The Outlook for Primary Packaging Containers, Closures and Outers
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1 dd 1. Industry Forecast Latest Trends and Key Issues in the Thailand Retail Packaging Market The Outlook for Primary Packaging Containers, Closures and Outers Reference Code: PK1119MR
2 Table of Contents 1. Executive Summary Overview of the Thailand Packaging Market Consumer Drivers Aging population and decreasing household size demands smaller sized packaging Aging Population in Thailand creating a new consumer segment Decreasing household sizes will drive the demand for smaller pack types Large rural population will drive demand for low cost packaging solutions Macro-economic trends influencing consumer buying Declining unemployment rate observed in Thailand Growth in tourism industry will increase demand for overall packaging Increased FDI indicates good future prospects for packaging industry Expansion in Modern Retail and increasing preference for culinary convenience drive demand for retail ready packaging formats Changing structure of the retail sector expected to boost demand for retail ready packaging Consumers seeking culinary convenience fuel the demand for Prepared Meals Better price and retail-based promotions hold supreme among Thai consumers Market Dynamics Overview Thailand Packaging Market by Material Thailand Packaging Market by Industry Sector Thailand Packaging Market by Pack Type Flexible Packaging Overall Flexible Packaging Market Number of Flexible Packaging Packs by Market Number of Flexible Packaging Packs by Type Number of Flexible Packaging Packs by Closure Material Number of Flexible Packaging Packs by Closure Type Number of Flexible Packaging Packs by Outer Material Number of Flexible Packaging Packs by Outer Type Paper & Board Overall Paper & Board Packaging Market Number of Paper & Board Packs by Market Number of Paper & Board Packs by Type Number of Paper & Board Packs by Closure Material Number of Paper & Board Packs by Closure Type
3 4.3.6 Number of Paper & Board Packs by Outer Material Number of Paper & Board Packs by Outer Type Rigid Plastic Overall Rigid Plastic Packaging Market Number of Rigid Plastic Packs by Market Number of Rigid Plastic Packs by Type Number of Rigid Plastic Packs by Closure Material Number of Rigid Plastic Packs by Closure Type Number of Rigid Plastic Packs by Outer Material Number of Rigid Plastic Packs by Outer Type Rigid Metal Overall Rigid Metal Packaging Market Number of Rigid Metal Packs by Market Number of Rigid Metal Packs by Type Number of Rigid Metal Packs by Closure Material Number of Rigid Metal Packs by Closure Type Number of Rigid Metal Packs by Outer Material Number of Rigid Metal Packs by Outer Type Glass Overall Glass Packaging Market Number of Glass Packs by Market Number of Glass Packs by Type Number of Glass Packs by Closure Material Number of Glass Packs by Closure Type Number of Glass Packs by Outer Material Number of Glass Packs by Outer Type Packaging Design and Manufacturing Trends Key Design Trends Thailand retail market demonstrates demand for convenient packaging Improvement in closures in Thailand for convenience and light weighting Eye-catching package designs enhance shelf visibility Environmentally-friendly package gradually making inroads in Thailand retail space Packaging firms need to more closely align themselves with manufacturers needs Key Manufacturing Trends Demand for single-serve packs rise in Thailand retail market Advanced body-forming method for lightweight cans for lower costs Robotics packaging gaining prominence in Thailand packaging industry Ready-to-cook packages are increasingly in demand in the Thai market Difficulties in raw material procurement are driving up costs
4 6. Regulatory Environment Overview Key Directives and Laws Food Act B.E.2522 (1979) Regulations concerning food containers The Labeling of Pre-packaged foods Nutrition Labeling Alcoholic Beverage Control Act, B.E.2551 (2008) Tobacco Products Control Act B.E.2535 (1992) Competitive Landscape Competitive Landscape by Packaging Material Paper & Board Rigid Plastic Flexible Packaging Glass Metal Key Companies in the Thailand Packaging Industry Key Financial Deals Appendix What is this Report About? Time Frame Product Category Coverage Packaging Definitions Primary Packaging Container Primary Packaging Closure Primary Packaging Outer Methodology Overall Research Program Framework About Canadean Disclaimer
