KResearch expects that food and beverage (F&B) spending in the country during 2022 will reach THB2.57-2.59 trillion, an increase of 1.9-2.7 percent, against the 2.5 percent growth reported for 2021. The increase will be supported by a 3.1 percent rise in their prices in line with elevated processing costs foreseen during most of the year as a result of instability in Ukraine that has precipitated supply-chain bottlenecks in global markets. In contrast, domestic F&B consumption will likely remain static or post a slight contraction of 0.6 percent YoY amid the high cost of living and intense business competition.
The impending rises in F&B processing costs are bound to affect consumer spending behavior although the weight given to the spending amount may vary as deemed necessary by each consumer.
It is projected that spending on edible oils, meat/dairy products and eggs will continue to increase from last year, buoyed chiefly by their higher prices. However, their consumption may not decline sharply because they are considered as necessities and consumers are expected to set aside a budget for such products.
Spending on vegetables, fruits and instant foods is set to increase, albeit at a slower rate from that reported for 2021 due primarily to their higher prices, as well. Because such products may not be considered as necessary as those mentioned above, consumers will likely cut such purchases to ensure that their spending is within their set budget.
Product categories that are expected to see increased spending due to their higher prices and the low base of 2021, though their consumption may decline, are alcoholic beverages, cereal-based product, fish and seafood, and sugar-based products.
Aside from costs that present an immediate challenge to the F&B business during 2022, there are other challenges that related entrepreneurs will experience, particularly new consumer behavior and regulations that attach greater importance to health and the environment. Given this, they are advised to accelerate the enhancement of their production and service efficiency in order to stay afloat and grow in a sustainable manner.