Manufacturing the food of the future in Thailand

Thailand's agricultural and food industry has continually incorporated new innovations to meet the increasingly sophisticated demands of a global market that is overwhelmed by virtually endless options.

Staying ahead in this extremely competitive environment requires access to a wide variety of raw materials from vast agricultural plantations and a well-developed supply chain.

Leveraging advances in digitalization and utilizing deep technologies such as 3D printing, AI, and big data, Thailand's food industry is also producing food that aligns with consumer intelligence technology while addressing environmental concerns.

Indeed, accelerating consumer demand for innovative foods such as alternative proteins, medical foods, functional foods, and 3D food printing has created an unprecedented shift in the Thai food industry, with the recent emergence of aspiring startups.

With an eye on global trends and technology, these startups are playing a key role in building consumer awareness of Thai food brands.

Thailand's food development sector also prioritizes progress with a greater emphasis on safety standards and transparency at every stage of production.

Notably, the Thai government recently launched a blockchain system that serves as a portal for consumers to trace and track every process.

In the global market, Thai agribusiness entrepreneurs showcased their strengths with strong exports in 2020, even as global demand slumped in light of the pandemic.

As consumers sought quality food products with a long shelf life during periods of restricted outdoor activity, Thai frozen and processed fruits and vegetables, beans, and powdered soups proved popular, making them among the products that held up in the global market.

Food for future development

The global popularity of Thai tourism and culture, as well as the quality of its food and agricultural products, have contributed to the uniqueness and quality of "made-in-Thailand" products on the global market.

With a skilled workforce and an agricultural sector rooted in a culture deeply rooted in agricultural wisdom and well-established supply chains, Thailand has successfully developed its food industry to become the world's 11th largest food exporter in 2019, second only to China in Asia.

See also: Close-up on agriculture in Thailand

The Thai government is currently implementing a medium-term plan to broadly develop the Thai food industry, with the aim of adding economic value to local food and agricultural products for local economic development, as well as establishing Thailand among the world's ten largest food exporters.

Thailand's effort will also help fulfill its role in helping to address food insecurity in some countries, as exposed by the Covid-19 pandemic.

Thailand's vibrant food industry accounts for a quarter of the country's industrial gross domestic product and uses more than four-fifths of local raw materials for its production.

The strength of the people and the country's endowment of vast agricultural plantations, the diversity of agricultural products, a well-established agri-food industry and a geographical location at the center of the ASEAN region have underlined Thailand's strong position in the global food supply chain.

The Thai government has identified 'food of the future' as an industry that will become a key economic driver, as the combination of a passionate new generation of food producers, digitalization, and food technology has elevated Thailand's position to a global level in this exciting new industry.

The government's food development plan focuses on four areas:

• training new entrepreneurs,
• scaling up innovations,
• the use of online marketing platforms,
• improving the ease of doing business.

Government agencies are supporting Thai farmers by encouraging their adoption of agri-technology, such as automation and robotics, AI (artificial intelligence), IoT (Internet of Things), and plant factories, to increase their productivity and overcome challenges such as weather uncertainty and high operating costs.

The Thai government's policy of streamlining its digital databases and the operations of all its agencies, in accordance with a law enacted in 2019, will further strengthen Thailand's position as one of the most promising locations for food industry investment.

Coaching Food Warriors

The Thai government aims to position Thailand as a key global player in the "food of the future" market, a type of food that is both functional and novel, often involving technology-based production processes and services.

As the food industry can be driven by ideas on which – with the right mentors and investments – a plausible business model can be built, Thailand has seen the development of many new local entrepreneurs launching food innovations that utilize the latest food and agribusiness technologies in start-ups that meet multiple consumer demands.

“SPACE-F”, Thailand’s first food technology startup incubator and accelerator, is launching the second batch of acceleration.

Managed by the National Innovation Agency, Mahidol University, and Thai multinational food conglomerates, SPACE-F aims to serve as a platform where promising entrepreneurs can receive mentorship and guidance from corporations, venture capital firms, corporate venture capital firms, and agencies that will empower them to scale their food technology startups for global success.

Since the program began in 2019, four food tech startups, out of a total of 34 participants, have received funding to scale their businesses.

Local innovations showcased at SPACE-F include sesame milk, duckweed protein, cricket protein, a biodegradable fruit coating solution, and a sensor system for quality control in food production.

Duckweed protein. Photo: wur.nl

Reflecting their interest in food tech startups, local food multinationals have also partnered with seed funds to invest in food tech startups around the world.

BOI promotes agri-food technologies

The Thailand Board of Investment (BOI) has introduced tax incentives throughout the supply chain for agribusinesses, with a focus on technology in the form of productivity improvements, agro-technology, high-tech quality testing, factories, and sustainability certification.

Incentives offered include:

• an exemption from corporate tax for 8 years for the manufacture of medical foods and food supplements
• An 8-year corporate income tax exemption for the adoption of advanced technologies such as fruit ripeness sensors, radio frequency pest control and nuclear magnetic resonance for grading, packaging and storage of plants, vegetables, fruits or flowers.
• an exemption from income tax for 8 years for the manufacture of biomolecules and bioactive substances using microorganisms, plant cells or animal cells.
• an 8-year corporate tax exemption for the seed industry and the improvement of plant, animal or micro-organism reproduction using biotechnology.
• a 5-year exemption from corporation tax for the manufacture of oil or fat from plants or animals (except soybeans).
• a 5-year corporate income tax exemption for the manufacture of food ingredients, beverages and seasonings, except alcoholic beverages, caffeinated beverages, bakery products and candy.
• a 5-year corporate tax exemption for the adoption of smart farming systems such as the use of sensors, drones or greenhouses.
• a 5-year corporate income tax exemption for investments in plant production plants.
• a 5-year corporate tax exemption for the manufacture of animal feed that complies with food safety standards such as ISO 22000.

Source: Bangkok Post