been increasing due to public awareness on the benefits of
consuming seafood as a main source of protein intake as compared to red meat50.
Additionally, the packaged food & beverage products are often claimed to be fortified with
additional vitamins and minerals, making them a preferred choice for daily nutrient intake.
Some products also come with functionalingredients such as collagen, which attracts the
groups of consumers who areconcerned about beauty and personal care.
46
Thailand Overweight Prevalence Second In Southeast Asia, Thailand Business News, last updated on Mar 23, 2018,
retrieved from https://www.thailand-business-news.com/asean/49065-thailand-ranks-second-asean-prevalence-
obesity-mcot-net.html
47
Thailand: Food Industry, Board of Investment, Thailand
48
https://www.marketresearch.com/GlobalData-v3648/Meat-Snacks-Savory-Thailand-Outlook-12090496/
49
Thailand Food Processing Ingredients, 2018, USDA FAS GAIN report
50
Frost & Sullivan analysis
IMR Report Page 20

Chart 2-7: Healthy packaged food in Thailand, 2013-2023F
20.0 Sales Sales per capita 300

241.0
210.8
15.0 186.3
166.1 200
133.2 135.5 149.1
10.0 104.4 115.3 126.8
93.9 16.4
12.7 14.4 100
5.0 9.2 10.1 11.3
7.0 7.8 8.6 9.0
6.3
0.0 0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
In addition, the aging Thai population creates new opportunities for the sale of healthy food &
beverage products. By 2016, Thailand’s share of elderly population had reached 11%, and it is
projected to be 25% of the total population or 17 million by 2040.51Senior citizens spend more
on healthy food & beverage products as a part of their healthier lifestyle and medical needs.
2.3 INDUSTRY SIZE
2.3.1 Snacks
Thailand’s snacks market is among the largest and most diverse snack markets in the region,
with a large number of domestic and international brands actively present in the segment. The
segment has recorded a strong growth with key driving factors such as aggressive advertising
and marketing, along with steady increase in demand for healthy snacks. Overall, the snacks
market in Thailand is expected to grow faster in the period from 2018 to 2023 compared to the
growth achieved in the period from 2013 to 2018. This is due to the expected faster GDP and
GDP per capita growth, and the expected recovery of retail sales in the country as the
economic conditions improve.
Seafood snacks
The market for seafood snacks grew in the period 2013-2018, with the growth being driven by
sales in convenience stores. Due to its domestic popularity, seafood snacks may be consumed
across all demographic groups, with children, teenager and people of working age, in particular,
driving the market growth.In the first three months of 2019, the market for seafood snacks grew
by 8.4% compared to the same period in 2018, reaching sales for THB1,149 million, compared
to THB1,060 million in the first three months of 2018; the growth was largely driven by the
higher sales of fish snacks and by the introduction and fast sale growth of new cuttlefish snacks.
51
Thailand Economic Monitor- June 2016 Aging Society and Economy, World Bank
IMR Report Page 21

Chart 2-8: Domestic Retail Sales of Seafood snacks in Thailand, by Value (in THB million)
and Volume (in Kg million), 2013 – 2018 and 2018-2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
Retail Sales Volume = 2.9% Retail Sales Volume = 5.6%
10 Retail Sales Value = 3.6% Retail Sales Value = 6.3% 8,000
9 6,271 7,000
5,904
Retail Sailes Volume
Retail Sales Value

8 5,226 5,513
(in THB million)

6,000
4,625 4,866
(in Kg million)
7
4,217 4,252 5,000
6 3,881 3,982 4,066
5 4,000
4 7.7 8.2 3,000
6.5 6.9 7.3
3 5.5 5.6 5.8 5.8 6.2
5.4 2,000
2
1 1,000
0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Volume (in Kg million) Value (in THB million)
Source: Frost & Sullivan Analysis

Within the seafood snack category, both fish and cuttlefish snacks recorded a positive growth.
The cuttlefish market grew at a CAGR of 1.4% in the period between 2013 and 2018. In the first
three months of 2019, the market for cuttlefish snacksgrew by 5.5% compared to the same
period in 2018, reaching sales for THB421 million, compared with THB399 million in the first
three months of 2018. The market growth was supportedby the introduction and fast sale
growth of products such as Bento Crispy Squid Seafood Snack Angry Spicy flavour. The
growth rate is expected to accelerate in the period from 2018 to 2023 due to the continuous
introduction of new product varieties.
Chart 2-9: Domestic Retail Sales of Cuttlefish snacks in Thailand, by Value (in THB
million) and Volume (in Kg million), 2013 – 2018 and 2018-2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
Retail Sales Volume = -0.6%
Retail Sales Volume = 2.8%
2.5 Retail Sales Value = 1.4% Retail Sales Value = 4.7% 2,152 2,500
2,046
1,850 1,936
1,712 1,677 1,709 1,776

Retail Sales Value
2.0 2,000
1,593 1,629 1,659
(in THB million)
(in Kg million)
1.5 1,500
1.0 1.8 1.9 1,000

1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.8
0.5 500
0.0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Biscuits, wafers and extruded and stick crackers

The market grew in the period 2013-2018.The growth rate is expected to increase in the period
2018-2023F, with new products expected to be launched and rising demand among children
and teenagers.In particular, new small companies are expected to launch new products,
contributing to the higher fragmentation of the market. Large established brands are expected
also to launch new healthy varieties (e.g. whole grain biscuits, higher percentage of natural
ingredients) of their products with different flavours, in line with the changing demand from
consumers.
IMR Report Page 22

Chart 2-10: Domestic Retail Sales of biscuits, wafers and extruded and stick crackers in
Thailand, by Value (in THB million) and Volume (in Kg million), 2013 – 2018 and 2018-
2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
140 Retail Sales Value = 4.6% Retail Sales Value = 6.4%
34,086 40,000
32,009 35,000
120 29,992
28,189
Retail Sales Value

26,352
(in THB million)

24,38324,956 30,000
(in Kg million)
100
20,826 21,71922,857 25,000
19,959
80
20,000
60 112.0
96.9 101.6 106.8 15,000
40 74.2 76.9 79.6 82.7 87.3 88.2 91.9 10,000
20 5,000
0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F

Specifically, the market segment for extruded and stick crackers,which is part of the snacks
market in the above chart, grew continuously in the period from 2013 to 2018. In particular, the
market grew at a CAGR of 4.4% in the period from 2013 to 2017, while sales slowed down in
2018 due to the introduction in the market of other snacks (e.g. cereal and energy bars, fruit
snacks), causing consumers to temporarily switch their purchases and try out new products. In
the first three months of 2019, the market for extruded and stick crackers grew by 3.4%
compared to the same period in 2018, reaching retail sales valueat THB3,203 million compared
to THB3,099 million in the first three months of 2018. Similarly to other product categories, the
sales of extruded and stick crackers in Thailand are expected to accelerate in the forecast
period, to grow at a CAGR of 5.5% from 2018 to 2023F.
Chart 2-11: Domestic Retail Sales of Extruded and Stick Crackers in Thailand, by Value
(in THB million) and Volume (in Kg million), 2013 – 2018 and 2018-2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
70 Retail Sales Value = 3.3% Retail Sales Value = 5.5%
17,017 20,000
16,191 18,000
60 15,318
14,561
Retail Sales Value
13,17713,04713,647 16,000
(in THB million)
12,245
(in Kg million)
50
11,10911,45311,762 14,000
40 12,000
10,000
30 56.6 8,000
51.3 54.1
20 39.3 40.2 41.7 44.8 44.2 46.0 49.0 6,000
38.3
4,000
10
2,000
0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
2.3.2 RTD drinks

Similarly to the snacks market, also the market for RTD drinks is expected to grow faster in the
period from 2018 to 2023 compared with the period from 2013 to 2018, due to the expected
faster growth of GDP, GDP per capita and overall retail sales, among other factors.
Manufacturers are continuously introducing new RTD drinks to meet the changing demand
IMR Report Page 23

from consumers and as consumers look for new types of drinks. New small companies are also
entering the market, for example providing organic juices that are sold in their own physical
stores or in cafes, particularly in urban areas.
RTD Jelly
The vast range of products under RTD jelly caters to the large segment of children and
adults.Frost & Sullivan estimates a positive and faster growth for the period 2018-2023F
compared to the period 2013-2018, based on new product formulations with lower sugar
content, launch of new products packaging and ingredients, and increase in demand for healthy
options like herbal RTD jelly and coconut RTD jelly, ready for on-the-go consumption.In
addition, new players are expected to enter the market and launch jelly products, introducing
new flavours.In 2017, the sales of RTD jelly declined compared to 2016, as a short-term
adjustment due to price adjustment by increasing in jelly cup price, which resulted in
temporarily lower sales for RTD jelly in cup and pouch;the sales of RTD jelly recovered again in
2018. In the first three months of 2019, the market for RTD jelly grew by 20.2% compared to
the same period in 2018, reaching sales for THB632 million, compared with THB526 million in
the first three months of 2018.
Chart 2-12: Domestic Retail Sales of RTD Jelly in Thailand, by Value (in THB million) and
Volume (in Kg million), 2013 – 2018 and 2018-2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
Retail Sales Volume = -0.3% Retail Sales Volume = 2.7%
70 4,500
Retail Sales Value

3,324 4,000
(in THB million)

60 3,115
(in Kg million)
3,500
50 2,557 2,731 2,928
2,410 3,000
2,205 2,217 2,052
40 1,934 2,021 2,500
30 2,000
43.9 43.7 45.5 43.3 44.0 45.2 46.7 47.9 49.3 1,500
20 42.4 38.7 1,000
10 500
0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F

Chart 2-13: Domestic Retail Sales of RTD Jelly in Thailand, by type (cup, pouch, bottle),
by Value (in THB million), 2013 – 2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F: Cup
Cup = -8.1% Cup = 1.1% Pouch
3,500 Pouch = 12.8% Pouch = 11.3% Bottle
Bottle = N/A Bottle = 2.7%
Retail Sailes Value
3,000 472
(in THB million)
461
451
2,500 436
- 424
- 414
2,000 - - 94
917 1,756 1,948
627 748 1,024 1,417 1,584
1,500 948 1,142 1,269
1,000
1,307 1,273 1,288 1,193
500 1,010 855 865 878 893 899 904
0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Note: the value for each type includes other types of jelly products which are not categorised as cup,
pouch or bottle.
IMR Report Page 24

Asian Specialty Drinks
With increased taxes on sugar content and rising awareness about health, Thailand’s Asian
Specialtydrinks segment is projected to continue growing.The growth is expected to accelerate
also due to new products with new ingredients continuously being launched in the large
distribution, while small local producer will continue to offer traditional drinks.
Chart 2-14: Domestic Retail Sales of Asian Specialty Drinks in Thailand, by Value (in THB
million) and Volume (in Litre million), 2013 – 2018 and 2018-2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
5,713
5,222 5,466 6,000
100 4,992
Retail Sales Value

4,545 4,757
(in THB million)

(in Litre million)
4,377
4,062 4,211 5,000
80 3,715 3,881
4,000
60
97 102 3,000
86 90 93
40 74 77 80 82
68 70 2,000
20 1,000
0 0
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F
Volume (in Litre million) Value (in THB million)
2.4 SUPPLY CONDITIONS
2.4.1 Manufacturing trends

Thailand’s food & beverage industry is globally recognised for its cost-effectiveness, variety and
quality control. In recent years, manufacturers, suppliersand distributors have increased their
adherence to several global quality and standards certifications to boost consumer confidence
and competitiveness.Below are some of the latest developments in the Thai manufacturing
industry for food & beverage products.
Importance of quality control and reliable quality of products
The Thai food industry has adopted quality and food safety norms as a mandatory part of its
supply chain. Food manufacturing and processing companies need to adhere to multiple safety
and quality standards during production and post-production processes,such as ISO, GMP,
GHP, HACCP,etc.52 Quality control is an important competitive aspect in Thailand’s consumer
market. Consumers are increasingly aware of food safety and are continuously exposed to
high-quality imported products. Urban centers and other fast-growing markets are willing to pay
a premium for food & beverage products which are deemed to be of higher quality. Quality
control also plays an important role in reducing wastage, maintaining product standards and
ensuring a long shelf life. The importance of achieving quality standards is increasing as
consumers demand is shifting from local fresh food to packaged and frozen food. Key factors
driving the shift arethe convenience of food,longer-shelf-life, readily consumable and ease of
storage. The growing consumers’awareness ofwellness and healthy food products, and the
exposure to imported products,have raised the bar for domestic Thai manufacturers to stay
competitive.
52
GMP (Good Manufacturing Practice); GHP (Good Hygiene Practice), HACCP (Hazard Analysis and Critical Control
Points)
IMR Report Page 25

