Thailand’s farm and food industry has been constantly incorporating new innovations in an effort to meet the increasingly sophisticated demands of a global market that is becoming swamped with virtually endless options.
Staying ahead of the game in this hugely competitive environment requires access to a wide diversity of raw materials on vast agricultural plantations and a well-developed supply chain. Leveraging advancements in digitalization and utilising deep technology such as 3D printing, AI and big data, the Thai agri-food industry is also producing foods that align with mainstream intelligence technology as well as addressing environmental concerns.
Indeed, the accelerating shift of consumer demand for innovative foods such as alternative proteins, medical food, functional food and 3D food printing has created an unprecedented change in the Thai food industry, with the recent emergence of aspiring startups. Attuned to global trends and technology, these startups are playing a key role in cementing top-of-mind awareness of Thailand’s food brands among consumers.
The Thai food development industry also places priority on progressing with a greater focus on safety standards and transparency in each step of production. Notably, the Thai government recently launch a blockchain system which serves as a portal for consumers to trace and track each process.
In the global market, Thai food entrepreneurs have showcased their strengths with exports performing well in 2020, even when global demand subsided in light of the pandemic. As consumers looked for quality food products with a long shelf live during periods of restrictive outdoor activity, Thai frozen and processed fruits and vegetables, beans and soup powders proved popular, placing them among products that held up in the global market.
Food for Future Development
The global popularity of Thai tourism and culture alongside the quality of its food and farm products have contributed to “made-in-Thailand” products resonating uniqueness and quality in the global market. With a skilled workforce and an agricultural sector derived from a culture deeply rooted in agriculture wisdom and well-established supply chains, Thailand has successfully developed its food industry to become the world’s 11th largest food exporter in 2019, placing it second only to China in Asia.
The Thai government is currently implementing a medium-term plan to develop the Thai food industry extensively, with the goal of adding economic value to local food and farm products for local economic development as well as establishing Thailand among the world’s top ten largest food exporters. Thailand’s effort will also fulfil its role in helping address food insecurity in some countries as exposed by the COVID-19 pandemic.
Thailand’s vibrant food industry accounts for one-fourth of the country’s industrial gross domestic product and uses more than four-fifths of local raw materials for production. The people’s strength and the country’s endowment of vast agricultural plantations, the diversity of agricultural products, a well-established agri-food industry, and a geographic location at the centre of the ASEAN region have underscored Thailand’s strong position in the global food supply chain.
The Thai government has identified “Future Food” as an industry that will become a key economic driving engine, as a combination of a passionate new generation of food producers, digitalization and food technology has elevated Thailand’s place to a global level in this exciting new industry.
The government’s food development plan focuses on four areas: building new entrepreneurs, scaling innovations, utilising online marketing platforms and improving the ease of doing business.
Government agencies are supporting Thai farmers by promoting their adoption of Agri-tech, such as automation & robotics, AI (Artificial Intelligence), IoT (Internet of Things) and plant factories, to increase their productivity and overcome problems such as weather uncertainty and high operating costs.
The Thai government’s policy to streamline its digital databases and the operations of all of its agencies, as directed by an act enacted in 2019, will further enhance Thailand’s standing as one of the most promising locations for investment in the food industry.
Mentoring Food Warriors
The Thai government envisages Thailand becoming a key global player in the “Future Food” market – a new genre of food that is both functional and novel, often involving R&D and technology-enabled production processes and services.1 As the food industry can be driven by ideas on which – with the right mentors and investment – a plausible business model can be built, Thailand has seen the development of many new home-grown entrepreneurs rolling out food innovations that utilise the latest food tech and agri-tech in startups that cater to multiple consumer demands.
“SPACE-F”2, Thailand’s first global food tech startup incubator and accelerator, is now running Batch-II acceleration. Run by the National Innovation Agency, Mahidol University and Thai multinational food conglomerates, SPACE-F aims to serve as a platform on which promising entrepreneurs can receive mentorship and guidance from corporations, venture capital firms, corporate venture capital firms, and agencies that will empower them to scale up their food tech startups to succeed on the global scale.
Since the start of the program in 2019, four food tech startups, out of a total of 34 participants, have received funding to scale up their business ventures. Among the local innovations showcased in SPACE-F were sesame milk, protein from duckweed, protein from crickets, a biodegradable fruit coating solution and a sensor system for food production quality control.
Reflecting their interest in food tech startups, local multinational food companies have also teamed up with startup funds to invest in food tech startups worldwide.
BOI Promoting Agri-Food Technology
The Thailand Board of Investment3 has introduced tax incentives throughout the supply chain of the agri-food businesses, with a special focus on technology in the form of R&D, productivity enhancement, agri-tech, high-technology quality testing, plant factories and sustainability certification.
The incentives offered include:
- 8-year CIT exemption for the manufacture of medical food and food supplements
- 8-year CIT exemption for adoption of advanced technology such as fruit ripeness sensor, radio frequency pest control and nuclear magnetic resonance in grading, packaging and storage of plants, vegetables, fruits or flowers
- 8-year CIT exemption for the manufacture of biomolecule and bioactive substance using microorganism, plant cells or animal cells
- 8-year CIT exemption for seed industry and improvement of plant, animal or microorganism breeding using biotechnology
- 5-year CIT exemption for manufacture of oil or fat from plants or animals (except soybean)
- 5-year CIT exemption for the manufacture of food, beverage and seasoning ingredients, excluding alcoholic beverages, caffeinated drinks, bakery products and candies
- 5-year CIT exemption for the adoption of smart farming systems such as the use of sensors, drones, or greenhouses
- 5-year CIT exemption for investment in plant factories
- 5-year CIT exemption for the manufacture of animal feeds which comply with food safety standards such as ISO 22000