Thailand Functional Foods Market– Forecast (2024-2032)

Overview

The Thailand functional foods market size is forecast to reach USD 6.94 billion by 2032, after growing at a CAGR of 7.58% during 2024-2032. One major factor driving the growth of functional foods is the aging population. Older individuals are more prone to chronic illnesses such as diabetes, heart disease, and cancer, and functional foods can help manage these conditions, making them popular among seniors. Another significant factor is the growing consumer emphasis on health and wellness. As people become more aware of the connection between diet and health, they seek foods that support health goals. This increased awareness has boosted demand for functional foods that offer specific health benefits.

Technological advancements also play a crucial role in the expansion of the functional food market. The food industry is incorporating functional ingredients more effectively, with technologies like encapsulation protecting sensitive components such as probiotics and omega-3s, allowing their inclusion in a wider range of products. Moreover, sustainability is becoming a key focus, with companies like ReGrained, a San Francisco startup, creating healthy snacks from food waste, such as spent grain from beer brewing, successfully diverting over 1 million pounds of grain from landfills.

Report Coverage

The report “Thailand Functional Foods Market– Forecast (2024-2032)”, by IndustryARC, covers an in-depth analysis of the following segments of the Thailand Functional Foods market.

By Product: Functional Beverages, Meal Replacement Foods, Oral Beauty Foods, Functional Foods (Dairy, Cooking Oils and Others), Others (Dietary supplements (VDS))

Key Takeaways

•    With the elderly population in Thailand projected to reach 20.4 million by 2040, accounting for 31.3% of the total population, the demand for health-supporting and disease-preventing food products is expected to rise significantly. This demographic shift started in 2021 with 13.8 million elderly individuals (20% of the population), highlighting the need for functional foods that support health and disease prevention. Elderly consumers and their caregivers are increasingly aware of the benefits of functional foods in managing chronic conditions and improving quality of life, driving higher adoption rates.

•    Natural formulations are expected to build trust among consumers seeking authenticity and transparency in their beverage choices. For instance, on March 22, 2022, QminC, a leading health beverage company in Thailand, introduced 'QminC Ginger with Honey' and 'QminC Finger Root with Honey.' These herbal-based health drinks feature advanced nano-liposome technology and no preservatives, aligning with the global demand for health-conscious, natural, functional drinks.

•    The increased presence of functional food products in retail locations is expanding the Thailand functional foods market. From 2019 to 2021, the number of retail outlets expanded significantly, with hypermarkets increasing from 368 to 391, supermarkets from 478 to 480, and convenience stores from 15,397 to 17,002. This expansion has made functional foods more accessible to a broader population.

By Product - Segment Analysis

Functional beverages dominated the Thailand Functional Foods market in 2024. The rising demand for functional drinks is largely fueled by consumers' perception of their health benefits and increased availability in stores. As individuals become more health-conscious and lead hectic lifestyles, they seek convenient, on-the-go options that provide nutritional value. Popular functional drinks often contain nutrients like vitamin C, collagen, zinc, and ginseng due to their effective health-promoting properties.

Beauty benefits are also important to Thai consumers, leading manufacturers to combine beauty-enhancing functionalities—like skin rejuvenation and brightening—with health benefits such as improved immunity. Additionally, there's a strong preference for traditional remedies, with local herbs like ginger and lemongrass being popular in immunity-boosting drinks. Kombucha has gained international popularity for its numerous claimed benefits, including digestive health and immune support. In September 2022, Coca-Cola Thailand launched Sprite Lemon+, a sugar-free lemon drink enriched with a high level of vitamin B3.

Drivers – Thailand Functional Foods Market

•    Rising Demand for Premium and Functional Beverages

Thai customers want sophisticated flavors and are conscious of their nutritional consumption, leading to an increase in demand for premium products. Customers are willing to pay additional for functional products especially functional beverages. For instance, Collagen and hyaluronic acid are added to beverages to promote smoother skin and delay aging. Functional beverages with immune and energy-boosting components seem more appealing.

•    BOI Incentives and R&D Support Propel Market Growth

The functional food industry in Thailand is driven by significant support from the BOI, which includes an 8-year CIT exemption for the production of functional and medical foods, as well as food supplements. Additionally, the industry benefits from a 50% reduction in corporate income tax for five years, extendable for another five years, and import duty exemptions for raw materials, machinery, and equipment. Land ownership licenses are also provided. Furthermore, the BOI actively promotes R&D to foster innovation and enhance the competitiveness. With around 17% of Thai food researchers specializing in functional foods, these incentives collectively drive the growth and development of Thailand's functional food sector.

•    Growing Prevalence of Diabetes

Functional foods are vital in managing diabetes mellitus by offering health benefits such as antioxidant, anti-inflammatory, and insulin sensitivity effects. They are crucial for both preventing and treating diabetes, effectively helping to lower blood sugar levels. In 2022, the Department of Disease Control (DDC) reported that the total number of diabetic patients has doubled from 150,000 in 2021, pushing the total number of diabetes patients in Thailand to 3.3 million. This rise in diabetes significantly drives the growth of the functional food market, increasing the demand for products that assist in managing blood sugar levels and promoting overall health.

Challenges – Thailand Functional Foods Market

•    Regulatory Hurdles and Compliance

Navigating Thailand's regulatory landscape for functional foods can be complex, especially concerning health claims and novel ingredients. Products must undergo rigorous evaluation to substantiate health benefits, and novel ingredients often require human trials for approval. This process can be time-consuming and costly, potentially delaying market entry.

•    Consumer Skepticism and Market Acceptance

Despite the growing interest in health and wellness, some Thai consumers remain skeptical about the efficacy and safety of functional foods. This skepticism can stem from a lack of awareness or understanding of the health benefits, leading to hesitation in adopting these products.

Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Thailand Functional Foods market. In 2024, the Thailand Functional Foods market share has been consolidated by the major players accounting for 61% of the share. Major players in the Thailand Functional Foods market are House Osotspa Foods Co.Ltd, TC Pharmaceutical, Carabao Tawandang Co.,Ltd., Amway, Tera Food & Beverage Company Limited, Doikham among others.

Developments:

•   In December 2023, Herbalife has announced a three-year collaboration agreement with the Nutrition Association of Thailand (NAT) for the 2024-2026 period to enhance nutrition training and expertise sharing in Thailand.
• In March 2023, Suntory Holdings Limited announced its new vision of becoming the most beloved beverage company in Thailand with its plans to penetrate the carbonated soft drink plus functional benefit market, which is a new option to reach consumers looking for healthy and refreshing drinks; strengthening its presence in ready-to-drink tea and coffee markets while expanding growth in the energy drink sector; and creating 360-degree marketing campaigns to reach.
• In 2022, Amway invested in public relations advertising as part of a complete marketing strategy to further build the brand. Margie-Rasri Balenciaga, a presenter for Nutrilite, was featured in a new series of advertising films for BodyKey weight management products. These films included billboard advertisements that were promoted nationally, spanning both Bangkok and other provinces. Additionally, digital billboards at landmarks and screen areas around the BTS showcased the campaign.
   

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