Automation and labor efficiency
The Thai food industry increasingly imported modern food processing machinery after the
introduction of GMP standard for food safety equipment in 2003. Since then, theintroduction of
automated systems and robotics across different stages of the value chain in the food industry
has successfully improved the overall efficiency level. As per the growing domestic and global
demand for food safety, the standardsin food machinery and equipment covering all processes
involved in food production have been continuously raised. In 2016, the Thai food processing
industry imported equipment worth more than USD235 million (~THB8,332.9 million53). Some
of the key machinery imports have been machines for preparation or manufacture of food and
drink, presses for cider and juices, dairy machinery, machines for cleaning seeds, cereal, and
machines for cleaning and dishwashing. 54 & 55 The Thai government has included the Food
Industry in targeted 10 sectors as part of the effort to introduce a higher level of automation and
robotics under the initiative of Thailand 4.0. The Thai food industry is looking to introduce more
automated processes to achieve a greater output and maintain a higher level of quality.Some of
the challenges such as shortage of skilled workforce, immigrant labor issues and cost-
competition are also motivating the adoption of automation in the food & beverage manufacture,
processing and distribution.56
More than 80% of the Thai food industry is made up of small and medium scale companies,
which facefinancial difficulties to implement capital intensive processes. As of 2017, alarge part
of the food value chain was reliant on unskilled and semi-skilled workforce.57
Working on sustainable business practices
The Thai food processing industry in recent past has been under scrutiny from global
organisations and regulators for some unsustainable practices. As an example, Thailand
received a “yellow card” 58 and a down-rating for its unsustainable fishing practices, human
rights abuse and Illegal, unreported and unregulated (IUU) fishing. Since then, government
agencies have been promoting environment-friendly and sustainable practices across theentire
value chain of the food industry. Producers and distributors are motivated to publish their
sustainability reports and conduct frequent inspections of their supply chains. Market position
and competitiveness has been a key driving factor for inducing sourcing and supply best
practices. Some of the leading manufacturers have stepped towards a vertical integration to
assure accountability of their sourcing, while others have been doing audits of their suppliers.
Thai consumers have been more aware and are demanding products which have traceable and
accountable supply chains. They are showing anincreasing inclination towards products which
are organic and certified under best practices, even if having to pay a premium.59&60&61
Sustainable practices (e.g. deployment of roof-top solar plants and water-management systems)
have also emerged as a source of saving and cost-reduction for food & beverage
manufacturers. As an example, CP Foods Thailand, a large Thai agro-industrial and food
conglomerate, has signed the largest roof-top solar plant with a 40MW capacity as its
sustainable energy initiative, to reduce electricity bills and also to help theenvironment by
reducing 28,000 tonnes of carbonemissions annually.62
Sourcing of raw materials from suppliers, both domestic and international
53
Based on average exchange rate of USD1=THB35.4593 in the year 2016
54
Thailand Food Processing Indusrty, 2014, SEA-Lac Trade Center
55
UN Comtrade Database
56
Thailand Food Industry, Board of Investment Thailand, 2018
57
Opportunities in Thailand’s Manufacturing Sector, Business Sweden in Thailand, June 2015
58
The ASEAN Post: Thailand struggles with fisheries management, February 2019
59
https://asia.nikkei.com/Life-Arts/Life/Thai-businesses-seek-a-more-sustainable-path2
60
https://www.bangkokpost.com/news/special-reports/1181661/solving-a-problem-organically
61
https://www.foodnavigator-asia.com/Article/2018/08/15/Thai-food-trends-Plant-based-diets-and-personalisation-on-
the-rise-as-health-awareness-increases
62
https://www.foodnavigator-asia.com/Article/2018/07/05/CP-Foods-strikes-deal-for-Thailand-s-biggest-solar-rooftop-
project-in-sustainable-energy-drive
IMR Report Page 26

TheThai agricultural sector is highly diversified and competitive, providing an advantage for
food & beverage manufacturers to source locally produced agricultural raw materials. With the
improvement in R&D and agricultural methods, Thai food producers have been able to deliver
better quality produce for both the domestic and export markets. Thai manufacturers and food
processing companies source close to 80% of the raw material from local suppliers as they are
cost-effective and fresher than imported products. However, most of the domestically sourced
materials are of low-value. With theincreasing influence of the Chinese and Japanese
cuisines 63 , and growing demand for western-style food & beverage products by Thai
consumers,the import of raw materials and ingredients have continued to rise.The Thai food
imports bill for 2017 was 16% up from 2016 at USD2.5 billion(~THB85.25 billion64). Thailand
mainly imports high-value raw materials and semi-processed ingredients from countries such
as US, China, Australia, New Zealand, India, Malaysia, Korea, and Europe, among others. Key
items of import have been dairy products, pulses, beef, grains, vegetable oils, bakery
ingredients and dried fruits & nuts.6566 Thai food manufacturers tend to switch suppliers to keep
it cost-effective, such as importing coconuts from Indonesia when prices are lower than the
domestic market. The import of high-value products is generally carried out using various free
trade agreements (FTAs) to avoid or reduce import costs, retaining cost-competitiveness.
Health and quality factors of imported products are important for competition as they are
generally demanded by consumers with the perception of imported products being superior to
domestic ingredients.
2.4.2 Distribution channels

Thailand has witnessed a sustained economic growth and rising income levels in parallel with a
rapid urbanisation rate. Thai consumers are demanding more variety, convenience
andcustomisation across different consumer goods in theretail segment. They are more
exposed to different brands and decision is widely influenced by digital and social media. The
impact of all the changes has been visible in the retail landscape of Thailand.
Chart 2-15: Retail Sales of traditional and modern trade (THB billion) in Thailand, 2013-
2023F
CAGR 2013 – 2018: CAGR 2018 – 2023F:
Traditional trade = 1.3% Traditional trade = 2.5%
3,000 Modern trade = 3.9% Modern trade = 5.9%
2,347 2,442
2,500 2,075 2,162 2,252
1,953 1,995
1,766 1,814 1,864 1,896
(THB billion)
Retail Sales
2,000
1,174 1,236
1,500 853 890 930 987 1,049 1,111
767 795 833
1,000
500 998 1,019 1,031 1,043 1,063 1,066 1,087 1,113 1,141 1,173 1,206
0
2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F 2023F
Traditional Trade Modern Trade TOTAL
63
https://www.foxnews.com/world/thailand-japan-share-mutual-affection-that-is-rare-in-asia
64
65
Retail Foods, Bangkok GAIN report 2017
66
Thailand Food Processing Ingredients, Bangkok GAIN report 2018
IMR Report Page 27

Chart 2-16: Retail Sales of traditional and modern trade (% of total) in Thailand, 2013-
2018E
100%
90%
80% 43.5% 43.8% 44.7% 45.0% 45.6% 46.6%
Retail Sales
Modern
(% of total)
70%
60% trade
50%
40% Traditional
30% 56.5% 56.2% 55.3% 55.0% 54.4% 53.4% trade
20%
10%
0%
2013 2014 2015 2016 2017 2018E
Modern trade channels are growing faster than traditionaltrade

Particularly in urban areas, smaller conventional neighborhood retail stores or ‘mom & pop’
stores are being continuously replaced by modern iterations of retailing. The regular markets
and wet-shopping areas are giving in to hypermarkets and supermarkets, which offer greater
variety and hygienic experience. While smaller local shopsare still the key retail channels
(particularly in semi-urban and rural areas) the number of convenience stores is growing faster
than the number of smaller local shops, as they offer more variety of products.
Table 2-2: Retail Sales of modern trade (THB billion) in Thailand, 2013-2018E
In THB billion CAGR
2013 2014 2015 2016 2017 2018E
2013-2018E
- Hypermarkets and
426 437 452 460 472 492 2.9%
Supermarkets
- Convenience stores
341 358 381 393 418 438 5.1%
and other modern trade
Total modern trade 767 795 833 853 890 930 3.9%
Note: “Other modern trade” include discount stores and other modern retailers located at petrol stations
Table 2-3: Retail Sales of modern trade (THB billion) in Thailand, 2018E-2023F
In THB billion CAGR
2018E 2019F 2020F 2021F 2022F 2023F
2018E-2023F
- Hypermarkets and
492 516 541 565 591 617 4.6%
Supermarkets
438 471 508 546 583 619 7.2%
Total modern trade 930 987 1,049 1,111 1,174 1,236 5.9%
Note: “Other modern trade” include discount stores and other modern retailers located at petrol stations
Table 2-4: Number of modern retail stores (in ’000) in Thailand, 2013-2018E
In ‘000 CAGR
2013 2014 2015 2016 2017 2018E
2013-2018E
- Hypermarkets and
1.27 1.35 1.46 1.52 1.60 1.66 5.5%
Supermarkets
12.27 13.00 13.78 14.69 15.88 16.76 6.4%
Total Modern trade 13.54 14.35 15.24 16.21 17.48 18.42 6.4%
Note: “Other modern trade” include discount stores and other modern retailers located at petrol stations.
CAGR calculated on the full estimated figure of the number of stores
IMR Report Page 28

Table 2-5: Number of modern retail stores (in ’000) in Thailand, 2018E-2023F
In ‘000 CAGR
2018E 2019F 2020F 2021F 2022F 2023F
2018E-2023F
- Hypermarkets and
1.66 1.73 1.81 1.88 1.96 2.02 4.0%
Supermarkets
16.76 17.74 18.72 19.71 20.61 21.51 5.1%
Total Modern trade 18.42 19.47 20.53 21.60 22.57 23.53 5.0%
Note: “Other modern trade” include discount stores and other modern retailers located at petrol stations.
CAGR calculated on the full estimated figure of the number of stores
With thebusy urban lifestyle becoming a norm, the frequency of consumers visiting traditional
markets has been dropping. Urban consumers prefer to purchase goods from convenient
location within their daily transit routes. The purchase volume from such convenience stores is
generally small and consists of impulse buy. Among the key products purchased are ready-to-
eat meals and drinks, and snacks, serving the increasingly busy urban working households.
Meanwhile, consumers seeking for a lower cost and for awider variety of branded itemsare
increasingly shopping in hypermarkets and supermarkets. Hypermarkets provide the variety
and large volume of traditional local wet-markets in a morehygienic and modern set-up, with
both fresh food and branded articles. Due to the high economies of scale, they also tend to be
cheaper than convenience stores, with discounted pricing. Hypermarketsare also developing
ways to attract a larger clientele, among other initiatives by setting-up dine-in and entertainment
options. Modern retail trade has also benefited from foreign investment by global
players.67&68&69
Convenience stores leading the growth of modern trade
While modern trade is out-pacing traditionaltrade channels, convenience stores are the fastest
growing segment within the modern retail channels owing to the widespread popularity,
increasing investment and easier to open locations. Convenience stores have been riding on
the changing shopping preference of consumers who buy smaller quantities and as per need.
Consumers don’t mind taking more frequent short trips to convenience stores, while purchasing
on impulse. Convenience stores also offer other useful neighborhood facilities like ATM,
vending machines, bill payments, mobile phone recharges, among others. A total of 70% of
sales in convenience stores is estimated to be generated from the sales of food & beverage
products, including ready-to-eat foods, bakery items, juices, RTD beverages. Supermarkets
have been capitalising on their ability to service middle and upper-income customers, who
demand a larger variety and quality of products. The availability of discounts is not considered
to be the primary decision making factor for customers. Customers focus more on daily
necessity products with a mix of fresh and branded food & beverage products. Supermarkets,
being relatively smaller in size compared to hypermarkets are often located in more convenient
shopping locations, and have larges SKU than convenience stores. These factors make them
ideal for a more frequent shopping destination, with more choices. 70&71
Traditional trade channels
Traditional retail trade channels continue to dominate the retail sale in food and non-food sales
in Thailand. The traditional trade channel consists of mom-&-pop stores, street vendors, carts
and wet markets. The unorganised retailers in the segment are often smaller in size and
present across streets, residential areas, semi-urban and rural areas. With changes in Thai
household structure, demand for product categories has changed, reflecting in SKUs being sold
in these traditional stores. The items now include not just locally produced, but also those from
neighboring countries along with traditional foods and snacks, confectionaries, beverages.
67
68
https://www.krungsri.com/bank/getmedia/7a996c83-a62d-4347-901a-
10c7c7ce1936/IO_Modern_Trade_180905_EN_EX.aspx
69
Thailand’s consumer shift towards modern retail options, Oxford University Group 2
70
Retail Foods, Bankok GAIN report 2017
71
Modern Trade, Thailand Industry Outlook 2018-20 Krungsri Research
IMR Report Page 29

