Despite 60% of key household shoppers claimed their disposal income was negatively impacted due to covid in a survey during Apr’21, take home grocery in Thailand gained 3.5% in 2021 which is the highest growth in 8 years. This is mainly driven by consumer continue to spend more time at home and significant increase of government subsidies that not only provide financial support to shoppers to spend but also effectively switch consumer spending towards SME or small shops.
In 2022 we expect a much tougher year for grocery market where, government subsidy to be much lower, life returns to normal, and a major price hike driven by energy and foods. Thai shoppers will be much more caution on their spending as the same basket of good will cost much more. Looking back at previous hyper-inflation in 2008, we learnt that shopper to adopt differently depending on categories. They could switch to cheaper brands/substitute product or completely remove the category from their basket to manage budget. We can expect shopping behavior to continue to shift but at a different magnitude.
Most major brands are seeing decline in Consumer Reach Point due to a fall in shopping trips at FMCG level, but Food and Beverage brands continue to maintain their stronghold among top ranking for the most chosen FMCG brands in Thailand. This is also accounted from higher at-home consumption due to frequent lockdowns, coupled with the government subsidy program which also motivates shoppers to go for bigger trip volume where brands could exercise their ability to capture demand for bigger packs.
Brands must be leading in both penetration and consumer choice in order to land in the top 3, where we’re unlikely to see dramatic movement in ranking since most brands are already at the top of their game in their respective segments.
Mama secured 1st position in 2021 by taking a leading role in instant noodles. The brand did not suffer that much loss of CRP during COVID, as in-home dining occasion are on the rises. In 2021, 8 out of 10 Thai households purchased Mama, which already has the highest brand penetration across FMCG.
Dutch Mill got dethroned and landed 2nd in the ranking as shopping occasions declined significantly since COVID. Dairy is still considered to be a necessity in households, but it did not escape decline, since Dutch Mill’s CRP lowered by 5%.
Lay’s gained more popularity during the COVID, securing 3rd position. With more at-home snacking occasions, Lay’s is one of the few brands among top 10 that recorded positive CRP growth.
Food & Beverage categories contribute heavily to the ranking for top growing CRP brands, as in-home demand during COVID was temporarily boosted, especially on Snacks, Beverages, and Food.
For Local brands like Tepthai, Jula Herb & BeNice, this is also a huge achievement, since they are leading the growth among Health & Beauty sector, and landed in the ranking despite the presence of its multi-national-brand competitors.
The Beverages sector still has stable ranking in its Top 5, with Nescafe holding its ground in 1st position for another year. But this does not exempt Nescafe from CRP decline, similar to other major brands, as shopping trips cut-down is happening across FMCG.
Only Coca-Cola is seeing CRP growth from its success in expanding into the reduced sugar segment, offering more choices to beverages consumers.
Dutch Mill continues to secure 1st rank with much higher CRP compared to other Dairy brands, but it is still subjected to the decline of shopping trips. Only DNA could achieve growth, which ranked at 3rd position, replacing Foremost with superior penetration & CRP.
Ovaltine is the only chocolate-malted dairy brand that landed in top 5, a good picture given its position in malted-base dairy, which is smaller in size compared to Liquid & Soy Milk which is more mainstream.
The Food sector always has the highest CRP on average among FMCG, but the sector also experienced similar decline across major brands. Major cooking aid categories such as Seasoning & Cooking Oil – namely, Rosdee, Ajinomoto & Morakot – are seeing decline in this 2nd year of COVID. Only Lay’s managed to show positive growth in CRP due to more in-home snacking.
Hygiene continues to be 1st in ranking from their Fabric Softener categories, winning CRP against competitors by quite a margin. Downy also secured higher ranking in 2nd by defeating Breeze, managing to also grow CRP despite decline across major brands. OMO also shows positive CRP growth from its expansion into Dish Wash, but this needs a lot more push if it wants to secure higher rankings.
Colgate is still a clear winner in the Health & Beauty sector for another year from both its high-base penetration and CRP, being almost x2 that of Sunsilk which maintained its 2nd place ranking.
Since Health & Beauty is among the first choice that got dropped-off by TH shoppers if they were to cut down categories, major brands will suffer the loss of CRP. Only Nivea, which operates in various Health & Beauty categories, managed to secure growth, being the only brand among top 5 without CRP decline.
Despite shopping trips decline across the pandemic, Dutch Mill continues to secure 1st position among Dairy brands, and more importantly, able to maintain its level at 2nd ranking in FMCG level as well.
Dutch Mill’s success lies not only in their strong brand presence, but also their ability to adapt alongside the changes in shoppers’ demand by driving larger pack size to match the basket-loading behavior during COVID times as well.
With higher constraint on disposable income across Thai households, Dutch Mill’s strategy to drive bigger size also enables them to maintain competitive pricing, which further enhanced its reign in Dairy market especially in smaller store formats; Convenience Store & Provision Store. The future path for Dutch Mill still lies within its ability to expand buyers in long term; either within its core Yoghurt & Milk, or even among other Dairy-based categories which would surely bring an excitement to the market.
1. What makes Dutch Mill unique as a brand? Consumer proximity. It is a brand that is close to consumers’ hearts and supports their health needs. Everyone can enjoy Dutch Mill, it is a household brand for everyone!
2. From your own brand’s perspective, which path do you think is the biggest growth opportunity for Dutch Mill and why? (e.g. category expansion, regional execution, strong channel strategy, etc.) Dutch Mill has wide distribution coverage, and together with big data we see great opportunity to further drive our channel strategy to better serve our customers and consumers.
3. Is there any strategy adaptation during the 2nd year of COVID (2020 vs 2021)? Anything you did differently during the pandemic to maintain your reach towards consumers? During such a difficult situation, our key focus is to retain our core users while recruiting new users to our brands and categories through heavy sampling to encourage users to trial our products.
We have also been doing more to support our consumers, especially those affected by COVID-19 and those who are in need, providing our products to hospitals, vaccination centres and more to support their health needs.
4. Are there any changes in consumer behaviour that surprised you the most during COVID? Probably the drive towards health needs and understanding nutrition that supports a healthy immune system. Consumers are much more receptive and seem to be able to grasp information and education, especially around COVID.
5. Where do you see the FMCG market & your category going in the coming months (short-term)? One of the major impacts on consumers are the price increases in many categories. We hope all companies will do their best to sustain their current pricing to help lessen the impact on consumers’ expenses.
6. What is your future outlook on FMCG? How do you think these COVID years will be remembered 10 years from now? I think the need for Health and hygiene will stay and the idea of prevention will become more important. Ecommerce and cashless payment systems will be expanded and will penetrate even deeper as more people understand them and get acquainted.
The COVID years will be remembered as years of losses for affected people and missing out, especially younger generations who have had to stay home or have been isolated from their social circles e.g. schools, outdoor activities, friends, and opportunities to enrich their lives’ experiences.
