In 2018, the total global market value of the Food and Beverages (“F&B”) market stood at US$95.7bn, expected to reach US$126.4bn by 2023, representing a CAGR of 5.72%[1]. Comparing across regions, Asia Pacific (“APAC”) posts the highest growth in terms of consumer spending on eating out, forecasted to beat worldwide CAGR, with its own annual growth rate of 10.1%. In turn, this translates to a total serviceable market of US$76.3bn solely in Asia by 2023[2]. Within APAC, Thailand has historically been one of the strongest contenders in terms of market competitiveness. While Thailand lags behind China, India and Japan due to being less populous, the Foreign Direct Investments (“FDI”) poured into her F&B sector more than compensates for it. Strong investor confidence and interest in Thailand’s F&B sector is evidenced by influx of over US$1.6bn from January 2015 to December 2018[3]. Despite this, the Thai government continues to attract investments through a series of tax incentives and structuring its visa framework to make it more convenient for expatriates through its new economic model known as ‘Thailand 4.0’[4]. In terms of F&B markets, Thailand is currently ranked 9th globally, and is expected to maintain over 5% annual growth to claim 6th place worldwide by 2026[5]. More granularly, the F&B sector in Thailand has 12.5 million active paying customers, with a penetration rate of 18.0%. The average revenue per user is US$24.96, with the largest consumer group hailing from those aged 25-34[6]. Key F&B Drivers Embedded in Thailand’s local identity is its strong food culture which has percolated the various nooks and crannies of her society. The first tenet of strong F&B growth is high urbanization – mostly concentrated around Bangkok and its surrounding areas[7]. A corollary of urbanization is its rapidly rising per capita disposable income to over THB120,000[8] contributed to an increased frequency of Thais eating out. On average, Thais eat out 56 times a month and consumer coffee or tea 8 times a month[9]. As consumers become more affluent, we observe a commensurate increase in their preference for convenience, hygiene and high-quality standards[10]. A second driver is Thailand’s high and growing mobile phone, social media, and internet penetration. The proportion of active social media users as a percentage of total population is 74% while the average daily time spent using social media on any device is 191 minutes[11]. Being increasingly exposed to experiences of friends and family, as well as information about international wonders culminated in the Thais’ growing interest for tasting foreign food. F&B Trends Moving Forward Apart from the industry trends highlighted above, there are other potential forces that will shape the F&B sector in the future. Thailand’s premium retail coffee market has been fast-growing. Recent M&A activities like Fraser and Neave’s acquisition of Starbucks Thailand coffee chain are testaments to this[12]. Specific to beverages, coffee and tea flavors have significantly risen. Industry leaders like Coca-Cola sought to capitalize through their launch of Coca-Cola Coffee Plus[13]. There is higher demand for packaged foods and variegated products, which require improved and complex process management. Companies recognize this and are shifting their focus to streamlining their supply chains and leaning out their operations. Apart from making them more cost efficient and competitive, doing so allows them to capitalize on increasing consumer cognizance regarding environment sustainability[14].   A Closer Look at Company KIN Companies that are able to leverage on industry trends instead of being quashed by competition are often best positioned to capture the ballooning market share. One such company is KIN – a leading F&B player which owns and operates highly acclaimed F&B brands in Bangkok. Most saliently, the opening of theCOMMONS, the first lifestyle and community space in the heart of Bangkok. Catered by a carefully curated selection of 32 artisanal tenants, KIN established a significant first-mover advantage in tapping on the abovementioned trends which are key drivers within the F&B sector. Owing to the larger common areas which endow tenants with a wider customer reach, KIN is able to achieve above market lease rates even with just 40% leasable area in one of the most expensive rental markets in the country. This tenant model gives investors exposure not just to KIN’s F&B assets, but also a stake in lifestyle retail space in Bangkok. Beyond its current endeavors, Company KIN is looking to expand through joint ventures, pushing its valuation northwards by an aggregated US$145mn. These include their foray into Thailand’s ready-to-drink coffee market under its brand ‘Roots’, reinvestments to ensure a reliable and bolstered supply chain, and partnerships with Thailand’s leading real estate developers. To glean insights from a detailed deck, click here to learn more about Company KIN.   [1] Neo, Pearly. “‘Go-to Region’ for Food Firms: Asia Pacific to See Fastest F&B Market Growth to 2030.” Foodnavigator. March 25, 2019. Accessed June 19, 2019. https://www.foodnavigator-asia.com/Article/2019/03/25/Go-to-region-for-food-firms-Asia-Pacific-to-see-fastest-F-B-market-growth-to-2030. [2] “Food & Beverages – Asia | Statista Market Forecast.” Statista. Accessed June 19, 2019. https://www.statista.com/outlook/253/101/food-beverages/asia#market-globalRevenue. [3] Koe, Tingmin. “More than US$1bn Invested in Thailand’s Food and Beverage Industry in the past Four Years.” Foodnavigator. February 19, 2019. Accessed June 19, 2019. https://www.foodnavigator-asia.com/Article/2019/02/19/More-than-US-1bn-invested-in-Thailand-s-food-and-beverage-industry-in-the-past-four-years. [4] “Tax Incentives in Asia-Pacific – Thailand.” EY. Accessed June 19, 2019. https://www.ey.com/sg/en/services/tax/ey-tax-incentives-in-asia-pacific-thailand. [5] Yates, Darren. “THE GLOBAL FOOD & BEVERAGE MARKET.” What’s on the Menu? April 2017. Accessed June 19, 2019. [6] “Food & Beverages – Thailand | Statista Market Forecast.” Statista. Accessed June 19, 2019. https://www.statista.com/outlook/253/126/food-beverages/thailand. [7] “Urbanization in Thailand Is Dominated by the Bangkok Urban Area.” January 26, 2015. Accessed June 19, 2019. https://www.worldbank.org/en/news/feature/2015/01/26/urbanization-in-thailand-is-dominated-by-the-bangkok-urban-area. [8] Ratanacharoenpornchai, Chatchawan. “Thailand’s Macroeconomic Chart Pack.” June 2019. Accessed June 19, 2019. https://www.bot.or.th/Thai/Statistics/Graph/Chart_Pack/Chart Pack.pdf. [9] “4 Outstanding Trends among Thais and Their “Eating-Out Habits” Are Not the Same Anymore.” October 21, 2017. Accessed June 19, 2019. https://siamscope.com/4-outstanding-trends-among-thais-eating-habits-not-anymore/. [10] “The Quest For Convenience.” 2018. Accessed June 19, 2019. https://www.nielsen.com/content/dam/nielsenglobal/ua/docs/the-quest-for-convenience.pdf. [11] Nguansuk, Suchit Leesa. “Thailand Tops Global Digital Rankings.” Bangkok Post. February 19, 2019. Accessed June 19, 2019. https://www.bangkokpost.com/business/news/1631402/thailand-tops-global-digital-rankings. [12] Tan, Sue-Ann. “F&N Buys Starbucks Thailand in Bid for Greater Regional Presence.” May 23, 2019. Accessed June 19, 2019. https://www.straitstimes.com/business/companies-markets/fn-buys-starbucks-thailand-in-bid-for-greater-regional-presence. [13] Arthur, Rachel. “Coca-Cola & Costa Launch RTD Coffee.” Beverage Daily. June 12, 2019. Accessed June 19, 2019. https://www.beveragedaily.com/Article/2019/06/12/Coca-Cola-and-Costa-launch-RTD-coffee. [14] “Food & Beverage Trends To Watch In 2019.” February 14, 2019. Accessed June 19, 2019. https://www.cbinsights.com/research/food-beverage-trends-2019/.

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