Table 2-6: Retail sales (in THB billion) and number of stores (in ’000) in traditional retail
in Thailand, 2013-2018E
In ‘000 CAGR
2013 2014 2015 2016 2017 2018E
2013-2018E
Retail sales (in THB billion) 998 1,019 1,031 1,043 1,063 1,066 1.3%
Number of stores 789.0 795.7 803.3 811.1 818.1 822.7 0.8%
Table 2-7: Retail sales (in THB billion) and number of stores (in ’000) in traditional retail
in Thailand, 2018E-2023F
In ‘000 CAGR
2018E 2019F 2020F 2021F 2022F 2023F
2018E-2023F
Retail sales (in THB billion) 1,066 1,087 1,113 1,141 1,173 1,206 2.5%
Number of stores 822.7 827.8 832.7 837.1 841.1 844.7 0.5%
Within the total traditional retail stores, family-owned ‘mom & pop’ stores are estimated at
approximately 400,000 as at 201772, and are estimated to grow at a rate similar to the growth of
traditional retail stores in the period between 2018 and 2023. While facing competition from the
fast growing of modern retail segment, ‘mom & pop’ stores continue to remain relevant in the
groceries market, due to various benefits that modern retailers are not able to provide to
consumers, including: credit system (e.g. collect goods and clear all payments at the end of the
month, instead of paying for each transaction), small purchases (e.g. purchase few items within
a pack, for example few cigarettes instead of the whole pack), return (e.g. ease in exchanging
for a different item after purchase), and flexibility (e.g. possibility to purchase items such as
alcohol even during hours when sales is prohibited). Some of these benefits may be attributed
to the personal relationships that store owners establish with their customers.
Most of traditional trade shoppers visit the store for planned purchases, which include daily
meals and immediate consumption items, implying a greater connection between seller and
consumer. 73 Although smaller, sales per store in traditional channels are growing faster
compared to sales per store in modern channels. This is due to the growth rate of modern
channel stores surpassing the growth in total sales.
Traditional channels are still considered to be the most effective in reaching out to the whole
population, even in centers outside major urban areas. Their knowledge of local tastes and
consumer behavior along with personalised service, something absent in modern retail
channels, has been the key strength. With improvement in in-store infrastructures, such as
chillers and refrigerators, and with evolving SKUs, they can cater to a more diversified
consumer demand in the food & beverage segment.74 Overall, traditional trade represents the
most frequent point of contacts for consumers, due to the large number of stores across the
country in urban, semi-urban and rural areas, including areas where modern retailers have yet
to penetrate. Traditional trade therefore offers the most important channel for food & beverage
manufacturers to reach fast to the wide population and enlarge fast their consumers base.
Vending Machines
Vending machines are slowly becoming part of the modern retail landscape, primarily in urban
areas of Thailand. Though the segment is growing steadily, it is still scattered. Most of the sales
achieved are through captive audience in office, institutions, factories, among others. 75 With the
continuous evolution in technology and nature of products that could be sold via machines, they
have been able to sustain their market usefulness. Vending machines can be better alternative
to store formats in expensive and low space areas for distribution of food & beverage products
72
SME.go.th, https://sme.go.th/upload/mod_download/download-20190312092331.pdf
73
Maximising Traditions- The shop. Shopper. Shopkeeper, Neilsen, October 2015
74
The Power of Traditional Trade Grocery Stores in Battle for Market Share, Neilsen, October 15, 2015, retrieved from
traditional foods and snacks, confectionaries, beverages
75
Vending Machine in Thailand, Euromonitor International, Jan 2019, retrieved using link
https://www.euromonitor.com/vending-in-thailand/report
IMR Report Page 30

of daily or immediate consumption. They are also being increasingly installed at convenience
stores enabling no-hassle purchase experience for consumers.76
Online shopping changes the purchasing patterns of consumers
While themajority of food & beverage purchases are still made in physical stores, the tendency
to purchase online is growing at a faster rate.The online food & beverage market in Thailand is
estimated to have a penetration of close to 18%, and to be among the fastest growing sales
channel, with revenue increasing from USD171 million in 2017 (~THB5,831.2 million 77) and
estimated to reach USD330 million (~THB10,512.2 million78) for theyear 2019. With increasing
internet penetration digital influence is also growing among consumers.
2.5 COMPETITIVE LANDSCAPE

The markets for snacks and RTD drinks are highly fragmented, although dominated by few
large players which, over the years, have established their presence as leaders. New entrants
into these markets would need significant investments and extensive marketing efforts
(advertising and sales promotion activities) to gain acceptance and compete successfully with
established players.
While global trends are starting to take root among Thai consumers, local and niche brands are
growing fast as they develop new product varieties targeted to the need of Thais. The trend
towards more health-conscious consumption has forced manufacturers to improve existing or
develop new products in response to the constantly changing consumption behaviours.
2.5.1 Competitive trends

Importance of a wide distribution network across both traditional and modern retail
The distribution is both a big challenge and opportunity for any food & beverage manufacturer /
distributor in Thailand. The country’ retail grocery sector is a mix of modern and traditional trade.
Modern trade is growing fast, but traditional trade will continue to dominate for the coming
years. While with changing market trends, convenience stores and supermarkets are
increasingly becoming choice distribution option for many F&B companies, they are limited to
certain urban centres. With zoning restrictions, larger format stores are generally placed away
from population centers. The Shop-houses or mom-&-pop stores are still the key retailing
channel for food & beverage products in semi-urban and rural centers. Within urban areas also,
they are located generally in community areas, proving to be easily accessible purchase point.
Companies with an extensive distribution through both traditional and modern retail channels
are able to reach to a wider customer base nationwide.
New demand trends push companies toward continuous products development
With increasing competition, companies need to stay focused on consumer tastes and
changing preferences to be able to cater to them. Internet, social media and other forms of
cultural interactions have infused a cross-cultural food-habit. Consumers often demand a
western product which has been customised to local taste. Pizza is one example,customisedit
with local sauces to make it more Thai. Thai consumers are increasingly moving towards plant-
based food and nutrient sources, with more than 3/4 th comparing them to be as nutritious as
animal-based protein. The change in consumer demand presents itself has a challenge to
existing product line while creating the opportunity of developing new products for future
demand. Another consumption trend is the use of meat-based food as mini-snacks and the
inclusion of more seafood in different forms. 79&80 Both trends present a competitive market
which requires new and efficient product development processes. Thai manufacturers have
76
77
78
Based on estimated exchange rate of USD1=THB31.8550 in the year 2019
79
https://www.foodnavigator-asia.com/Article/2018/08/15/Thai-food-trends-Plant-based-diets-and-personalisation-on-
the-rise-as-health-awareness-increases
80
https://www.foodnavigator-asia.com/Article/2018/06/25/10-global-food-and-beverage-trends-transforming-the-Thai-
market
IMR Report Page 31

already started exploring opportunities, such as pulses as snacks. As an example, Hanami
Foods Company Ltd. and Modern Food Industries, companies from Bangkok and India
respectively, have already launched green-peas based snacks in Thailand.81
Thai juice and drinks manufacturers have been forced to launch new versions of juice using
healthier methods as cold-pressed and raw-juices. There are also versions of herbal-jelly drinks,
a traditional Thai beverage, based on coconut water to suit the modern taste. Lighter drinks are
also in demand, which has made manufacturers offer products with lower or no alcohol content.
Among drinks, the increasing demand for coffee flavoured products has pushed both local and
international players to update their products (e.g. the launch of Coca-Cola Coffee Plus, which
addresses the coffee flavour with 50% more caffeine and is positioned to be healthier with 50%
lower calories/ sugar 82 ). Consumers in the middle and affluent classes (MAC) 83 are overall
more aware about where ethical and sustainable sources of their products, and one such
product in the market is premium ice-cream with traceability to being farm-fresh. The rising
trend of eating healthy in veg categories has translated into new products such as new cereal
bars.
Demand for low-sugar and low-calories ingredients
Thailand has the second highest obesity prevalence in Southeast Asia 84, with increasing sugar
in-take levels in daily diets. Along with natural sugar within food and drinks, there is a large
amount of added sugar which forms part of the everyday meal of Thai consumers. Green tea
and soft drinks are among the leading sources of added sugar in the daily diet of Thais. To fight
this endemic, government agencies and NGOs have started campaigns to educate people
about the harmful effects of consuming a large amount of added sugar. Thai consumers
nowadays are more aware and educated about sugar intake, with more than half associating
low-sugar with healthy food. Companies have been quick to address this need, with the
introduction of low-calorie products, such as cold-pressed juices, which have zero to very low
added sugar.
Higher nutrients and added vitamins products
With an increasingly busy and hectic lifestyle, Thailand’s new-age consumers are looking for
convenient options to meet their regular nutrient and energy intake. Juices, health foods and
functional beverages are among the most considered. Thailand as such has been experiencing
a continued increase in demand for low-sugar juices, fortified juices, imported and protein-rich
snacks, which are perceived to be healthier. Overall, the healthy food market in Thailand grew
over the past years.
Health benefits, value-added products innovations and value propositions support the
sale at a premium
With Thai consumers, particularly in urban areas, associating healthy living with having a
healthy diet, the Thai domestic food & beverage market is evolving. Driven also by the growth
of income and of the middle-class, consumers today are more willing to spend on ‘premium’
products and services. Consumers expect brands to also provide a customisation in product
choices. Nevertheless, the idea of healthy food differs between Thai consumers, with some
associating it more to natural food with no preservatives, and others considering high-protein
content to be a priority in healthy food.85
Another value proposition which allows food & beverage manufacturers to sell at a premium is
the use of ethical processes in sourcing and manufacturing of products. This is used by brands
to distinguish them from the competition, and provide innovative product offerings aligned with
changing customer preferences. For example, companies adhering to sugar tax guidelines will
have cost-advantages in the form of lower-taxes and positive-sentiment from consumers as
perceived healthier.
81
https://www.retailnews.asia/packaged-food-thailand-impulse-health-drive-premium-segments/
82
https://coconuts.co/bangkok/food-drink/robusta-cola-coke-to-launch-coffee-cola-hybrid-in-thailand/
83
MAC- Middle and affluent class, generally with monthly income of THS15,000 - THB 50,000
84
The Nation: Growing obesity: A huge economic burden on Thailand, November 2017
85
http://www.mintel.com/press-centre/social-and-lifestyle/thai-consumers-are-on-the-road-to-self-betterment-79-of-thais-
would-like-to-have-a-healthier-diet-in-2018
IMR Report Page 32

Processes which are deemed ethical and considered to be less-harmful to nature and societies
are also in high demand. This is a major issue in Thailand where, as an example, illegal
immigrants were found to be exploited in the fishing industry.86 Consumers are more aware of
these issues and are increasingly ready to pay a premium for transparency on where their food
is sourced from. Another example is of farm-fresh ethical food products which can be tracked to
their origin and is contributing to the well-being of Thai rural communities.87
Marketing activities are key to attract costumers’ interest and retain their loyalty
The competition in the Thailand food & beverage market has been growing, as the market
continues to grow across different segments. As an example, as per the Ministry of Industry,
there are more than 100 juice manufacturers in Thailand, making it a cluttered market-place.
Most of them cater to specific customer needs and have a different target audience. In this
crowded environment it is becoming compulsory for food & beverage brands to step-up their
marketing initiatives.
Online marketing activities
With a greater influence of the internet and social media, brands are increasingly reaching their
target market via online marketing campaigns. Thai consumers are in fact increasingly deciding
on their daily nutritional and diet intake from online searches. Another powerful digital influencer
is social media, from where a large number of urban consumers get the information on their
food habits.88 The growing influence of digital media is considered a key instrument to gain a
competitive advantage. A firm understanding of digital and social media trends can help brands
increase the loyalty of consumers. With active engagement as part of marketing activities,
brands can stand-out in the cluttered food & beverage market. In addition, the Fast-Moving
Consumer Goods (FMCG) and retail sectors are increasingly more focused on data analytics
and digital platforms to improve decision making on customer choices and trends.
In addition, social media with online shopping provides easier and expansive peer-to-peer
review and recommendation to its users, making consumers skewing their decision in favour of
products or brands which make them feel more associated or accepted in the society. Online
channels are also influencing the buying behaviors through bargains and discount deals, which
shape consumer habits.
Importance of packaging to preserve the freshness of the product, to attract the interest
of customers and to facilitate the on-the-go consumption
Consumers in Thailand are not only moving towards healthy ingredients and food, but are also
becoming increasingly aware of the food they consume. They are more conscious about
packaging and processing of the consumable food & beverage products and what keeps them
fresh till they are consumed. Quality control and international process certifications inspire
confidence in consumers toward the brand. Thailand has been a keen adaptor of packaging
technology with many multi-nationals setting-up shop. Thailand, with more than 2,000 food
packaging manufacturers, has been on the forefront of adapting to changing needs of the food-
processing industry. With a lot of emphasis on developing sustainable value-chains, eco-
friendly packaging is also increasing in demand. Consumers also look for light-weight packing,
easy-to-open and being able to preserve food longer once the package is open. With changing
lifestyle, customers often demand food that is conveniently packaged for consumption and can
be consumed as per the different need of the customers, including on-the-go. Hence
convenient packaging is fast-becoming one of the key determinants of purchase.
[This page is intentionally left blank]
86
https://articles.mercola.com/sites/articles/archive/2018/02/07/avoid-seafood-from-thailand.aspx
87
https://www.retailnews.asia/packaged-food-thailand-impulse-health-drive-premium-segments/
88
http://www.mintel.com/press-centre/social-and-lifestyle/thai-consumers-are-on-the-road-to-self-betterment-79-of-thais-
would-like-to-have-a-healthier-diet-in-2018
IMR Report Page 33

