Most food products enjoyed continued sales growth, while categories like snack bars and ready meals recorded a jump in sales, reveals a new report.

Sales of snack bars rose by 12.6 per cent during the year in value terms, while ready meals increased by 8.9 per cent, according to the Euromonitor report.

These products are being boosted by the shift to a modern lifestyle and resulting demands for convenience.

The amount spent on all packaged foods increased by 6 per cent during 2005, to BT197 billion (€4 billion).

"The economic downturn has not caused any real harm to packaged food due to necessary consumption," noted the report's authors.

Chocolate confectionery, soup and spreads were among the few categories to suffer from the economic slump that followed the tsunami in December 2004.

Growth in these areas was significantly slower during 2005 than the prior year. Soup actually declined by 1 per cent over the 12 months. But chocolate confectionery is expected to pick up in coming years with increased presence of international brands.

And overall, the economic difficulties of 2005 were largely beneficial to the food industry, suggests the report, published in April.

After diesel prices were floated in early 2005, Thai consumers anticipated rapid inflation and stocked up on packaged food ahead of price rises.

Retailers, and some manufacturers like the Saha group, fuelled greater demand by running promotional price campaigns in order to encourage sales ahead of the planned price increases during the second half of 2005.

"This has resulted in positive growth in packaged food in almost every sector in 2005," says Euromonitor.

Around 52,000 litres of ice cream were sold during 2005, a 5.5 per cent increase on the prior year, and 152,000 tonnes of bakery products were consumed, a 6 per cent rise compared with 2004.

The volume of oils and fats sold during 2005 increased by 9.3 per cent to reach 238,000 tonnes.

Pricing is playing a bigger role in the Thai food market however, as consumers affected by the reduction in tourism become more price-sensitive. They increasingly choose to shop at discounter outlets and hypermarkets, and private label products have achieved the highest ever penetration rate, says the report.

Nevertheless the analysts predict sustained strong growth in packaged food, and particularly in ready meals, as busy urbanites seek easy solutions to meals.

By 2010, the country will consume nearly 14,000 tonnes of ready meals, forecasts Euromonitor, a 54 per cent increase on last year's consumption, while value will increase by 62 per cent to reach BT 2.4 billion.

Frozen processed food will also increase significantly - around 42 per cent in value terms - and 33 per cent in volume to reach 41,000 tonnes by 2010.

Snack bars, still a very niche product, will be the star performer however, as Thai women become more weight-conscious. The category is expected to achieve a compound annual growth rate of 11 per cent up to 2010, when the market will consume 500 tonnes.

Products perceived as healthy can also compete on their image rather than pricing, allowing manufacturers to target consumers that are less price-sensitive or those who choose to cut down on indulgent food in favour of healthy food.

Functional foods, especially functional gum, are already performing well, as are low-fat and sugar-free products.