5 List of Figures Figure 1: Market share of various packaging materials (%), Figure 2: Thailand s population is aging Figure 3: The average household size is decreasing significantly in Thailand Figure 4:The proportion of rural population in Thailand remains high Figure 5: Unemployment rate is declining in Thailand over the period Figure 6: The number of international tourist arrivals is increasing in Thailand, Figure 7: Growing Foreign Direct Investments in Thailand Figure 8: Organized retail is growing in Thailand, Figure 9: Prepared Meals Market Volume in the major South East Asian countries, Figure10: Examples of Brochures use by major retailers in Thailand Figure 11: Thailand Packaging by Material (Number of Packs, Million), Figure 12: Sectors by Packaging Material with the Four Highest Growth Rates (%), Figure 13: Sectors by Packaging Material with the Four Lowest Growth Rates (%), Figure 14: Number of Flexible Packaging Units (Millions) and Annual Growth (%), Figure 15: Sectors with the Largest Market Share Gains and Losses in Thailand Flexible Packaging, Figure 16: Number of Paper & Board Packaging Units (Millions) and Annual Growth (%), Figure 17: Sectors with the Largest Market Share Gains and Losses in Thailand Paper & Board Packaging, Figure 18: Packaging Types with the Largest Market Share Gains and Losses in Thailand Paper & Board Packaging Figure 19: Closure Types with the Largest Market Share Gains and Losses in Thailand Paper & Board Packaging, Figure 20: Number of Rigid Plastic Packaging Units (Millions) and Annual Growth (%), Figure 21: Sectors with the Largest Market Share Gains and Losses in Thailand among Rigid Plastic Packaging, Figure 22: Packaging Types with the Largest Market Share Gains and Losses in Thailand among Rigid Plastic Packaging, Figure 23: Closure Types with the Largest Market Share Gains and Losses in Thailand Rigid Plastic Packaging, Figure 24: Outer Types with the Largest Market Share Gains and Losses in Thailand Rigid Plastic Packaging, Figure 25: Number of Rigid Metal Packaging Units (Millions) and Annual Growth (%), Figure 26: Sectors with the Largest Market Share Gains and Losses in Thailand Rigid Metal Packaging, Figure 27: Packaging Types with the Largest Market Share Gains and Losses in Thailand Rigid, Figure 28: Closure Types with the Largest Market Share Gains and Losses in Thailand Rigid Metal Packaging, Figure 29: Number of Glass Packaging Units (Millions) and Annual Growth (%), Figure 30: Sectors with the Largest Market Share Gains and Losses in Thailand Glass Packaging, Figure 31: Closure Type with the Largest Market Share Gains and Losses in Thailand Glass Packaging, Figure 32: Outer Types with the Largest Market Share Gains and Losses in Thailand Glass Packaging, Figure 33: Beverage in flexible pouch is light in weight and extends shelf life to one year Figure 34: Plastic bowl for noodle soup for on-the-go consumption Figure 35: Easy-to-open peel-off closure for convenient and safe usage Figure 36: Package designed like fruits offering natural look and feel effect to create increased shelf visibility Figure 37: Coconut-shell shaped package for coconut water drink with one year shelf life Figure 38: Eco-friendly bottle is 100 % recyclable and light in weight Figure 39: Key concerns of consumer goods manufacturers and packaging manufacturers, Figure 40: Single-serve packs for value-conscious Thai consumers Figure 41: Lightweight two-piece RTD coffee Can with TULC technology using dry-dwi method Figure 42: Distinction between conventional DWI and dry-dwi system used in TULC technology for light weighting Figure 43: ROBOX- a robotic case erector for on-demand packaging of box Figure 44: Boil-in-bag which can be placed directly in boiling water for cooking Figure 45: Crude Oil prices have risen sharply since 2003, and are forecast to remain high Figure 46: Thailand Packaging Competitive Landscape Figure 47: Methodology
6 List of Tables Table 1: Rural Population in Thailand remains high Table 2: Thailand Organized Retail Sales (THB Billion), Table 3: Thailand Packaging by Material (Number of Packs, Million), 2010, 2013 and Table 4: Thailand Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 5: Thailand Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 6: Number of Flexible Packaging Units (Millions) and Annual Growth (%), Table 7: Thailand Flexible Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 8: Thailand Flexible Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 9: Thailand Flexible Packaging by Closure Material (Number of Packs, Million), 2010, 2013 and Table 10: Thailand Flexible Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and Table 11: Thailand Flexible Packaging by Outer Material (Number of Packs, Million), 2010, 2013 and Table 12: Thailand Flexible Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and Table 13: Number of Paper & Board Packaging Units (Millions) and Annual Growth (%), Table 14: Thailand Paper & Board Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 15: Thailand Paper & Board Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 16: Thailand Paper & Board Packaging by Closure Material (Number of