2.5.2 Profile of key players
Table 2-8: Profile of key players in Thailand in the product categories sold by SNNP, 2018
Key products portfolio
Listed Company name Year of Biscuit, Asian Key brands Profile
Seafood Jelly
establishment Wafer, Specialty
Snack RTD
Cracker Drinks
Diversified manufacturer and
No Srinanaporn Marketing PCL 1980 x x x x Bento, Lotus, Jele, Magic Farm
distributor
Yes P.M.FoodCo.,Ltd. 1977 x Taro Seafood snack maker and distributor
Baked squid and Coated peanuts
No T.Thai Snack Foods Co, Ltd. 1996 x Squidy
manufacturer
Yes Thai Union Group Public Co.,LTD 1977 x Fisho Focused on Seafood products
Baked squid and Coated peanuts
No Sun Yang Food Co., LTD. 1971 x Tao Tong
manufacturer
No CalbeeTanawatCo.,Ltd. 1980 x Jaxx Nutritious food products providers
No Useful Food Co., LTD. 1984 x Paprika, Potae, Cornae Snack and cereal manufacturer
No URC Thailand Co., LTD. 1992 x Roller Coaster Snack and biscuit manufacturer
Company involved in manufacturing,
Yes BerliJucker Public Co.,LTD 1882 x x Party, Kato, Kato shake
packaging and distribution
Beverage company. It merged with the
No Suntory Pepsico* Beverage Co.,LTD 1998 x Tawan
snack manufactures Frito-lay in 1965
No Hanami Foods Co., LTD. 1976 x Snack Jack Snack and cookie manufacturer
Provider of, among others, beverages,
No Thai Glico Co.,LTD. 1970 x Pocky
processed foods, dairy products
No European Food Public Co.,LTD 1984 x Pipo, Pipo Shake Jelly Confectionery and bakery producer
SappeBeautie, Beauty drink, Coffee, Jelly, Seafood
Yes Sappe Public Co.,LTD 1973 x x
SappeAloevera snack manufacturer
No Cocon food industries 1993 x CoconKingo Jelly, Cocon Mini Pudding manufacturer in Malaysia
Universal Food Public Co.,LTD UFC coconut, Processor, manufacturer and
Yes 1969 x
(Lam Soon Public Co.,LTD) UFC grass jelly distributor of, among others, beverages
Manufacturer and exporter of 'coconut
No Asiatic Agro Industry Co.,LTD 1993 x Cocomax
products'
Fruit juice and dairy product
Yes Malee Group Public Co.,LTD 1964 x Malee
manufacturer
Note: selected players are the largest by market share for each product category
IMR Report Page 34

2.5.3 Pricing analysis
To provide a comparable assessment of the price for the main brands under each category, the
data in the tables below are based on the retail price for the year 2018.
Seafood snacks
Table 2-9: Pricing analysis for Seafood Snacks in Thailand by key brands, 2018
Company Brand(s) Package Size RetailPrice Remarks
(THB)
Bento – Squid 20 g 20 Crispy Squid
SNNP
Bento - Fish 15 g 10 Fish Stick
Taro Original 15 g 10 Fish Stick
P.M.Food
Taro Crispy 30 g 30 Crispy Squid
Fisho 30 g 20 Fish Stick
Thai Union Group
Fisho 30 g 20 Fish Sheet
Squidy 20 g 45 Crispy Squid
T.Thai Snack Foods
Squidy 17 g 35 Squid Sheet
Sun Yang Food Tao Tong 30 g 55 Shredded Squid
The analysis below is specifically for key brands in the extruded and stick crackers market.
Table 2-10: Pricing analysis for Extruded and Stick Crackers in Thailand by key brands,
2018
Company Brand(s) Package Size Retail Price Remarks
(THB)
Lotus 115 g 20 Stick biscuit
SNNP
Lotus 115 g 20 Biscuit
CalbeeThanawat Jaxx 55 g 20 Potato snack
Paprika 65 g 10 Potato snack
Useful Food Potae 65 g 10 Potato snack
Cornae 56 g 20 Corn snack
URC Thailand Roller Coaster 57 g 10 Potato snack
BerliJucker Party 67 g 10 Potato snack
Suntory Pepsico Tawan 66 g 20 Potato snack
Hanami Foods Snack Jack 70 g 20 Pea snack
Thai Glico Pocky 39 g 20 Biscuit stick
IMR Report Page 35

RTD Jelly
Table 2-11: Pricing analysis for RTD Jelly in Thailand by key brands, 2018
(THB)
JeleLight Cup 125 g 6 Jelly pudding
SNNP Coolly Kool 240 ml 13 Jelly pudding
JeleBeautie 150 ml 15 Jelly pudding
Pipo Shake Jelly 230 ml 13 Jelly drink
European Food
Pipo(x25 pcs) 23.5 g 29 Jelly pudding
CoconKingo Jelly 420 g 46 Jelly pudding
Cocon Food Industry
Cocon Mini(x20 pcs) 15 g 37 Jelly pudding
Kato 230 ml 13 Jelly drink
BerliJucker
Kato Jelly Shake 320 ml 12 Jelly drink
Sappe SappeBeautie 150 g 18 Jelly pudding

Table 2-12: Pricing analysis for Asian Specialty Drinks in Thailand by key brands, 2018
(THB)
Magic Farm (25%+Coco) 240 ml 12 Grass Jelly
SNNP Magic Farm (Grass Jelly) 240 ml 12 Grass Jelly
Magic Farm (Coconut) 240 ml 12 Coconut
UFC (Grass Jelly) 240 ml 14 Grass Jelly
Universal Food UFC (100%) 500 ml 36
Coconut
UFC (60% with pulp) 240 ml 14
Malee Group Malee (100%) 330 ml 25 Coconut
Asiatic Agro Industry Cocomax (100%) 320 ml 25 Coconut
IMR Report Page 36

2.5.4 Market share
Seafood snacks
Chart 2-17: Market share of Seafood snacks Chart 2-18: Market share of Seafood snacks
in Thailand by domestic retail sales in Thailand by domestic retail sales value,
volume, 2018 2018
Others, Others,
17.1% 19.3%
Bento,
25.9% Bento,
31.2% Taro
Taro
Original,
Original,
49.5%
57.1%
Total: 6.2 Kg million Total: THB4,625million

Chart 2-19: Market Size evolution of the Seafood snacks market in Thailand by value,
Q12016 – Q22019
4,625
5,000
4,252
4,217
4,500
4,000
Value (in THB million)
3,500
3,000
2,500
2,000
1,228
1,219
1,169
1,168
1,149
1,089
1,086
1,076
1,068
1,060
1,059
1,054
1,033
1,500
1,005
1,000
500
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
Value (in THB million)
IMR Report Page 37

Chart 2-20: Market Share evolution of key Seafood snacks brands in Thailand by value,
Q12016 – Q22019
100.0%
18.9%
19.0%
19.0%
19.3%
19.3%
19.3%
19.4%
19.8%
19.9%
20.0%
20.1%
20.9%
21.0%
21.3%
21.6%
21.9%
23.6%
90.0%
80.0%
Market Share(%)
70.0%
29.1%
30.2%
30.9%
30.8%
31.2%
30.6%
32.5%
33.8%
32.1%
34.3%
33.9%
35.6%
33.4%
35.6%
37.6%
33.1%
38.6%
60.0%
50.0%
40.0%
30.0%
51.6%
50.8%
50.2%
49.7%
49.5%
49.5%
48.5%
47.1%
46.9%
46.0%
45.9%
44.9%
44.3%
43.4%
42.5%
41.4%
40.1%
20.0%
10.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
Taro Original Bento Others
Note: Numbers may not add up due to rounding

IMR Report Page 38

Cuttlefish snacks
Chart 2-21: Market share of Cuttlefish Chart 2-22: Market share of Cuttlefish
snacks in Thailand by domestic retail sales snacks in Thailand by domestic retail sales
volume, 2018 value, 2018
Tao Tao
Bento, Tong, Tong,
82.2% 5.8% Bento, 10.9%
75.2%
Squidy,
Squidy,
4.6%
2.1%
Others,
Others, 9.4%
10.0%
Total: 1.7Kg million Total: THB1,709million

Chart 2-23: Market Share evolution of keyCuttlefish snacks brands in Thailand by value,
Q12016 – Q22019
100.0%
7.9%
8.1%
8.3%
8.5%
10.1%
8.7%
10.4%
10.5%
9.1%
9.4%
9.4%
9.5%
9.6%
11.1%
9.8%
12.5%
13.8%
90.0% 5.7% 5.2% 4.8% 4.7% 4.7%
5.7% 5.1% 4.8% 4.7% 4.9% 4.1% 4.4% 5.3% 4.9% 4.6%
4.9%
10.9%
8.5%
10.4%
10.9%
9.7%
10.5%
4.0%
10.9%
10.0%
10.9%
10.3%
9.3%
11.3%
9.8%
11.2%
9.5%
8.2%
10.3%
80.0%
Market Share(%)
70.0%
60.0%
50.0%
77.9%
77.0%
76.0%
76.0%
75.8%
75.7%
75.6%
75.5%
75.4%
75.2%
75.2%
74.6%
74.4%
74.3%
40.0%
73.9%
73.6%
71.9%
30.0%
20.0%
10.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
Bento Tao Tong Squidy Others

IMR Report Page 39

Within the industry of biscuits, wafers and extruded and stick crackers, SNNP is estimated of
having a market share of 4.0%, 3.8%, and 3.3% in 2016, 2017, 2018 respectively.
Extruded and stick crackers
Chart 2-24: Market share of Extruded and Chart 2-25: Market share of Extruded and
Stick Crackers in Thailand by domestic Stick Crackers in Thailand by domestic
retail sales volume, 2018 retail sales value, 2018
Cornae, Cornae,
Glico
7.3% 8.8% Glico
Pocky,
Pocky,
6.6%
8.1%
Jaxx, Jaxx,
Others, 5.0% Others,
65.8% 64.6% 5.6%
Snack
Jack, Snack
4.8% Jack,
Paprika, 4.4%
4.0% Paprika,
Lotus, Lotus, 4.2%
6.6% 4.3%
Chart 2-26: Market Share evolution of keyExtruded and Stick Crackersbrandsin Thailand by
value, Q12016 – Q22019
45.0%
65.4%
40.0%
5.0% 3.6% 66.6%
66.9%
67.2%
67.2%
67.5%
68.0%
68.1%
4.4% 4.6% 3.9% 68.0%
68.9%
68.9%
69.1%
69.4%
69.4%
69.6%
69.6%
69.7%
4.9% 4.0%
35.0%
4.3% 4.1%
4.5% 4.6% 4.2%
4.6% 4.0%
Market Share(%)
4.8% 4.2% 4.1%
4.6% 4.1% 4.1%
4.5% 4.4% 4.1%

