Distribution channel of Distribution channel of Tropical Fruits in - - PowerPoint PPT Presentation

Distribution channel of Distribution channel of Tropical Fruits in Thailand Tropical Fruits in Thailand

Grower

Contact farm/ Agreement

Export

Super- market in Local/ BKK Processing Local Market/ Collector

Wholesale Market

Consumer Retail Market

(Talaad Thai)

Wholesale Market / Market in regions Hotel / Restaurant / School Supermarket Flea Market Consumer Mobile Market (Pick- up truck) Export I mport

In Thai Culture: In Thai Culture: Mobile Van Mobile Van

(Pick (Pick-

• up Truck running around villages

up Truck running around villages for selling food & fruits) for selling food & fruits)

In Thai culture: In Thai culture: Bazaar Market Bazaar Market

Number of Wholesale Market Number of Wholesale Market (2007) (2007)

10 20 30 40 50 60 70

RICE & CROP 1 69 70 FRUIT & VEGETABLE W/S 4 19 23 FISH WHOLESALE MARKET 5 3 8 BKK PROVINCE TOTAL

he most complete and largest agricultural wholesale market

Establishment : November 12, 1995 Owner : Thai Agro Exchange Co.,Ltd. (TAECO) Land : 200 acres ( 80.92 hectors) Registered Capital : 2,000 Million Baht Value of Transaction : 400 – 600 Million baht / day Vehicle Flow : 30,000 / day

• No. of market

: > 20 markets

CALTEX A.I.T

Rangsit-Nakhon Nayok Rd. Don Meang Airport Phahoyothin Rd. Don Meang Tollway Eastern outer Ring road Klong Luang-inter change The Second Stage Express way Meang Thong Thani Sport Complex

Truck terminal U-turn

Bangkhan Nong Sua Rd. Phahoyothin Rd. Thammasat University Ragnsit Campus

F r

• m

S a r a b u r i From Ayudaya Western outer ring road U-turn

To To alaad alaad thai thai : : 15 15 Kilometres Kilometres from from Donmuang Donmuang Airport Airport 68 68 Kilometres Kilometres from from Suvarnabhumi Suvarnabhumi I nternational Airport I nternational Airport

T T

Lay Out of Lay Out of Talaad Talaad Thai Thai

Orange Market Land size 12,800 sq.m. Mixed Fruits Market Land size 12,800 sq.m. Seasonal Fruit Land size 40,000 sq.m. Market(Ground) Coconut Market Land size 11,200 sq.m. Water Melon Market Land size 10,000 sq.m. Farm Crops Market Land size 6,400 sq.m. Vegetable Market Land size 9,600 sq.m. Vegetable Ground Land size 20,000 sq.m. Fresh Food Market Land size 6,400 sq.m. Rice Market Land size 3,200 sq.m.

Fresh Water Fish Market (night) Land size 14,000 sq.m Fresh Water Fish Market (day) Land size 2,600 sq.m. Hygienic Meat Market Land size 800 sq.m. Pets Market Land size 800 sq.m. Plant Market Land size 4,800 sq.m. Flower Market Land size 1,300 sq.m. Assorted Market Land size 14,000 sq.m. Sweets market Land size 2,200 sq.m. Perishable One Stop Service Capacity 1,000 ton Export Center Cold Storage

Who are our customers? Who are our customers?

1.

• 1. Seller

Seller

• Collector

Collector

• Farmer/Grower

Farmer/Grower

2.

• 2. Buyer

Buyer

• Wholesale Market in Region

Wholesale Market in Region

• Retail Market in BKK & nearby

Retail Market in BKK & nearby

• Supermarket

Supermarket

• Hotel/Restaurant/School

Hotel/Restaurant/School

• Bazaar

Bazaar

• Pick

Pick-

• up truck

up truck

• Consumer

Consumer

What is our responsibility? What is our responsibility?

