Thailand's Healthy Appetite

An Expert's View about Specialized Food Retail in Thailand

Last updated: 28 Apr 2011

Thailand's food industry is serving up two specialty sectors with strong growth and investment potential: medical and Halal food.

Although these sectors currently represent only a small fraction of the country's earnings from foods and beverages, they are poised to accelerate in size and range.

In particular, local Halal producers enjoy market proximity to neighbouring countries with large Muslim populations, namely Indonesia and Malaysia.

Medical foods consist of products specially formulated for the dietary management of diseases with distinctive nutritional needs that can't be met by a normal diet. The products are administered orally under the supervision of a physician.

These are not over-the-counter dietary supplements or so-called health foods, but instead are used as part of treatment for disorders and diseases ranging from asthma to diabetes and Alzheimer's.

Formulas sometimes contain ingredients such as gamma-linolenic acid from the seeds of the borage plant or eicosapentaenoic acid sourced from fish.

With generous government support, major pharmaceutical companies such as Mead Johnson, Abbott and Novartis have found Thailand a strategic location for manufacturing medical food.

Thai Otsuka Pharmaceutical is another leading maker of medical food in Thailand. A joint venture between Otsuka Pharmaceutical (Japan) and S Charoen, the company was established in 1973, with its head office in Bangkok and production facilities in Samut Sakhon Province.

The venture's second factory began manufacturing medical food in the late 1980s, making it the first plant in Thailand to turn out these specialised products.

Thai Otsuka continues to play a big role in promoting the sector.

Halal sector widening

The Halal food sector is expanding, on the strength of demand for reliable standards. Singapore, Malaysia, Indonesia, Brunei, the UAE, Saudi Arabia and Egypt are the main markets for Thai-made Halal foods.

With the world's largest Muslim population, Indonesia is a particularly attractive market.

Through overall market expansion and the continual launch of new products, Thailand's exports of Halal food should grow by at least 10% annually through 2014.

Estimates of the global Halal food market in 2010 range from US$635 billion to US$1 trillion, with Thailand said to provide a 5.6% share, as the world's fifth-largest producer.

With 30 million Muslims, China looms as a potentially lucrative market for Halal products.

Thai entrepreneurs also aim to cultivate business opportunities in Mongolia, Russia, Kazakhstan, Kyrgyzstan and Pakistan.

So far, about 1,700 Thai suppliers have obtained Halal certification and the number is set to increase, with Halal foods key to the government's efforts to promote the country as a "kitchen of the world".

As they develop and expand, the medical and Halal food sectors are indeed becoming increasingly important elements of Thailand's food industry.

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Posted: 26 April 2011, last updated 28 April 2011