4.4% 4.3% 4.3%
4.4% 4.2% 4.3%

4.0% 4.4% 4.4%
4.4% 4.2% 4.4%
4.3% 4.3% 4.3%
4.5% 4.2% 4.4%
3.9% 4.1% 4.3%

4.6% 4.3% 4.4%
30.0%
4.6%
4.4%
5.0%
4.7%
25.0%
5.3%
5.5%
5.1%
5.5%
5.2%
5.4%
5.4%
5.5%
5.6%
20.0%
5.6%
5.7%
5.5%
5.7%
5.5%
5.7%
5.6%
5.6%
9.1%
15.0%
8.4%
8.5%
10.1%
8.7%
7.9%
9.7%
9.3%
8.4%
7.7%
8.0%
8.1%
8.0%
7.4%
7.7%
7.3%
7.0%
10.0%
10.8%
10.1%
9.7%
9.5%
9.5%
9.1%
9.1%
8.9%
8.9%
8.8%
8.8%
8.8%
8.8%
8.8%
8.7%
8.6%
8.5%
5.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
Cornae Glico Pocky Jaxx Snack Jack Paprika Lotus Others

IMR Report Page 40

RTD Jelly
Chart 2-27: Market share of RTD Jelly in Chart 2-28: Market share of RTD Jelly in
Thailand by domestic retail sales volume, Thailand by domestic retail sales value,
2018 2018
Others, Others,
16.1% 18.0%
Pipo,
SNNP, 28.7%
Pipo,
33.5% 50.5%
SNNP,
53.3%

Note: SNNP’s brands include Jele, Coolly Kool, Hero boy, Magic farm, Daiyamoto. Including SNNP’s new
launching product in 2018, JeleBeautie Low Sugar, representing 2.1% of the total RTD Jelly market in
Thailand based on retail sales value.
Chart 2-29: Market Share evolution of keyRTD Jellybrandsin Thailand by value, Q12016 –
Q22019
100.0%
8.5%
9.0%
9.0%
10.6%
10.7%
10.7%
9.4%
9.5%
11.5%
12.1%
12.2%
18.0%
18.2%
19.2%
21.4%
22.5%
24.1%
90.0%
23.2%
24.9%
24.9%
24.6%
24.8%
23.3%
80.0%
26.3%
26.6%
24.2%
Market Share(%)
32.4%
33.2%
25.5%
28.7%
26.6%
70.0%
22.6%
22.6%
30.2%
60.0%
50.0%
40.0%
67.8%
66.6%
66.2%
66.1%
66.0%
65.7%
63.5%
63.0%
62.7%
56.3%
56.1%
54.9%
54.7%
54.2%
30.0%
53.3%
53.3%
48.4%
20.0%
10.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
SNNP Pipo Others
Note: Numbers may not add up due to rounding. SNNP’s brands include Jele, Coolly Kool, Hero boy, Magic
farm, Daiyamoto
IMR Report Page 41

Chart 2-30: Market Share evolution of keyRTD Jellybrands (Cup) in Thailand by value,
Q12016 – Q22019
100.0%
10.6%
11.0%
11.5%
11.7%
12.0%
12.2%
12.4%
12.7%
12.9%
13.1%
13.3%
13.3%
14.4%
14.8%
15.0%
16.3%
18.2%
90.0%
80.0%
Market Share(%)
70.0%
45.5%
46.7%
47.8%
46.1%
45.0%
45.9%
45.0%
46.4%
42.9%
47.2%
44.5%
50.2%
51.8%
49.7%
49.5%
50.5%
48.0%
60.0%
50.0%
40.0%
30.0%
43.0%
42.4%
42.3%
42.1%
41.9%
41.9%
41.7%
41.6%
40.7%
40.5%
39.6%
37.4%
37.4%
36.6%
36.1%
20.0%
33.8%
33.1%
10.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
SNNP Pipo Others
Note: Numbers may not add up due to rounding. SNNP’s brands include Jele, Coolly Kool, Hero boy, Magic
farm (cup), Daiyamoto (cup).
IMR Report Page 42

Chart 2-31: Market Share evolution of keyRTD Jelly brands (Pouch) in Thailand by value,
Q12016 – Q22019
100.0%
14.6%
14.8%
17.5%
15.6%
17.1%
21.6%
90.0%
80.0%
Market Share(%)
70.0%
60.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
50.0%
85.4%
85.2%
82.5%
82.1%
81.0%
78.4%
40.0%
30.0%
20.0%
10.0%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
SNNP Sappe Others
Note: Numbers may not add up due to rounding. SNNP’s brands include Jele. The calculation of the market
share excludes other types of jelly which are not categorised as cup, bottle or pouch.
IMR Report Page 43

Chart 2-32: Market Share evolution of keyRTD Jellybrands (Bottle) in Thailand by value,
Q12016 – Q22019
100.0%
8.3%
8.3%
9.0%
9.6%
18.5%
19.7%
22.1%
22.9%
24.9%
25.7%
90.0%
26.2%
80.0%
Market Share(%)
70.0%
60.0%
56.0%
52.9%
53.7%
59.4%
50.0%
90.3%
89.3%
91.7%
64.5%
90.4%
77.3%
65.9%
40.0%
30.0%
20.0%
25.5%
22.2%
20.6%
17.6%
10.0%
13.4%
3.0%
1.7%
0.0%
1.4%
7.9%
0.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018
2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019
SNNP Pipo Others
Note: Numbers may not add up due to rounding. SNNP’s brands include Coolly Kool. Sales of bottle RTD jelly
recorded starting Q2 2017
IMR Report Page 44

Chart 2-33: Market Share evolution of SNNP’sRTD Jellybrands in Thailand by value, by type
(cup, pouch, bottle), 2016 – 2018
CUP POUCH BOTTLE

100.0%
14.6%
90.0%
Market Share(%)
80.0%
58.1%
58.3%
70.0% 62.6%
60.0%
86.6%
100.0%
100.0%
98.6%
50.0%
85.4%
40.0%
30.0%
41.9%
41.7%
37.4%
20.0%
10.0%
13.4%
1.4%
0.0%
2016 2017 2018 2016 2017 2018 2016 2017 2018
SNNP Others
Note: Numbers may not add up due to rounding. The calculation of the market share excludes other types of
jelly which are not categorised as cup, bottle or pouch. SNNP’s brands include Jele (cup and pouch), Coolly
Kool (cup and bottle), Hero boy (cup), Magic farm (cup), Daiyamoto (cup).
Chart 2-34: Market share of Asian Specialty Drinks in Thailand by domestic retail sales
value, 2018
SNNP, 13.2%
Others, 86.8%
2.6 REGULATORY TRENDS

Guideline Daily Amounts (GDA) Labelling
The regulation on theconsumptionof snacks and on-the-go food & beverage products has been
difficult due to their wide-spread usage. The excessive consumption of some food & beverage
products may lead to an over-intake of various nutrients, which can cause different health issues.
Some of the key medical concerns have been obesity andcardiovascular diseases, among others.
For this reason, Thailand has enacted measures to regulate thelabelling and advertisement of
IMR Report Page 45

snacks. Since August 2011, theThai Food and Drinks Authority(FDA) mandated the labeling of
GDA on different snack’s front packaging. The GDA labelling displays the nutritional value of the
product and recommended daily consumption regarding energy, sugar, sodium, and fat, along with
external additives. It also prohibits false nutritional advertisement for products.89
Tax and Excise Exemptions
In September 2017 Thailand launched the sugar-tax under a 6-year timeline, with an aim to lower
sugar consumption. This step is due to the statistics on growing obesity in the country, as reported
by theWorld Health Organisation (WHO). The WHO, in 2016, had called upon it members to
impose sugar-tax on drinks (e.g. juices, RTDs) mentioning thata 20% increase in taxes could lower
their consumption by 20%.90A similar tax in Mexico in 2014 saw a demand reduction of sugar-
based beverages by 12%.
The regulation has both incentives and higher taxation, to encourage producers towards
developing low-sugar products (e.g. juices and RTDs). The taxes are lowered for the initial two
years, allowing companies to adapt their products to the government’s regulations. After two years,
products failing to meet the required regulation limit are to be taxed progressively. Thailand juice
products have been charged based on the excise tax and the sugar added beverage tax. Fruit and
vegetable juices with more than 10% of pulp content are liable to remain free of excise duty. Thai
authorities are planning to increase the minimum required pulp content to 20% to be eligible for an
excise tax waiver.The sugar-tax, however, will continue to be levied as per the same rates.91
As an example of other government initiatives, the Department of Health has issued statements
about a proposal on controlling green tea and soft drinks advertisements. In fact,green tea and soft
drinks have been considered to be a major source of added sugar intake in the daily average Thai
diet, resulting in growing obesity among the population.
2.7 INDUSTRY OUTLOOK & PROSPECTS

As the economic outlook for Thailand remains positive, the demand for snacks and RTD drinks is
expected to increase. The industry is forecasted to grow, although at a different rate for each
product, at between 2.8% and 5.6% in the next five years between 2018 and 2023. With the
political situation stabilising, following the military coup in 2014 and the General Election held in
March 2019, the country is expected to recover due to improved domestic activity, returnof foreign
direct investments in the country and improving conditions of the hospitality and tourism industries.
The economic recovery is expected to translate into higher disposable income, particularly for the
younger workforce, and therefore higher consumption of new drinks and snacks by local
consumers, both in rural and urban areas.
The market for snacks and RTD drinks is expected to continue growing supported by product
innovations by the key players in the market and marketing initiatives to remain top of mind for
consumers. These products benefit also by the vast availability throughout the country in both
modern and traditional retail channels, with the growing number of vending machines country-wide
providing an opportunity to reach additional consumers in areas of high traffic.
The demand will continue to be supported by changing lifestyle, in particular by the growing
request for packaged products ready to be consumed and shrinking household size which is
supporting the demand for smaller packages. In addition, consumers increasingly favor healthy
products, and among others are looking for snacks or bars with high protein content. The
consumption of fish products is also growing; in line with the growth of income, consumers are
increasing their consumption of high-protein food.
89
Thailand- Food and Agricultural Import Regulations Standards, November 2018, GAIN Report
90
https://www.who.int/malaysia/news/commentaries/detail/tax-on-sugary-drinks-will-make-children-and-the-budget-healthier
91
https://www.foodnavigator-asia.com/Article/2019/01/29/Juice-boost-Thailand-considers-tax-exemptions-for-drinks-with-
higher-fruit-and-veg-content
IMR Report Page 46

3 OVERVIEW OF THE SNACKS AND RTD DRINKS INDUSTRY IN CLMV
3.1 INDUSTRY SEGMENTATION

The segmentation and structure of the snacks and RTD drinks industry in CLMV is similar to that
of Thailand. This is largely influenced by the geographical proximity to Thailand as well as the
similarity in cultural characteristics and food preferences. Key Thai snacks and RTD drinks players
have expanded into neighbouring emerging markets, predominantly in the CLMV region on the
back of a successful development in the snacks and RTD drinks market in Thailand. These players
are also able to tap into their experience in Thailand to navigate similarlydeveloped infrastructure,
restricted access to capital and low levels of urbanisation in the CLMV region.
3.2 INDUSTRY DYNAMICS

Demand Drivers
Favourabledemographic and growing disposable income and consumption
Most of the countries in CLMV have a large young population, who is part of the workforce.
Myanmar has 55% of its population below 30 years old92, while half of the population in Cambodia
is belowthe age of 25,and Vietnam and Laos have sizeable young populations too93. The average
population above 65 years of across CLMV countries is lower than more advanced SEA nations
such as Singapore and Thailand.
Chart 3-1: Percentage of population aged 65 and above in selected SEA countries, 2017
14%
Population aged 65 and
12%
10%
above (%)
8%
6%
4%
2%
4.1% 4.4% 5.7% 6.3% 7.2% 11.4% 12.9%
0%
Lao Cambodia Myanmar Malaysia Vietnam Thailand Singapore
Source: World Bank; Frost & Sullivan Analysis

Simultaneously, since emerging from a long period of economic isolation, CLMV economies have
posted a real GDP growth of between 5.2% and 8.4% from 2013 to 2017. 94 This has translated
into a rising household disposable income and an expanding middle-class population.The young
population, rising household disposable income and expanding middle-class are expected to
propel the rapid transition towards a consumer-based society and drive the consumption of
packaged food & beverage products, including RTD drinks and snacks products. The growth of
urban centresis forecasted to increase the consumers’ preference, particularly among the younger
generations, for branded and healthy products.In addition, the modern retail segment is expected
to grow.95&96
92
A closer look at Myanmar’s demographics, The Economist Intelligence Unit, last updated June 03 rd, 2015, retrieved from
http://country.eiu.com/article.aspx?articleid=1983218582&Country=Myanmar&topic=Economy
93
World Population Prospects 2017, United Nations, retrieved from https://population.un.org/wpp/DataQuery/
94
IMF
95
https://www.kantarworldpanel.com/vn/news/Vietnams-retail-market-Future-growth
96
Union of Burma, Retail Foods, 2018 USDA GAIN Report
IMR Report Page 47

