PostharvestS Institute for Perishables MARKETIG SURVEY OF THAI PROCESSED FRUITS AND VEGETABLES (0) by Harvey C. Neese and Donald S. Leeper Agri-Food Systems International, Inc. for tkle Postharvest Institute -.r Perishables GTS Report No. PIP/Thailand/Nov. 82/No. 14 May, 1983 Ain cooperation with UniversityofIdaho United States Agency for International Development Project Title: Storage and Fiocessing of Fruits and Vegetables ProjEct No. AID/DSAN-CA-0265 Wzhirgton, D.C., U.S.A. 20523 HARKETING SURVEY OF THAI PROCESSED FRUITS AND VEGETABLES by Harvey C. Neese and Donald S. Leeper Agri-Food Systems International, Inc. for the Postharvest Institute for Perishables Report No. PIP/Thailand/Nov 82/No. 14 (GTS 82-1C) May, 1983 TABLE OF CONTENTS PAGE I. EXECUTIVE SUMMARY...................... ...4 0........ .. .............. 1 H o. INTRODUCTION,........ .o.. ..... .... .......... ......... o.... 0 III. MARKETS AND MARKETING... .... ... ... ......... ..... .... ........ .. 14 A. Approach Utilized in Study............. ... .... .......... ... ..14 1. Co mm o d i t i es .. o... .. .14 2. Forms of processing... ....... ............ 14 3. Marketi ng channel s .................. ..... ................. 14 4. Different markets for a commodity within a country......... 15 5. Differences between countries.... ......... ...... ....... :15 B. Thailand: Fruit and Vegetable Industry ........................ 16 C. U.S. Market Development Potential............... 26 1. In troduc tio n . .. .... .. ..o.. .. ... .... .... .. .. .. ... ... .. ..26 2. Study commodities with little development potential ........ 30 3. Study commodities with substantial development potential...32 a) Tropical fruit purees: guava, mango, papaya .......... 32 b) Dried tropical fruits: papayas, pineapples ... o.......37 c) Canned asparagus: white and green...............o...41 d) Gourmet/ethnic specialties: water chestnuts, bamboo shoots, baby corn ...... ...... ..... ........48 4. Developing the U.S. Market... .... .............. ...... .57 D. Japanese Market Development Potential ..... -........ .... 60 1. Introducti on ........ ............... o6.. .Uoo o . .o ­ a) Source of processed products... ...... b) Marketing channel s ....... ...... 61 2. Study commodities with little development potential........69 3. Study commodi ties with substantial development potential ... 70 a) Bamboo shoots, dried and canned......-.............70 b) Mixed fruit; fruit salad and fruit cocktail...........71 c ) Baby co rn ............... oo. ..... .. .. .......... o72 4. Developing the Japanese Market..................o ........ 73 E. Singapore Market Development Potential 1. Introduction ............. ..... ...... .. .. ....... 74 2. Study commodities with little development potential ........ 75 3. Study commodities with substantial development potential ...77 a) Canned lichees ....... o. .............. o............. 77 b) Canned 1ongans . .. .- . ............ oo .. .. ... 78 c) Bamboo shoots, dried and canned.......... ...... o..7 d) Canned straw mushrooms ...... ........... o . ...... 80 e)f) MangoCashews ......p......... ......... .. ........................... .8 ... 4. Developing the Singapore Market............ o............... 8 TABLE OF CONTENTS (Continued) PAGE F. Hong Kong Market Development Potential ........................ 84 1. Introduction .............................................. 84 2. Study commodities with little development potential . ... 85 3. Study commodities with substantiai development potential..86 a) Baby corn ....................... ....................86 c)b) AsparagusCanned bamboo ............ shoots ............................................. ................... ... 8787 d) Cashews .. ............................. 87 4. Developing the Hong Kong Marke..........................t 88 G. Summary: Market Development Opportunities...................89 a) Study commodities in four markets investigated ............ 89 b) Other opportunities ....................................... 90 IV. RECOMMENDATIONS FOR INTEGRATED MARKET DEVELOPMENT PROGRAM .......... 92 V. APPENDIX .. ... ... ... ... ... ........ 99 A. FDA Food Canning Establishment and Process Filing for Still Retort Process ................................................ l00 B. Typical Specifications for the U.S. Market - Guava, Papaya, Mango Purees for Nectars ...................................... 101 C. U.S. Standards for Canned Asparagus, White and All-Green ...... 103 D. Domestic Output, Imports, Exports and Domestic Distributing Volume of Vegetables and Vegetable Products (Japan) ........... 107 VI. PERSONS AND ORGANIZATIONS CONTACTED ............................... 111 VII. BIBLIOGRAPHY ...................................................... 