This is the view of Visit Limlurcha, Chairman of Thailand’s Food Processing Industries Club, Federation of Thai Industries, and President of the Thai Food Processors Association.
“The total value of Thai food exports last year came in at THB1tn (US$32.5bn), and Thailand was ranked as the top 11th food exporter worldwide and second in Asia due to our policies on food production, making us known as the ‘Kitchen to the World’”, said Limlurcha.
“The COVID-19 pandemic impact negatively impacted this in Q1 of 2020, causing a 4.7% year-on-year drop to THB231mn from THB252mn in Q1 2019.”
In light of this, he advised local F&B companies to ‘adapt to survive’ both during and after the crisis, and focused on packaging as an important part of this.
“Given the current situation, many people are going to place more emphasis on food safety and storage,” he said, adding: “I anticipate that the demand for foods in metal cans are likely to see a rise.”
“Plastic packaging, whether it be for wrapping RTE foods or other groceries, will also be preferred by people as they feel it will keep them safer from the coronavirus.
“So within the next two years or so, it is probable that metal and plastic are going to be highly popular choices for food packaging, even more so than before, and food companies need to take note of this [and align this with existing sustainability goals].”
This observation is in line with that of industry analysts, which have anticipated a rise in the use of single-use, disposable food packaging during and after the COVID-19 crisis.
Water as a key production component
To sustain food production during the crisis, Limlurcha emphasized that a clean water supply is also absolutely essential – a less-oft discussed issue as compared to commodity availability, but a very real one for Thailand which suffered major losses in 2011 after most of the country was ravaged by floods.
“Water is one of the most essential factors in food production, it plays a role not only as a food ingredient but also in the production process, cleaning process and more,” he said.
“In 2011, when Thailand was hit by serious floods, many factories saw raw materials, finished products and machinery ruined.
“It was a very bad experience for the food industry, but also a good teacher in terms of crisis preparation [so] though water shortage is not a major issue this time, [companies still need to stay aware, especially with the recent droughts].”
Technology
When it comes to thriving post-crisis, Limlurcha anticipates that ‘a lot’ of change is needed in F&B firms, especially in terms of technology.
“After the COVID-19 crisis passes, we need to change a lot – current social distancing measures mean that new social norms post-crisis will focus on the growth of e-commerce, and technology will be key in supporting this,” he said.
“E-commerce is very important to help SMEs sell their goods at a lower cost, and this will need things such as internet/mobile banking to support a cashless economy.”
He also emphasised the need to use big data and analytics higher up in the food chain to help farmers gauge demand for crops and suitable quantities to plant, so as to also ensure a steady supply of raw materials for manufacturers to produce finished products.
Thai foods during COVID-19
Despite the drop in Thailand’s exports during the first quarter of 2020, some food products still managed to see positive growth, especially those needed in self-isolation.
These included canned fish, canned fruits and vegetables, dried mangoes and coconuts, as well as sauces and condiments necessary for cooking at home during lockdowns.
“A lot of growth was also seen for sauces: Soy sauce, fish sauce, instant curry and more. The major difference seen was that more of the smaller sizes of these sauces were sold, as these were for home use, as compared to big bottles that sold better previously as these were preferred by food service outlets,” said Limlurcha, who was speaking in a webinar organised by FI Asia.
“This shows that Thailand is still a good place to invest, and indeed it is the best place to start a business as a gateway into South East Asia – we are in the centre of the region, so it is very convenient to distribute products to other ASEAN countries by land, sea or air easily.”
In 2019, Thailand was ranked 17th worldwide in terms of ease of doing business.
“Food companies should also note that a lot of future investment will be looking at trends such as health, sustainability, traceability and the use of cost-reduction technology, and be sure to keep up with these,” Limlurcha added.