Packs, Million), 2010, 2013 and Table 17: Thailand Paper & Board Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and Table 18: Thailand Paper & Board Packaging by Outer Material (Number of Packs, Million), 2010, 2013 and Table 19: Thailand Paper & Board Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and Table 20: Number of Rigid Plastic Packaging Units (Millions) and Annual Growth (%), Table 21: Thailand Rigid Plastic Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 22: Thailand Rigid Plastic Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 23: Thailand Rigid Plastic Packaging by Closure Material (Number of Packs, Million), 2010, 2013 and Table 24: Thailand Rigid Plastic Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and Table 25: Thailand Rigid Plastic Packaging by Outer Material (Number of Packs, Million), 2010, 2013 and Table 26: Thailand Rigid Plastic Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and Table 27: Number of Rigid Metal Packaging Units (Millions) and Annual Growth (%), Table 28: Thailand Rigid Metal Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 29: Thailand Rigid Metal Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 30: Thailand Rigid Metal Packaging by Closure Material (Number of Packs, Million), 2010, 2013 and Table 31: Thailand Rigid Metal Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and Table 32: Thailand Rigid Metal Packaging by Outer Material (Number of Packs, Million), 2010, 2013 and Table 33: Thailand Rigid Metal Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and Table 34: Number of Glass Packaging Units (Millions) and Annual Growth (%), Table 35: Thailand Glass Packaging by Market (Number of Packs, Million), 2010, 2013 and Table 36: Thailand Glass Packaging by Type (Number of Packs, Million), 2010, 2013 and Table 37: Thailand Glass Packaging by Closure Material (Number of Packs, Million), 2010, 2013 and Table 38: Thailand Glass Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and Table 39: Thailand Glass Packaging by Outer Material (Number of Packs, Million), 2010, 2013 and Table 40: Thailand Glass Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and Table 41: Key Financial Deals in Thailand Packaging, Table 42: Product Category Coverage Table 43: Primary Packaging Container Materials Table 44: Primary Packaging Container Types Table 45: Primary Packaging Closure Materials Table 46: Primary Packaging Closure Types Table 47: Primary Packaging Outer Materials Table 48: Primary Packaging Outer Types
7 1. Executive Summary The Thai packaging industry grew at a Compound Annual Growth Rate (CAGR) of xx.xx% over the period; robust growth of xx.xx% is expected in the period. Thailand is undergoing significant macroeconomic and demographic changes, such as a rapidly aging population and a shrinking average household size, leading to the emergence of important consumer segments. These shifts are driving consumer packaging needs, for instance older consumers requiring packaging types that are easy-to-open, re-sealable, and easy-to-handle. CPG manufacturers and packaging converters need to stay abreast of these changes and adapt their products and services accordingly. Significant proportion of rural population and rising segment of older consumers impact the Thai retail market Thailand has a significantly large rural population, which is highly dependent on the low-paying agriculture sector, thus rural consumers have significantly lower average disposable incomes than urban dwellers. This creates demand for affordable retail formats such as sachets and single-serve packs, in order to help keep prices per unit attainable. Smaller average household sizes in Thailand are expected to further boost the demand for such packaging formats. The proportion of older consumers in Thailand, i.e. those 65 years and above, is rapidly growing, leading to this becoming an important consumer segment. This consumer group is expected to experience further growth in the future, resulting in a rise in demand for packaging that is light and easy to handle in terms of the closure format and product weight. Declining unemployment and rising Foreign Direct Investment (FDI) inflows indicate growing opportunity for packaging manufacturers The unemployment rate in Thailand is currently low, standing at xx.xx% in Coupled with the high level of consumer confidence, this is expected to lead to an increase in the demand for consumer packaged goods. In particular, Thai consumers have a greater tendency to spend more on essential goods such as food and grocery rather than on non-essential items such as electronics and apparel. This is expected to broaden the scope for packaging and make it more significant in Thailand s retail industry. A favorable environment for business has helped the increase of FDI inflow