Rapid urbanisationleads tochanging lifestyle
The rapid urbanisation across CLMV countries has resulted in themigration from rural areas to
urban areas. The size of the households has also declined, with both parents in a family joining the
workforce.
Chart 3-2: Urban Population trends in CLMV, 2013-2023F
45
40
Urban Population
35
30
(in million)
25
20
15
10
5
0
CAGR CAGR
2013 2014 2015 2016 2017 2018 2019F 2020F 2021F 2022F 2023F (2013- (2018-
2018) 2023F)
Cambodia 3.2 3.3 3.4 3.6 3.7 3.8 3.9 4.1 4.2 4.3 4.4 3.4% 3.2%
Laos 2.1 2.1 2.2 2.3 2.4 2.4 2.5 2.6 2.7 2.8 2.8 3.3% 3.2%
Myanmar 15.2 15.4 15.6 15.9 16.2 16.5 16.8 17.1 17.4 17.7 18.0 1.7% 1.8%
Vietnam 29.7 30.6 31.6 32.6 33.6 34.7 35.7 36.7 37.8 38.8 39.9 3.2% 2.9%
Source: UN Department of Economic and Social Affairs, Population Division (2018). World Urbanization
Prospects: The 2018 Revision Database; Frost & Sullivan
Similarly to Thailand, with abusy schedule and higher disposable income, there has been a
considerable rise in the demand for convenience-based shopping.Consumers now prefer to shop
from stores which are located near to their workplaces, offer auxiliary services and provide hang-
out places.
Changing lifestyles have also lead to the change in eating habits, where consumers are
demanding a variety of beverages. Social media influence and aspirational factor continue to drive
consumers experimenting new flavours and food products.Facilitated by no religious restrictions,
also the intake of alcoholic drinks became more popular. As some of the food like snacks goes
well with alcoholic drinks, the snacks industry stands to benefit from this drinking culture.
On the other hand, many people do not meet the recommended dietary intake, among other
reasons due to their hectic lifestyle or low income. Packaged food or beverages that are fortified or
enriched, such as juice with added vitamin are helpful in meeting the recommended diets. As an
example, a fish-based wafer snack was introduced in Cambodia to treat severe acute
malnutrition97, drivingthe demand for additionalpackaged food & beverage products.
Food quality and safety issues drivethe demand for packaged/ready-to-eatfood
Communities in CLMV countries, especially those located in rural areas, face food quality and
safety issues. The accessibility to food that is safe and hygienic remains among the
mainchallenges in these countries. According to the Economic Intelligence Unit’s Global Food
Security Index 2018, Vietnam scored 62th among 113 countries, the highest among the CLMV
countries.
Table 3-1: Global Food Security Index Ranking for CLMV Countries
Country Global Competitiveness (2017-2018)
Cambodia 85th
Laos 95th
Myanmar 82th
Vietnam 62th
Source: EIU:Global Food Security Index 2018
97
Niem Chheng, UN fights malnutrition with snack, last updated December 18, 2018, retrieved from
https://www.phnompenhpost.com/national/un-fights-malnutrition-snack
IMR Report Page 48

The CLMV countries continue to promote the knowledge and awareness of food safety among the
wider public.Regulations are also put in place in these countries. As an example,Vietnam has put
in place regulations related to food safety at markets and supermarkets, as well as stricter control
on the sales of counterfeit, substandard or smuggled food.98Laos introduced its Food Safety Policy
in 2009, Myanmar amended its Food Law in 2013 while Cambodia was drafting the Food Safety
law in 2018.99&100&101
The packaged/ready-to-eat food & beverage products usually provide traceability and labelling,
indicating it is safe to consume, thus driving the demand for this type of food & beverage
products.Usually, the perceived quality of the food & beverage products is associated with the
products’ country-of-origin (e.g. from countries that adopt high-quality standards in food
manufacturing).Consumers in the CLMV region are likely to be more health conscious in line with
the growth of education level and income.
Growing tourism industry
Among the four countries in the CLMV region, Vietnam recorded the highest number of tourist
arrivals, followed by Cambodia, Laos,and Myanmar. Myanmar registered the fastest growth in
tourists’ arrivals, at a CAGR of 28.7%from 2012 to 2016.
Chart 3-3: Tourist Arrivals in CLMV, 2012-2016
25,000
Cambodia Laos Myanmar Vietnam
Tourists arrivals (in '000)
20,000
7,944
10,013
15,000 7,874
7,572
6,848 4,681
10,000 3,081 2,907
2,044
1,059 4,684 4,239
3,779 4,195
5,000 3,330
3,584 4,210 4,503 4,775 5,012

0
2012 2013 2014 2015 2016
Source: ASEAN Secretariat

The growing number of tourist arrivals indicates that the pool of potential consumers for packaged
food is much larger than only domestic consumers. Tourists are likely to try food or beverages with
local taste, or with a tastesimilar to products in their origin countries. They may also seek to
purchase packaged food as souvenirs when they travel in CLMV countries. Besides, packaged
food or bottle drinks may be the top choices if the tourist is concern about the traceability and the
quality of the food or beverages.
Demand Restraints
Economic Uncertainty
The economic growth across CLMV countries have been driven by the recent end of their isolation
from the world economy. Nevertheless, in recent years the growth rate of these countries has
discounted some negative events. As an example, Myanmar is facing challenges in the Rakhine
State which had a negative impact on the economicgrowth. Among other events, a weaker
currency in CLMV countries can cause imports cost to rise, making most of branded goods
expensive and slowing down sales.
98
Nhan Dan, Campaign launched to raise awareness on food safety, last updated December 09, 2017, retrieved from
http://en.nhandan.org.vn/society/item/5703402-campaign-launched-to-raise-awareness-on-food-safety.html
99
Ministry of Health Laos, National Food Safety Policy 2009
100
FDA, Myanmar, last updated January 31, 2018, retrieved from http://www.fdamyanmar.gov.mm/?p=154
101
USDA, Cambodia: Update on the draft Food Safety Law, April 1, 2018, retrieved from
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Update%20on%20the%20draft%20Food%20Safety%20Law_H
o%20Chi%20Minh%20City_Cambodia_1-4-2018.pdf
IMR Report Page 49

Preference of Traditional Retail Stores and Under-DevelopedMarkets
Partly due to the low levels of urbanisation in the CLMV countries, traditional retail is still the most
prominent retail channel. The population living in urban areas only accounts for 35.9% of the total
population in Vietnam, 35.0% in Laos, 30.6 % in Myanmar and 23.4% in Cambodia as of
2018.102In addition, most ofthe consumers across CLMV countries are still attached to traditional
methods of shopping for food & beverage products. Consumers in the CLMV markets are also
reliant on brand loyalty and relationship-basedpurchases.
The local consumption habits favour the local products due to availability, price and familiarity.
Locals may have low awareness and limited knowledge of imported brands and available product
choices. The locals may also prefer to get fresh food instead of packaged food.Therefore, the
imported brands may need to increase the promotional and advertising activities to improve sales
in this region. This may increase the cost of business for foreign players. However, this restraint
will have a lower impact in thelong term due to the increasing number of convenience store and
franchise in the CLMV region. However, at the moment, their number is still limited compared to
more developedneighbouring countries such as Thailand.
Another key aspect of the purchase behaviour is the personalised service and credit offered by
local unorganised retailers, something which is yet to be implemented across any modern retail
segment. The market for premium and branded products is still evolving and has a smaller
consumer base compared with Thailand. This leads to uncertainty and lower revenue for sellers,
demotivating them from aggressive investments.
3.3 INDUSTRY SIZE

Due to the lack of regional data on seafood snacks, crackers, RTD jelly, and Asian specialty
drinks, below we provide as a reference for these categories the market size on snacks (e.g. chips,
popcorn, salty snacks, biscuit, wafer, cracker, confectioneries), jelly products (e.g. Pastilles, Gums,
Jellies and Chews), and non-alcoholic drinks (e.g. Water, Juices, RTD coffee and tea, energy
drinks).
3.3.1 Snacks
Table 3-2: Domestic Retail Sales of Snacks in CLMV countries by Value (in USD million),
2013 – 2018 and 2018-2023F
Year Cambodia Laos Myanmar Vietnam Total
2013 120.3 62.0 346.3 1,099.8 1,628.3
2014 133.5 66.8 370.5 1,201.8 1,772.7
2015 143.8 72.4 382.4 1,283.0 1,881.6
2016 156.4 78.6 396.4 1,394.7 2,026.1
2017 168.8 86.5 421.2 1,525.0 2,201.5
2018 183.9 93.5 458.7 1,662.5 2,398.7
2019F 204.3 104.4 482.4 1,822.8 2,614.0
2020F 224.7 116.4 520.4 1,975.0 2,836.5
2021F 248.5 128.5 554.0 2,150.5 3,081.6
2022F 273.0 140.8 585.8 2,335.6 3,335.2
2023F 303.8 155.7 625.8 2,563.6 3,648.9
CAGR (2013 – 2018) 8.9% 8.6% 5.8% 8.6% 8.1%
CAGR (2018 – 2023F) 10.6% 10.7% 6.4% 9.0% 8.8%
Table 3-3: Domestic Retail Sales per capita of Snacks in selected countries, in USD, 2018
Cambodia Laos Myanmar Vietnam Thailand Korea Japan
USD per capita 11.3 13.8 8.7 17.6 44.3 57.3 132.2
102
CIA
IMR Report Page 50

In addition, as provided for Thailand in the previous chapter, below we provide the historical
market size of packaged food products in CLMV countries.
Table 3-4: Packaged food in CLMV countries by Value (in USD million), 2013–2018and 2018-
2023F
2013 453.2 156.1 1,480.1 7,894.4 9,983.8
2014 501.9 176.7 1,514.8 8,754.2 10,947.6
2015 552.0 199.0 1,508.0 9,228.5 11,487.4
2016 599.2 215.0 1,632.5 9,789.3 12,236.1
2017 646.1 231.3 1,673.2 10,412.5 12,963.0
2018 708.2 252.3 1,823.9 10,815.4 13,599.8
2019F 754.3 275.3 1,996.6 11,475.1 14,501.2
2020F 806.5 299.8 2,141.6 12,282.5 15,530.3
2021F 860.0 324.8 2,289.9 13,185.6 16,660.3
2022F 914.5 350.5 2,431.0 14,199.0 17,895.1
2023F 968.6 378.0 2,588.0 15,339.1 19,273.8
CAGR (2013 – 2018) 9.3% 10.1% 4.3% 6.5% 6.4%
CAGR (2018 – 2023F) 6.5% 8.4% 7.2% 7.2% 7.2%
Table 3-5: Domestic Retail Sales per capita of Packaged food in selected countries, in USD,
2018
USD per capita 43.6 37.2 34.5 114.4 194.4 530.2 1,440.0
3.3.2 RTD drinks

Table 3-6: Domestic Retail Sales of Jelly productsin CLMV countries by Value (in USD
million), 2013 – 2018and 2018-2023F
2013 18.7 7.3 14.3 74.8 115.1
2014 19.7 7.9 15.2 82.7 125.4
2015 21.5 8.6 16.7 90.5 137.2
2016 22.8 9.5 18.2 99.7 150.2
2017 24.5 10.3 20.5 108.4 163.8
2018 26.5 11.2 22.6 118.7 179.0
2019F 28.9 12.3 25.4 132.8 199.4
2020F 31.7 13.7 28.8 148.0 222.2
2021F 34.1 15.5 32.4 161.5 243.5
2022F 36.1 17.4 35.9 175.8 265.2
2023F 39.1 19.1 39.2 191.1 288.5
CAGR (2013 – 2018) 7.2% 8.9% 9.6% 9.7% 9.2%
CAGR (2018 – 2023F) 8.1% 11.3% 11.6% 10.0% 10.0%
Table 3-7: Domestic Retail Sales per capita of Jelly products in selected countries, in USD,
2018
USD per capita 1.6 1.7 0.4 1.3 1.2 6.9 8.0
IMR Report Page 51