1) 1) Buyer

Buyer -

• Quality Product

Quality Product

• Traffic & Parking Control

Traffic & Parking Control 2) 2) Seller

Seller -

• Easy access to the market

Easy access to the market

• Convenient Facilities

Convenient Facilities

• Traffic & Parking Control

Traffic & Parking Control 3) 3) Farmer

Farmer -

• Fair Price

Fair Price

• Distribution Channel

Distribution Channel

• Increase farmers

Increase farmers’ ’ profit margin profit margin

• 6 lanes road with 30

6 lanes road with 30 metres metres wide wide

• Spacious parking lot

Spacious parking lot

• 24 hours security

24 hours security

• Waste Water System

Waste Water System

• 3 Food centers

3 Food centers

• Cold storage

Cold storage

• POSSEC

POSSEC (Perishable One Stop Service Export Center)

(Perishable One Stop Service Export Center)

• 8 commercial banks/ATM.

8 commercial banks/ATM.

• Transportation Service

Transportation Service

(Bus/ Taxi/ Rental Truck) (Bus/ Taxi/ Rental Truck)

• Trade Liberalization/FTA

Trade Liberalization/FTA

• Food Safety

Food Safety

• From farm to table

From farm to table

• GAP (Good Agricultural Practice)
• GMP (Good Manufacturing Practice)
• HACCP (Hazard Analysis Control Point)
• Kitchen of the World

Kitchen of the World

• Clean food good taste

Clean food good taste

• Healthy Market

Healthy Market

• Co

Co-

• operate with government policy
• perate with government policy
• Improve in

Improve in ‘ ‘healthy market healthy market’ ’ policy policy

• Provide training course / information

Provide training course / information to both farmers and vendors to both farmers and vendors

• Encourage the quality farmer groups

Encourage the quality farmer groups

• Quality control; Conduct product test

Quality control; Conduct product test by laboratory. by laboratory.

Before After

Fresh Food Market in Thailand Fresh Food Market in Thailand

The Definition The Definition ‘ ‘ Fresh Food Market Fresh Food Market’ ’ in Thailand in Thailand

Fresh food market is the food trading center for a

• community. I t is the traditional lifestyle of Thai people.

Most Thai people buy fruit and fresh meat for cooking

from the fresh food market.

Government encourages ‘ food safety’ policy to the fresh

food market

‘Healthy Market’ is a project of Ministry of Public Health

Model of Healthy Market Model of Healthy Market

How to reach standard of How to reach standard of “ “Healthy Market Healthy Market” ” There are 3 significant qualified requirements:

• Environmental health
• Food safety
• Consumer protection

“ “Impacts of Hypermarket on Impacts of Hypermarket on the suppliers of fresh produce the suppliers of fresh produce and its prices and its prices” ”

Researched by : Nipon Poapongsakorn (Faculty of Economic, Thammasat University and Thailand Development Research I nstitute) Dated: October, 2004

Number of Modern Trade Store (Branch)

• The significant increasing numbers of

hypermarket and convenient store.

20 40 60 80 100 120 140 1995 1996 1997 1998 1999 2000 2001 2003

Year Number Branch

500 1000 1500 2000 2500 3000 3500 4000 4500

Hypermarket + Makro Depart ment St ore Convenient St ore Supermarket

Modern trade trend

Convenment 12% Supermaket 8% Hypermaket 46% Dept Stores 34%

Convenment 5.6% Supermaket 8.1% Dept Stores 54.3% Hypermaket 32%

Market share Market share 1997 2001

Modern trade in Thailand 2006 Modern trade in Thailand 2006

245 89 56 49 29 24 50 100 150 200 250 300 L

• t

u s E x p r e s s T

• p

s T e s c

• L
• t

u s B i g C M a k r

• C

a r r e f

• u

r

Source: Matichon Newspaper (15 – 21 June 2007)

Changes in lifestyle: increase

in Number of cars, time cost, less frequency of shopping and convenience

Low price than grocery Easy to access

Factors of Hypermarket growth

Consumers pay less Consumers pay less

106.4 105.1 108.0 118.6 118.0 120.8 95.0 100.0 105.0 110.0 115.0 120.0 125.0

Toiletries Household goods Dry food

Product prices by category Hyper- maket

grocery Figure: product prices in hypermarket is cheaper than grocery stores.

