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Published on August 19, 2007

For Viwat Limsakdakul, the managing director of Tipco Foods (Thailand), healthiness is a rapidly growing business in Thailand and abroad in which opportunities abound.

"Globally as well as locally, people tend to be more health-conscious. Their eating habits and what they eat and drink are changing as they wish to live longer than the previous generation. They also have more income to dispose [of] and take care of their health.

"For instance, many prefer to take less or no sugar in beverages. As a result, the sales of carbonated cola drinks here and abroad have been on the downtrend for years whereas natural fruit juices, functional and sport drinks as well as bottled water are enjoying double-digit growth rates," says Viwat, whose firm aims to be a leading food company in Southeast Asia.

Tipco, which is short for Thai Pineapple Co, started its business three decades ago as a canned-pineapple exporter and is part of a business empire which also includes asphalt production, construction and logistics.

Today, Tipco's Bt3.7-billion-a-year sales turnover is nearly equally split between export and domestic markets, with Tipco being the major brand for natural ready-to-drink fruit juices.

Currently, Tipco claims to have a 50-per-cent share of the country's fresh-fruit-juice market, as its products are known to have a unique taste because they are made from fresh fruits, not from concentrates. In the bottled-water market, the firm uses the "Aura" brand for spring mineral water bottled at the plant in Chiang Mai.

"We've also branched into the out-of-home market by opening fresh-fruit-juice bars and by providing catering services. Another nutritional innovation is "Nature Up", which is a new ready-to-drink cereal made from a combination of soy, brown rice and corn.

"At present, 99 per cent of our pineapple business is from exports. It's mainly a commodity business since we manufacture for foreign buyers who will use their own brand names. That's our original business. Plantation yields, costs and quality of service are key factors of competitiveness," says Viwat. He helped turn around Tipco Foods in 1998 when the firm suffered a huge Bt1.5-billion foreign-exchange loss on overseas loans when Thailand sharply devalued the baht. Over the past decade, annual sales have more than tripled from about Bt1 billion to Bt3.7 billion.

Recently, the company acquired a 6,000-rai herbal plantation in Prachuap Khiri Khan that could be turned into pineapple plantations. Its source pineapples have usually come from nearby contracted farms. Some canneries have also turned to supply chains in neighbouring countries such as Laos and Cambodia where wages are lower so that they can be more competitive in the global market.

"In the ready-to-drink business for which we use the Tipco and related brands, 95 per cent of sales is generated domestically and the Thai market still has plenty of room to grow since fruit-juice consumption per capita is just three litres per year for Thais compared to about 30 litres and 20 litres in the US and Japan, respectively.

"We also hope to further boost the export ratio of ready-to-drink products, especially to Asean markets, which currently account for 30 per cent of shipments," says Viwat, 51, who holds an MBA from Oklahoma State University and two finance and marketing degrees from Assumption University.

"In my opinion, the bottled-water market will likely enjoy the highest growth rate in coming years due to several factors. First, more and more sources of surface water are found to have been contaminated. Second, tap water is becoming less hygienic due to ageing pipes. Third, mineral water is healthier than other drinks. In addition, the market for functional food products

such as cereal drinks or sport drinks with natural ingredients will grow fast in coming years," he says.

Nophakhun Limsamarnphun

nop1122@yahoo.com