Table 3-8: Domestic Retail Sales of Non-Alcoholic Drinks in CLMV countries by Value (in
USD million), 2013 – 2018and 2018-2023F
2013 248.0 180.1 208.7 1,822.4 2,459.3
2014 269.2 198.2 229.8 1,954.8 2,652.1
2015 294.3 216.9 245.0 2,139.2 2,895.4
2016 319.9 237.4 263.2 2,310.8 3,131.3
2017 343.1 254.5 280.3 2,507.8 3,385.8
2018 370.2 278.2 300.7 2,742.0 3,691.1
2019F 399.4 303.9 335.8 2,961.4 4,000.5
2020F 426.1 331.3 365.3 3,151.7 4,274.4
2021F 452.2 362.3 396.2 3,390.7 4,601.5
2022F 488.2 394.4 429.8 3,651.3 4,963.6
2023F 529.5 427.5 467.5 3,936.0 5,360.4
CAGR (2013 – 2018) 8.3% 9.1% 7.6% 8.5% 8.5%
CAGR (2018 – 2023F) 7.4% 9.0% 9.2% 7.5% 7.7%
Table 3-9: Domestic Retail Sales per capita of Non-Alcoholic Drinks in selected countries, in
USD, 2018
USD per capita 22.8 41.0 5.7 29.0 88.6 108.2 422.5
3.4 SUPPLY CONDITIONS
3.4.1 Manufacturing trends

Availability of raw materials
The CLMV region producesa wide variety of agricultural products that are able to support the
growth of the snacks and RTD drinks industries in this region. Below are some of the main
agricultural products produced in the CLMV region. Ingredients such as rice, nuts, beans and
sesameare some of the main ingredients for snacks, while sugarcane, coffee and tea are among
themain ingredients for RTD drinks.
Table 3-10: Selectedagriculturalproducts in the CLMV region
Vietnam Laos Cambodia Myanmar
Rice, peanut, cashew Rice, sweet potato, Rice, cashew nut, Rice, pulses, beans,
nut, soybeans, cassava (manioc, cassava (manioc, sesame, groundnuts,
sugarcane, pepper, tapioca), corn, tapioca), corn sugarcane
coffee, tea, banana peanuts, sugarcane,
coffee, tea
However, some of the products are inadequate to meet domestic consumption and export demand.
Therefore,food processors still rely on imported ingredients, especially during off-season period.
The raw materials are also generally affected by extreme weather conditions, such as heavy
seasonal rain that causes flooding or mudslide.
Need for supporting industries
The snacks and RTD drinks industries need local supporting industries, such as those for the
production of packaging materials. The growth in the local production of inexpensive and high-
quality packages would be able to increase the competitiveness and profitability of the snacks and
RTD drinks industry. However, not all countries have proper supporting industries. For instance,
Cambodiaimports the vast majority of its packaging materials, which pushes the cost of packaged
food products.
IMR Report Page 52

Developing logistics and infrastructural networks
Most parts of CLMV countries remain with under-developed civil infrastructuressuch as roads and
railways, creating a logistical challenge for companies trying to reach remote areas. This is also
amplified by thelack of support infrastructuressuch as power and cold-storages, leading to limited
distribution reach, as some food & beverage products risk spoilage if not transported in a
temperature-controlled environment. These factors are agreat hindrance in expanding theretail
market and often cause a higher than acceptable cost to reach areas outside urban or semi-urban
markets.
Human resource and automation
The CLMV region hasa young workforce which can be translated into a big pool of labourto
support the manufacturing facilitiesespecially for food & beverage products. The young labour
force generally contributes to the expansion of this industry. However, even if at a slow pace,
some companies in the CLMV region started to look at automation of their manufacturing
processes. Automation is perceived to raise productivity, reduce the production time, reduce
wastage and minimiselabour costs, among other benefits. In view of this, 70% of workers in
Vietnam and 57% in Cambodia are at high risk of automation.103CLMV countries face the shortage
of skilled workers with advanced qualifications and experienced personnel. These countries also
need human resource training to allow them to master modern production techniques. Besides,
Laos faceslabour issues in themanufacturing industry due to local workers leave for ahigher salary
in neighbouring countries.104
Supportive Regulation
Supportive regulation can be in the form of ease of doing business, such as fast and transparent
import and export processes. As an example, Vietnam updated its food safety law in February
2018, with theintention to reduce regulatory burdens and enhance international trade of
goods. 105 Now, 90% of food shipments can enter Vietnam without examination, while all food
shipments were examined previously. To import a new food product in Vietnam, the full process is
estimated at three weeks, including receiving the approval from the Ministry of Health.
3.4.2 Distribution channels

The modern retail channel isgrowing inCLMV countries, but its share is estimated to be low as of
2017, at less than 15% of the total retail market. The food & beverage market is still dominated by
traditional retailchannels which account for more than 85% of total sales. With the improvement in
economic growth and regulatory support, modern retail has been growing across all the CLMV
economies.
Purchase habits in the CLMV markets are more ideal for traditional retail channels. People prefer
to purchase in small quantities and have a high frequency of market visits, which makes traditional
retail the preferred mode of distribution. Another factor is personalrelationship, when customer
becomes familiarised with a store they prefer to continue shopping from there. CLMV countries
have a strong distributor-based model in retail, with distributors being generally local companies
with a strong understanding of the localmarket.
Larger retailers in some of the markets (e.g. Vietnam) are increasingly opting for direct import and
sourcing to cut costs, provide exclusive products and assure value-chain quality. Local players
continue to dominate the modern stores, especially across convenience stores and mini-marts.
These stores are capable of replicating the neighbourhood store convenience, with additional
facilities such as mobile charging, ATMs, smaller sale units, among others.
With improving economic condition and acceptance of modern retail stores, foreign companies are
increasingly investing in CLMV markets, improving support infrastructure and logistics network. It
is common to observe international companies entering the CLMV region via partnerships with
103
ILO, ASEAN in transformation: Future of jobs at risk of automation, July 2016
104
Radio Free Asia, Laos’ garment industry faces severe labour shortage, January 10, 2019
105
Vietnam Food Safety Regulations, last updated October 2018, retrieved from https://www.vietnam-
briefing.com/news/vietnam-food-safety-regulations.html/
IMR Report Page 53

local producers or distributors to strengthen their distribution network, especially into potentially
untapped areas.
Nestle, Unilever and Perfetti Van Melle had announced further investment in food manufacturing
plants in Myanmar in 2017. There has also been an improvement in crucial supply chain
components, such as cold-storage, aiding to the expansion of retail outreach to further areas.
However, physical connectivity such as roads, rail and airports remain poor. The lack of a reliable
power-supply and refrigeration systems continue to result in more spoilage for larger store formats.
Pricing continues to be a keyfactor; consumers are deemed to be highly price-sensitive.106
Cambodia
Cambodia’s traditional retail trade continues to dominate the food & beverage market with more
than 90% sales value. Modern retail is limited to few areas in the country,asa large portion of
thepopulation continues to live in rural areas. In addition, Cambodian consumers prefer traditional
informal retailers and wet markets. Due to theabsence of refrigerators across for some
households, grocery and food shopping is more of an everyday activity. Limited development in
logistics also means that wet markets are a better source of fresh food. Local retailers are a
preferred choice for students and workers for snacks and beverages.107
With the rapid urbanisation coupled with changes in lifestyle and boost in disposable income, the
Cambodian retail landscape has been undergoing a rapid transformation. The demand for branded
and more premium products grew from the middle and high-income groups, though it is a limited
market as of now. Modern retail outlets continue to expand at a rapid pace with active participation
from regional and global chains, such as Lucky Market, Angkor Market, Circle K, Aeon Mall,
Parkson, among others. The number of supermarkets in the country is estimated to have
expanded from 172 in 2012 to 454 in 2017, growing at a CAGR of 21.4%.
Cambodia lacks of a developed food & beverage processing industry,with most of processed
food& beverage products imported and distributed through agents. The Cambodian laws permit
distributors to request alicense for the exclusive import of brand-names, giving them more
incentive to invest. Somelarge retailers also have direct import arrangements with manufacturers
for products not available through distributor channels. Multi-national companies often choose
between setting-up own subsidiaries (e.g. Coca-Cola and Unilever) and partner with local
distributors (e.g. P&G, and Colgate-Palmolive). The food & beverage market is expected to grow
at a CAGR of 9.7% duringthe 2016-2021 period. The fastest growing sub-segment is expected to
be that of packaged food, which grew by 55.5% during the period 2012-2016 and, it is expected to
register a CAGR of 33.5% during the period 2016-2021.108
Vietnam
Vietnam’s food & beverage industry experienced a sustained growth during the period 2012-2017,
withmodern retail grocery sales registering a CAGR of 16.1% compared to traditional retail growth
of 11.37%. Modern retail chains have continued to expand with investments from domestic and
foreign players across tier-1 and tier-2 cities. During the same period, modern grocery stores grew
by 260% compared to only 5% of traditional retail channels. However, the market is still dominated
by traditional retailers who represent more than 80% of the retail sales as of 2018 and 95% of
grocery sales as of 2017.109110
Among the key challenges in the growth of modern retail are property prices, consumer purchase
habits and consumer perception. Vietnamese are heavy users of motorbikes as their key mean
transport;this limits their capacity to carry groceries. They prefer to purchase in smaller quantities
and more frequently, which still make traditional wet markets more attractive as they offer custom
size purchase and better daily fresh supplies. 111&112
106
Capture the growth of the SEA Frontier markets, Feb 2018, Business Sweden
107
http://www.ukabc.org.uk/wp-content/uploads/2017/04/FMCG-in-Cambodia-Executive-Summary.pdf
108
https://www.foodexport.org/get-started/country-market-profiles/southeast-asia/cambodia-country-profile
109
Vietnam Retail Foods Sector report, 2018 USDA GAIN Report
110
Vietnam’s Retail Market: Future Growth, Kantar World Panel, last updated August 03, 2018 ,retrieved from
111
112
Vietnam Retail Foods Sector report, 2018 USDA GAIN Report
IMR Report Page 54

With changes in consumer demand and the growth of modern retailing, the supporting
infrastructures have also evolved. Compared to the earlier practice of importing or sourcing food &
beverage products from agents, some of the larger retailers have entered into direct supply
contacts, ensuring lower costs and quality checks. Cold-storage availability, a key constraint in the
past, has improved significantly over the last 10 years.113 Additionally, the expansion of foreign
players such as CP Group andCentral Group from Thailandis changing the local distribution of
products, as these playersintroduced products from theircountry of origin.114&115
Chart 3-4: Number of retail stores in modern retailing, Vietnam, 2012-2017
4,000
stores in Modern
Number or Retail
3,000
trade stores
2,000
3,272
2,600
1,000 1,748
897 1,054 1,211
-
2012 2013 2014 2015 2016 2017
Store Category 2012 2013 2014 2015 2016 2017

Convenience Store 356 463 565 1,008 1,790 2,086
Supermarkets 516 559 605 691 691 1,130
Hypermarkets 25 32 41 49 54 56
Source: USDA Foreign Agricultural Service
3.5 COMPETITIVE LANDSCAPE

The competition for snacks and RTD Drinks in CLMV marketsis intense, with both local and
regional players, fromneighbouring countries such as from China, Japan, Singapore, South Korea,
Malaysia,and Thailand. The local and regional players have a competitive advantage compared
with products from the European or the American continents, particularly in terms of pricing due to
logistical advantages. In order to penetrate the traditional retail chain, exporters usually partner
with importers, wholesalers,and distributors, that plays an important role in introducing the
products to local retailers.
113
https://www.vietnam-briefing.com/news/vietnam-growing-food-beverage-sector.html/
114
Nikkei Asian Review, Thai CP takes wholesale store to neighbouring countries, last updated September 26, 2018,
retrieved from https://asia.nikkei.com/Business/Companies/Thai-CP-takes-wholesale-store-to-neighboring-countries
115
Vietnam Investment Review, Central Group plans $1.5 billion expansion in Thailand and Vietnam, last updated July 3,
2018, retrieved from https://www.vir.com.vn/central-group-plans-15-billion-expansion-in-thailand-and-vietnam-56891.html
IMR Report Page 55