114 TABLES PAGE TABLE NO'S by Regions, 1 1978/1Fruit 979Production ............................ in Thailand .............. 22 2 Export Performance of Some Fresh Fruits, 1978/1 979.. (Thailand)............................... 23 Study Commodities 3 1981/1982..Exports of Selected(Thailand) Processed ............................... 24 4 Processing Capacity for Selected Canned Fruits in Thailand, 1979/180..(Thailand).................. 25 5 Processing Capacity for Selected Canned Vegetables in Thailand, 1979/1980..(Thailand).................. 26 Fruit Purees Imported 6 fromU.S. ThailTariffs and on....................................... Tropical 34 7 U.S. Tariffs on Dried Papayas, Pineapples, and Mangoes from Thailand ............................... 39 Production in Principal Producing 8 Countries,Canned Asparagus 1981 ............... ....... ..... 42 9 U.S. Tariffs on Processed Asparagus from Thailand...43 10 U.S. Asparagus Production ........................... 45 Chestnuts from 11 ThailU.S. andTariffs ............................................ on Processed Water 51 Bamboo Shoots from 12 ThailIandU.S. Tariffs ............................................ on Processed 54 56 13 U.S. Tariffs on Baby Corn from Thailand ............. Vegetable Products in 14 JapanConsumption............................................... of Processed 60 15 Distribution Channels for Imported Processed Fruits and Vegetables.. (Japan) ........................ ..... 62 64 16 Tariff on Major Canned Fruits..(Japan).............. 17 Tariff on Fresh/Dried Fruits and Nuts..(Japan) ...... 65 67 18 Tariff on Fresh and Processed Vegetables..(Japan)... 19 Fruits and Vegetables Subject to Import Quotas in Japan, March, 1982 ...... ....................... ..... 68 I. EXECUTIVE SUMMARY The objective of the study was to investigate and assess the export market development potential for 14 selected processed fruits and vegetables produced in Thailand and marketed to four countries: the United States, Japan, Hong Kong, and Singapore. Two additional commodities were investigated, primarily in the U.S. Pineapples were not included since there is already a well-established export industry. The U.S. market potential was of primary interest. Forms of processing considered were canned/bottled, frozen, dried, juiced and pickled. Consumer, institutional and manufacturing markets were investigated. The initial phase of the study involved current demand for the study commodities in each of the four target countries, assessment of competitive considerations and selection of those commodities offering substantial development opportunities for Thai firms. In the second phase, marketing channels for the products, import and market factors and pricing for the selected commodities were investigated. Prospective, interested purchasers were identified and their requirements defined. The last phase entailed recommendations for an integrated, export market development program. This study was conceived as a first step in the establishment of an effective export program for processed commodities. Its scope was limited to identification of opportunities and market requirements. To capitalize on market oppcrtunities, Thai processors/exporters will have to supply commodities that satisfy buyer requirements on a reliable, competitive basis. Adequate raw products of most fruits and vegetables for processing is a major problem in Thailand. A reliable supply of quality commodities for processing will need to be established. These two important elements of the export system will have to be addressed in order to have an effective development program. An independent investigation of Thai production and processing capabilities was beyond the scope of the study. However prior work by Agri- Food Systems in Thailand, a review of available relevant studies and statistics and a limited number of interviews of Thai processors/exporters 1 indicated that all commodities selected for consideration are produced and processed in Thailand to some degree. Some commodities may be difficult to produce in sufficient quality and quantities needed for a viable export market, In each of the markets being investigated, available studies, import and other statistical data were analyzed. Primary eiphasis in performatice of the study was on securing the advice and opinions of individuals and organizations directly involved in importing, distributing and marketing of. the commodities. U.S. Market. Principal marketing channels for Thai processors/exporters are general or specialized importers/wholesalers serving consumer or institutional markets, national supermarket chains and manufacturers. Consulted during the course of the study were supermarket chains with over 5,000 stores, 14 importers/wholesale -s serving consumer markets and aix serving the institutional