Two leading snack brands, Tao Kae Noi and Glico, have joined forces to create co-branded products and spur consumer spending after the Thai snack industry grew at a slow pace in the first nine months this year.
Itthipat Peeradechapan, chief executive of Taokaenoi Food & Marketing Plc, the maker of Tao Kae Noi seaweed snacks, said snack consumption has declined over the past few years and the market grew by 2-3% in the first nine months.
Falling consumption stemmed from internal factors such as the economic slowdown and snack makers' failure to launch innovative products to stimulate demand, he said.
Thailand's snack market was worth 31.82 billion baht last year. For this year, the seaweed segment grew by 2-3% in the first three quarters as the biscuit segment rose 3.8%.
"This year's overall snack consumption is improving from last year and we hope the market will resume double-digit growth next year," Mr Itthipat said.
Sales of Tao Kae Noi seaweed and Glico biscuits in the first nine months outpaced the snack industry's growth.
To stimulate consumer spending this year, the two collaborated to create Pretz Tao Kae Noi nori seaweed, which launched yesterday.
Last year Glico controlled a 20% market share in Thailand's 11-billion-baht biscuit market while Tao Kae Noi commanded a 61% share in the seaweed snack market worth 3 billion baht.
Kritsada Nurakkhe, deputy general manager for domestic sales at Thai Glico Co, the local subsidiary of the Japanese biscuit maker, said it marks the first time in 40 years Glico in Thailand partnered with another local snack brand.
"In addition to a new snack product the partnership allows us to learn about the corporate culture of an international brand," Mr Itthipat said.
Under the cooperation, Thai Glico handles the distribution of Pretz Tao Kae Noi nori seaweed in modern trade channels while Tao Kae Noi is in charge of sales via traditional retail shops and at its own Tao Kae Noi Land shops nationwide.
Initially the partnership is for the domestic market, but the possibility to reach overseas exists in the long term. Glico products produced here are exported to eight countries in Asean while Tao Kae Noi products are available in over 40 countries.
"The partnership with a recognised brand like Glico may help Tao Kae Noi to become a global snack brand one day," Mr Itthipat said.
Both expect sales of Pretz Tao Kae Noi nori seaweed to reach 32 million baht in the first three months of market distribution.
Taokaenoi Food & Marketing is set to grow its sales by 25% to over 4 billion baht this year. Of the total, about 45% is from the domestic market, with the remaining 55% from exports.
Mr Kritsada said sales of Glico biscuits in the first nine months this year grew 12% to over 2 billion baht, three times higher than industry growth.