Future food sector is growing in 2022, but not without challenges

Kasikorn Research Centre recently lowered its 2022 growth forecast for future food – non-meat protein products made from plants, algae, nuts, insects and fungi – from 7 per cent to 5.1 per cent year on year, with total market value at 4.1 billion baht.

“Although alternative protein or future food is enjoying market expansion fuelled by eco- and health-conscious consumers and increasing sales channels, its expansion is still limited, especially among consumers with low to medium income who are suffering from reduced purchasing power,” KResearch said.

The centre said the current economic climate would make it harder for future-food manufacturers to expand their customer base and increase sales.

“Food products are responsible for 36 per cent of Thai household expenditure and are therefore affected by the economic crisis in which the cost of living and inflation are rising, while people’s purchasing power is weakening,” KResearch said.

Future food’s current customer base is health-conscious consumers and so-called flexitarians (mainly-vegetarian consumers who enjoy animal products every so often), while the major sales channels are modern trade, restaurants and online shopping.

The centre added that consumer’s reduced purchasing power is not the only challenge facing the future food industry. Small players in particular are facing higher costs and barriers to reach target consumers, as more large companies powered by unlimited finances enter the market.

Risks also exist from costs of imported ingredients like beans, whose prices are expected to rise further in the second half of 2022. The future food industry might turn instead to locally produced ingredients as a more sustainable solution.

Alternative protein is a protein that does not come from meat. It is produced by other organisms such as plants, algae, nuts, insects and naturally occurring fungi.