into Thailand. This is expected to enhance competition and prompt manufacturers to benchmark their offerings to international standards. Plastic packaging is increasingly preferred by Thai manufacturers Plastic is the preferred packaging material for manufacturers and packaging converters in Thailand. Flexible Packaging retained the largest share of the Thai packaging industry between 2010 and 2013, and this is forecast to continue Rigid Plastics are rapidly emerging as an alternative to heavier packaging materials, such as Glass. Steady growth was observed in its market share in the Thai packaging market and this is expected to continue in the future. The share of Paper & Board packaging is expected to decline, driven by slowing demand from Household Care and the Tobacco & Tobacco Products markets. 7
8 Growing preference for convenience and sustainability drive innovation in the Thailand packaging industry The Thai packaging industry has not been immune to the consumer price sensitivity and growing pressure on profit margins that have been driving changes and consequently influencing manufacturing and design trends globally. As a result of the growing price sensitivity, manufacturers have been looking at value additions that enhance their product s appeal and ability to stand out from competitors. Packaging provides manufacturers with an avenue to do this without incurring significant cost. As a result, packaging converters and manufacturers have been increasingly looking to enhance convenience in products, leading to a gradual change in the packaging process. This ongoing change will be highlighted in this report. Moreover, rising eco-consciousness has been affecting manufacturers and consumers alike, driving innovation in the Thai packaging industry as manufacturers increasingly look to reduce the environmental impact of their products and associated packaging. 8
9 2. Market Dynamics 2.1 Overview The packaging market in Thailand is currently experiencing strong growth. The total number of units consumed in Thailand across all CPG products within our research scope grew at a CAGR of xx.xx% between 2010 and 2013 and is forecast to grow at a CAGR of xx.xx% over the period. This section will explore the dynamics of the Thai packaging market, reviewing the changes that have taken place between 2010 and 2013, and forecast how the market will evolve in the period to This is first covered at an overall level, followed by more detailed analysis of the market material-wise Thailand Packaging Market by Material The Thai packaging market registered high volume growth between 2010 and 2013 at a CAGR of xx.xx%, reaching a total demand for xx million units of packs in The packaging market is also forecast to show strong growth in the period at a CAGR of xx.xx% with demand reaching xx million units in Flexible Packaging materials hold the largest share of the Thailand s retail CPG packaging market in terms of number of packs. Rigid Plastics is forecast to witness the fastest growth, growing at a CAGR of xx.xx% over the period, driven by increasing demand from Non- Alcoholic Drinks market. Figure 1: Thailand Packaging by Material (Number of Packs, Million),
10 Table 1: Thailand Packaging by Material (Number of Packs, Million), 2010, 2013 and 2016 Market Flexible Packaging Glass Other Paper & Board Rigid Metal Rigid Plastics Overall CAGR CAGR Thailand Packaging Market by Industry Sector Non-Alcoholic Drinks and Food are the largest packaging end use market sectors, together accounting for xx.xx% of Thailand s primary packaging market in 2013 and are projected to hold xx.xx% of the market share in The Food market will grow at a slow rate between 2010 and 2016, whereas a more dynamic growth rate is expected in Non-Alcoholic Drinks as it becomes the largest end-user of packaging in While Meat and Dairy Food are the key sectors driving growth in the Food market, Packaged Water is the main driver of growth in the Non-Alcoholic Drinks market. On the whole, all the packaging markets in Thailand will experience relatively strong and positive growth over the next few years with the CAGR for the overall packaging market increasing from xx.xx% in period to xx.xx% in period. Table 2: Thailand Packaging by Market (Number of Packs, Million), 2010, 2013 and 2016 Market Alcoholic Drinks Food Health & Beauty Home Improvement Household Care Non-Alcoholic Drinks Pet Care Tobacco & Tobacco Products Overall CAGR CAGR
11 2.2 Flexible Packaging Overall Flexible Packaging Market Flexible Packaging is the most widespread form of primary packaging for food and non food products, accounted for xx.xx% of total primary packaging by unit volume in With growing demand Flexible Packaging pack units is expected to reach xx million units by The Household Care and Food markets are forecast to be the major growth drivers for Flexible Packaging over the next few years. Figure 2: Number of Flexible Packaging Units (Millions) and Annual Growth (%), Table 3: Number of Flexible Packaging Units (Millions) and Annual Growth (%), Number of Packs Growth 11