Source: Research paper from Faculty of Economic, Thammasat University, 2004

Hypermarket & Fresh Market Hypermarket & Fresh Market

• Hypermarket has become the

most popular place for consumers to buy dry food, toiletries, and household goods, while most people still prefer to buy meat, fish, fruits and vegetable from the fresh market/ wholesale market.

Wet market Hyper market

M e a t F r u i t – V e g e t a b l e Dry Food T

• i

l e t r i e s Household Goods M e a t Fruit - Vegetable Dry Food T

• i

l e t r i e s Household Goods

Purchasing behavior by different product categories

Always Sometimes

Convenient stores Convenient stores & & grocer groceries ies

• Convenient stores &

grocery stores are the place for ready-to-eat food. But convenient stores have better location & well- known brand name.

Grocery Store Convenient Store

M e a t Fruit - Vegetable Dry Food T

• i

l e t r i e s Household Goods M e a t Fruit - Vegetable Dry Food Toiletries Household Goods

Always Sometimes

Purchasing behavior by different product categories

Shopping behavior of consumers Shopping behavior of consumers has changed has changed

Percent of Shoppers in 2002 Percent of Shoppers in 2002

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fresh Market Hyper Market

19% 41 % 17 % 23 % 40 % 6 % 12 % 42 % uncertain 5-7 times 3-4 times 1-2 times/week

• Consumers go to fresh market 3-4 times but

they go to hypermarket just 1-2 times/ week

Prices of fresh produce Prices of fresh produce

(100 : lowest price) (100 : lowest price)

117.2 106.5

100 102 104 106 108 110 112 114 116 118 Hyper Market Fresh Market

Why ? Why ?

Grading & Grading & quality ?? quality ??

Conclusion Conclusion

• Hypermarket has been the most

popular place for dry food and consumer products.

• Fresh market and wholesale market

are still the most popular for fresh products.

• Convenient stores and grocery stores

are the places for ready-to-eat food.

Conclusion Conclusion

• Even though supermarket has been less popular,

three high-end supermarkets (Tops, Home Fresh Mart, Gourmet) have begun to procure directly from farmer groups, in order to receive ‘high quality’ products (sizing, grading and weight). All the products from farms are controlled QC inspection in DC.

• Farmers are trained for product grading. At the

moment the number of farmers has increased because of obtaining higher price than hypermarket.

Conclusion Conclusion

• For the purchasing method of

hypermarket, it buys from a large number of large and reliable suppliers. The purchasing price is the lowest price, offered by the competing suppliers (approximate 10 suppliers for fresh fruit).

Conclusion Conclusion

What is happening with the players in Thailand Players Trend

• Grower

More consolidation and contract farming

• Wholesale market

Stable, no significant change

• Fresh food market

Decrease in number

• Bazaar/ Mobile Van

Increase in number, more popularity

• Hypermarket

Offer more fresh food in low price

• Supermarket

Offer more premuim products

• Foodservice

More popularity-Thai consumer prefer to (restuarants/hotel) eat outside or “ready-to-eat” product

To To enter enter international marke international market t / / new market new market

• Producer should try to improve production

Producer should try to improve production and quality control and quality control, , in order to increase in order to increase competitiveness in internationnal market competitiveness in internationnal market, ,

• r to meet the customer needs
• r to meet the customer needs.

.

• Obtain more market information to better

Obtain more market information to better meet consumer needs & meet consumer needs & gerenate gerenate sale sale volume. volume.

Thank You Thank You