The domestic potato chip market is anxiously watching news of declining potato yields in Thailand. This year yields are expected to drop by 10-20% to between 7,000 and 8,000 tonnes, a figure that could stem the growth of the potato chip industry by up to 5%.
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“The snack-food market will be more fiercely competitive this year due to the shortage of potatoes. We have already adjusted our forecast growth in market share down to 16% from 18% projected earlier,” revealed Pattaphong Iamsuro, managing director of Berli Jucker Foods, which produces the Tasto brand.
For potato chip producers, already battling against declining sales in a sluggish Thai economy, lower crop yields can only add to uncertainty.
Tasto, which controls 14% of the domestic market, now expect to lose sales opportunities worth a combined 70m baht. Last year the story was similar, with reduced yields adding to the difficulties of intensified completion to slash sales from an expected 850m baht to 650m baht. This year however,
Pattaphong said the company is counting on short-term sales through promotions to bring in the revenue. It has also invested heavily in new product lines and new machinery to boost turnover.
Frito Lay, the PepsiCo snack food subsidiary, currently controls 50% of the domestic potato chip market, has recently gained approval from the Thai Board of Investment to invest 465m baht in its Lamphun factory, where it hopes to expand production capacity of chips to 4,620 tonnes a year.
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By GlobalData