12 2.3 Paper & Board Number of Paper & Board Packs by Market Food and the Tobacco & Tobacco Products together accounted for xx.xx% of the Paper & Board primary packaging market in Within Food, the Soy Products will have the largest increase in the share. Whereas demand for Tobacco & Tobacco Products packaging is expected to increase, its overall market share of the Paper & Board market will fall between 2013 and Despite registering a growth, Cigarettes, the most popular sector in Tobacco & Tobacco Products, will see their share of the Paper & Board market decline on account of higher growth in demand from non-tobacco markets. Table 4: Thailand Paper & Board Packaging by Market (Number of Packs, Million), 2010, 2013 and 2016 Market Food Health & Beauty Household Care Non-Alcoholic Drinks Pet Care Tobacco & Tobacco Products Overall CAGR CAGR Figure 3: Sectors with the Largest Market Share Gains and Losses in Thailand Paper & Board Packaging,
13 2.4 Rigid Plastics Number of Rigid Plastic Packs by Closure Type At xx.xx% Screw Top accounted for the largest part of the closure market in Increased demand from Soft Drinks will rapidly drive the use of Screw Top closures. Demand for Film, the second most popular closure in terms of number of units, will also increase due to its growing demand from Food and Non Alcoholic Drinks market. Table 5: Thailand Rigid Plastic Packaging by Closure Type (Number of Packs, Million), 2010, 2013 and 2016 Closure Type CAGR CAGR Cap Dispenser Film Flip/Snap Top Foil Lever Closure None Other Prize Off Screw Top Sports Cap Overall 13
14 Figure 4: Closure Types with the Largest Market Share Gains and Losses in Thailand Rigid Plastic Packaging, Rigid Metal Number of Rigid Metal Packs by Outer Type Of the outer types used for Metal packaging, the Box will register the fastest CAGR growth between 2013 and 2016, albeit from a very low base. Table 6: Thailand Rigid Metal Packaging by Outer Type (Number of Packs, Million), 2010, 2013 and 2016 Outer Type Blister Pack Box None Shrink Wrap Sleeve Overall CAGR CAGR
15 3. Appendix 3.1 What is this Report About? This report is the result of Canadean s extensive market and company research covering the Thailand packaging industry. It provides an analysis of changing packaging trends for eight key Consumer Packaged Goods segments, competitive landscape, and Thailand business environment. Consumption of primary, outer, and closure packaging is analyzed in detail. Latest Trends and Key Issues in the Thailand Retail Packaging Market provides a top-level overview and detailed packaging, and company-specific insights into the operating environment for packaging companies. It is an essential tool for companies active across the Thailand Packaging value chain, and for new companies considering entering the market. As such, this report is aimed at companies supplying to the following retail markets: Alcoholic Drinks Food Health & Beauty Home Improvement Household Care Non-Alcoholic Drinks Pet Care Tobacco & Tobacco Products 3.2 Time Frame For the purposes of this report, the following timeframes apply: Historic period: * Forecast period: *The 2013 values are the latest estimates as of the publication date 15
16 3.3 About Canadean Canadean is a full-service business information provider with in-house market research capabilities. We specialize in analysis across the Consumer Markets Value Chain, covering suppliers, producers, distribution, and consumers. Canadean s dedicated research and analysis teams consist of experienced professionals with an industry background in marketing, market research, consulting, and advanced statistical expertise. We offer valueadded market research, insight, and strategic analysis and our products help companies to make better, more informed, strategic and tactical sales, and marketing decisions. Canadean s areas of expertise include online research, qualitative and quantitative research, industry analysis, custom approaches, and actionable insights. In addition, Canadean has built a network of consultants and specialist researchers across more than 60 countries, each with in-depth industry experience and expertise enabling us to conduct unique and insightful research via our trusted business communities. 3.4 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Canadean. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Canadean delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, Canadean can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. 16
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