3.5.1 Snacks
Seafood snacks
Table 3-11: Brief Profile of major brands for Seafood Snacks in CLMV, 2018
CLMV
Brand
No. Brand(s) countries of Profile of brand owner
Owner
presence
Cambodia, • Founded in 1987
Laos, • Started as an importer and distributor in Thailand and
1. Bento SNNP
Myanmar, expanded as a manufacturer for snacks and RTD
Vietnam drinks
• Founded in 1977
• Principal activities in Thailand are manufacturing and
Thai Union sale of frozen, chilled and canned seafood
2. Fisho Vietnam
Group Plc • Its subsidiaries in Asia are manufacturers and
distributors of seafood in Vietnam and China
• Public listed in Thailand
• International company located in Vietnam,
Tida Kim manufacturing, exporting, importing and distributing
3. Tida Kim Vietnam
Co., Ltd FMCGs, agriculture, seafood products, among other
activities
Tuyen Ky • Food processing manufacturer and supplier. Among
Tuyen Ky
4. Vietnam Food Co., others, it produces pork and beef jerky and canned
Food
Ltd food
Dinh Viet
Trading • Produces roasted squid, tiny shrimp crisp, shrimp
5. Damex Vietnam ServiceManu crisp, roasted Himego fish with sesame as well as
facturing dried seasoned fish, stingray and anago
Co., Ltd
United • Established in 1975 and based in Bangkok
6. GAP Vietnam Foods Public • Produces seaweed snack, biscuits, jelly and candy
Co., Ltd • The company also provides OEM services
Taokaenoi • Founded in 2004
Cambodia,
Food & • Principally engaged in the manufacturing and
Laos,
7. Taokaenoi Marketing distribution of fried, grilled and baked seaweed and
Myanmar,
Public Co seaweed snacks
Vietnam
Ltd • Public listed company in Thailand
Source: Respective companies’ websites and Frost & Sullivan Analysis
IMR Report Page 56

Table 3-12: Brief profile of major brands for biscuits, wafers and extruded and stick
crackers in CLMV, 2018
CLMV
Brand
Owner
presence
1. Lotus SNNP
Vietnam drinks
• Founded in 1946 as a corn starch and coffee
Cambodia, Liwayway repacking business in the Philippines
2. Oishi Myanmar, Holdings Co. • Manufacture snacks, cereals, milk and other
Vietnam Ltd beverages
• Owns a manufacturing plant in Vietnam
• Established in 1976, it is based in Thailand
Friendship • Products include Hanami brand prawn cracker, corn
3. Ruaypuan Vietnam
Co, Ltd puff brand extruded snacks and other branded cookies
and biscuits
Cambodia, • Established in 1970
Laos, Thai Glico • The company has 19 factories in Thailand
4. Pocky
Myanmar, Co. Ltd • Products include chocolate covered sticks, stick
Vietnam pretzel and cream in stick biscuits
United • Established in 1975 and based in Bangkok
5. GAP Vietnam Foods Public • Produces seaweed snack, biscuits, jelly and candy
Co., Ltd • The company also provides OEM services
• The company was founded in 1993
Mondelēz
AFC, Kinh • MondelezKinh Do were launched in 2015 after
6. Vietnam International,
Do Mondelez International acquired a 100% stake in Kinh
Inc.
Do in 2015
Tan
• Founded in 1984
TanCultivatio
Snacko, Cambodia, • With a factory area of 45,000 m2 and over 800
7. n - Trading -
Tan Tan Vietnam employees
Manufacturin
g Co., Ltd • The company also provides OEM services
Cambodia,
World Foods • Founded in 1991
Chicky Laos,
8. International • The company is a Thai snack and fruit juice
Stick Myanmar,
Co., Ltd manufacturer
Vietnam
Sa Giang
• Established in 1960
9. Sa Giang Vietnam Import
• Public listed in Vietnam
Export Corp
3.5.2 RTD drinks

RTD Jelly
Table 3-13: Brief profile of major brands for RTD Jelly in CLMV, 2018
CLMV
Brand
Owner
presence
1. Jele SNNP
Vietnam drinks
Long Hai
2. Long Hai Vietnam • Producer for Carrageenan powder in Vietnam
Co., Ltd
Cambodia, • Formerly known as MaleeSampran Public Company
Laos, Malee Group Limited and changed its name to Malee Group Public
3. Malee
Myanmar, Co Ltd Company Limited in April 2016
Vietnam • Headquartered in Lam LukKa, Thailand
IMR Report Page 57

CLMV
Brand
Owner
presence
• Manufactures and distributes canned agriculture
products, fruit juices, and non-alcohol beverages in
Thailand and internationally
Table 3-14: Brief profile of major brands for Asian Specialty Drinks in CLMV, 2018
CLMV
No. Brand(s) countries of Brand Owner Profile of brand owner
presence
Laos, • Started as an importer and distributor in Thailand
1. Magic Farm SNNP
Myanmar, and expanded as a manufacturer for snacks and
Vietnam RTD drinks
• In 2011, KIRIN Group became a majority
shareholder of Interfood
Interfood
2. Wonderfarm Vietnam Shareholding • Owns two factories in Vietnam, namely
Company Interfood’s factory, in Bien Hoa, Dong Nai, which
produces WONDERFARM’s canned products,
while KIRIN’s factory, in Binh Duong, produces
KIRIN’s bottled products.
• Founded in 1994
• Operates three of the leading national brands
Tan Hiap Tan Hiep Phat
3. Vietnam across Vietnam: Zero Degrees Drink Tea, Dr
Phat Beverage Group
Thanh Herbal Tea, Number 1 Energy Drink
• Supplies to 16 other countries
Tan Quang Minh
• Founded in 1992
Cambodia, Manufacturing
• The company has a 15,000m2 factory with 12
4. Bidrico Myanmar, and Trading
modern lines
Vietnam Company
Limited • Exports to 14 countries
• Founded in 1969
• One of Thailand's leading processor,
Cambodia, Lam Soon manufacturer and distributor of processed fruits
5. UFC Refresh Myanmar, (Thailand) Public and vegetables, beverages, sauces and
Vietnam Co. Ltd seasoning
• Owns and operates two factories in the Lampang
and Nakhon Pathom provinces, Thailand
• Incorporated in Vietnam in 2004
• The company is a 100% foreign-owned
Cambodia,
Rita Food & enterprise
6. Rita Myanmar,
Drink Co. Ltd • The company has a 30,000 m2 plant with more
Vietnam
than 10 production lines.
• It also provides ODM and OEM services
Nam Viet Foods
Vinut, • The company is 100% Vietnamese owned
7. Vietnam Beverage Co.,
Jojonavi
Ltd • It provides private label or OEM and ODM
services
3.6 INDUSTRY OUTLOOK & PROSPECTS

The inauguration of the ASEAN Economic Community has resulted in a paradigm shift in the
economic growth within the frontier markets, including the CLMV region. Countries, such as Laos,
Vietnam and Cambodia have experienced varying forms of political and economic transformation;
the level of the consumer disposable income has grown. An increase in disposable incomes will
likely translate into greater food & beverage sales and Frost & Sullivan opines thatthe CLMV
IMR Report Page 58

region is likely to remain a fast-growingarea for the sale ofsnacks and RTD drinks against the
backdrop of favourable economic outlook and a sizeable and growing consumer base.
In spite of an attractive growth outlook, having a strong distribution network is considered as highly
important for companies to quickly gain market share. This is particularly important in an
environment with a low level of urbanisation;rural districts are largely untapped due to poor
infrastructure and underdeveloped retail environments. This presents an attractive opportunity for
companies to gain fast a strong brand loyalty as an initial market entrant.
4 PROSPECTS AND OUTLOOK FOR SRINANAPORN MARKETING PCL (SNNP)

Due to the positive economic environment in Thailand and CLMV countries, SNNP possesses
future growth potential. The growth of the disposable income and the increasingly busier and
healthy lifestyle of the populationprovide more opportunities for the sales of snacks, RTD drinks,
and overall packaged and ready to consume products. In addition, due to the growing disposable
income consumers are overall making more impulsive purchases and are more interested in the
purchase of healthy food & beverage products.
The company benefits from having a wide variety of fast growing product categories under its
portfolio. Its brands (e.g. Bento, Lotus, Jele) are top sellers in Thailand, and are growing fast in
CLMV countries.While Bento is overall the second largest in the seafood snack category in
Thailand, it controls over 75% of the cuttlefish market specifically in 2018. In addition, Jele is a
market leader within the jelly segment in Thailand, with a market share of 50.9% based on June
2019 MATandmore than double that of the second largest competitor brand in the market. In the
jelly pouch market, Jele’s dominant market scale (85.4% market share in 2018) has reaped
benefits for SNNP as the segment is growing at a CAGR of 12.8% in the period from 2013 to 2018.
The variety of productshelps the company in mitigating risks,such as changes in consumer
preferences or seasonality factors. In addition, it helps in capturing a broad diversity of customers
(e.g. youngsters, health and beauty conscious). The sale of products under different packaging
sizes (smaller/larger) provides more choices for consumers.
Notwithstanding, its 30 over years of presence in the Thai market, the company’s continuous
product innovation and improvement of the operation efficiency in its own manufacturing facilities,
give SNNP the advantage of providing new products to retain interest from customers at an
affordable price compared to similar products in the market. Among others, SNNP has taken
advantage of the growing trends for healthier products (e.g. JeleBeautie and Jele low sugar) and
growing demand for protein products (e.g. seafood snacks). In addition, the R&D capabilities on
product innovation have supported SNNP’sposition as a leading market player and provide the
company an edge in developing new products despite new market entries,. Examples include the
introduction of Jele Low Sugar range to address the changing consumer trends and pre-empt any
potential impact from the introduction of the sugar tax.
The growth of the company is further supported by its vast distribution network in traditional trade
and moderntrade channels, as well as its strong partnership with third-party operators, which
ensure a wide coverage of the market and the availability of the products at major points-of-sale,
conveniently for the customers. The company has extensive network of its flagshipproducts. For
example, as of June 2019, Bento covered about 51% of the numeric distribution coverage for the
cuttlefish snack market and 87% of the weighted distribution coverage for the cuttlefish snack
market, while JeleBeautie and JeleBeautie Low Sugar covered 20% of the numeric distribution
coverage and 83% of the weighted distribution coverage for the jelly market in Thailand. The
growth of traditional trade and modern trade in Thailand and CLMV is expected to further support
SNNP’s effort to penetrate further into underserved and unserved areas, particularly located in
remote rural areas.
IMR Report Page 59


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Independent Market Research Report

on the Premium Snacks and RTD Drinks Market

100 Beach Road

#29-01/11 Shaw Tower

The Board of Directors

Dear Sirs / Madams,

For and on behalf of Frost & Sullivan (S) Pte Ltd:

IMR Report iii

1.1 M ACROECONOMICS OVERVIEW FOR THAILAND

1.1.1 GDP and population

21,000 4.0% 4.1% 5.0%

Real GDP Growth Rate (%)

Nominal GDP (THB billion) Real GDP growth (%)

IMR Report Page 1

1.1.2 Social economic trends

Source: World Bank; Frost & Sullivan

IMR Report Page 2

110,000 107,625.4 2.5%

Source: World Bank Data;Frost & Sullivan

Source: World Bank Data; Forecast by IMF; Frost & Sullivan

1.1.3 Political and business environment

IMR Report Page 3

1.1.4 Prospects and outlook for Thailand

1.2 M ACROECONOMIC OVERVIEW OF CLMV

1.2.1 GDP and population

IMR Report Page 4

IMR Report Page 5

Source: IMF; Frost & Sullivan

6.8% 6.7% 6.6% 6.5%

Note: ASEAN-5 comprises Indonesia, Malaysia, Philippines, Singapore and Thailand.

IMR Report Page 6

Source: IMF; Frost& Sullivan

IMR Report Page 7

+60 6.4% 8.4%

50-59 7.2% 8.5%

40-49 10.6% 10.7%

30-39 13.1% 16.2%

20-29 19.7% 17.3%

10-19 20.9% 18.7%

0-9 22.1% 20.2%

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

+60 5.9% 7.2%

50-59 6.2% 7.5%

40-49 9.3% 11.1%

30-39 13.2% 15.9%

20-29 19.5% 18.2%

10-19 22.4% 19.9%

0-9 23.5% 20.3%

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

IMR Report Page 8

+60 8.3% 11.1%

50-59 9.3% 10.6%

40-49 12.5% 13.3%

30-39 15.3% 14.8%

20-29 16.7% 17.2%

10-19 19.1% 17.1%

0-9 18.8% 15.9%

+60 9.6% 14.0%

50-59 10.3% 11.6%

40-49 13.4% 14.1%

30-39 16.0% 16.9%

20-29 19.1% 13.9%

10-19 15.7% 14.3%