Southeast Asia’s food manufacturing sector is worth an estimated $667 billion (2023). But which country should you source from?
If you are a European food company looking for contract manufacturers, ingredient suppliers, or OEM partners in ASEAN, the answer depends on what you are making, who you are selling to, and how much compliance risk you can manage.
This article compares Thailand, Vietnam, and Indonesia across the dimensions that matter most to international buyers: cost, quality infrastructure, certifications, EU export readiness, and category strengths.
Why ASEAN Is Attracting European Food Buyers
The EU imported EUR 16.3 billion worth of agricultural products from ASEAN in 2024. That number is growing by roughly 10% per year.
Three forces are driving European food companies toward Southeast Asia:
- Cost pressure — Raw material and labor costs in ASEAN remain a fraction of European levels
- China+1 diversification — Supply chain risk management is pushing buyers to develop alternative sourcing regions
- FTA access — The EU-Vietnam Free Trade Agreement (EVFTA), in force since August 2020, eliminates 99% of bilateral tariffs. No comparable agreement exists with Thailand or Indonesia yet
ASEAN’s food manufacturing is concentrated in three countries that account for over 85% of regional output. Each has distinct strengths.
Thailand: The Mature “Kitchen of the World”
Thailand exported $52.2 billion in agricultural and agro-industrial products in 2024, ranking as the world’s 12th largest food exporter. Its food manufacturing infrastructure is the most developed in ASEAN.
Strengths
Thailand’s nickname “Kitchen of the World” is not marketing. It reflects decades of investment in food processing infrastructure.
- Seafood processing hub — Home to Thai Union Group (FY2024 revenue: THB 138.4 billion / ~$4 billion), the world’s largest canned tuna producer. CP Foods (THB 580.7 billion / ~$17.8 billion revenue) dominates poultry and shrimp
- Halal food exports — Thailand exported approximately $7.1 billion in food to OIC (Organisation of Islamic Cooperation) countries in 2024. Over 14,000 companies and 160,000 products hold halal certification from CICOT (Central Islamic Council of Thailand)
- EU export track record — EU agri-food imports from Thailand were approximately EUR 2.1 billion in 2024. Thai factories routinely hold BRC, IFS, and FSSC 22000 certifications required by European retailers
- BOI incentives — The Board of Investment offers up to 8 years of corporate income tax exemption for promoted food manufacturing projects, plus import duty exemptions on machinery and raw materials. 100% foreign ownership is permitted
Weaknesses
- Rising labor costs — Bangkok-area minimum wage is THB 353/day (
$10). Manufacturing wages average THB 14,531/month ($410). This is 2x Vietnam’s level - Aging workforce — Thailand became a “fully aged society” in 2024. Working-age population share is projected to decline from 71% to 56% by 2060
- No EU FTA — Unlike Vietnam, Thailand has no free trade agreement with the EU. This means standard EU tariff rates apply to Thai food exports
Best For
Seafood processing, ready-to-eat meals, sauces and condiments, halal food, snack manufacturing, pet food OEM. Thailand is the right choice when quality assurance and certification infrastructure matter more than cost.
Vietnam: The Rising Cost Leader with EU Market Access
Vietnam’s agricultural exports reached $62.4 billion in 2024 (+18.5% year-over-year), with the EU accounting for approximately $7.5 billion. The EVFTA gives Vietnam a structural tariff advantage over Thailand and Indonesia for EU-bound exports.
Strengths
Vietnam’s food manufacturing sector has grown rapidly, driven by low costs and the EU free trade agreement.
- EVFTA tariff advantage — The agreement eliminates 99% of all tariffs between Vietnam and the EU. In its first five years, bilateral trade reached nearly $300 billion. H1 2024 exports to the EU were $24.7 billion (+15.4% YoY)
- World-leading commodity exports — Vietnam is the world’s #2 coffee exporter (FY2024: $5.62 billion, producing over 40% of global robusta), and the #1 cashew nut exporter for 18 consecutive years (2024: 730,000 metric tons, $4.37 billion)
- Labor cost advantage — Minimum wage ranges from $138-198/month depending on region, roughly half of Thailand’s level. Manufacturing labor costs are approximately $3/hour
- Young workforce — Median age of 31, with a growing manufacturing labor pool
Weaknesses
- Quality compliance gaps — In 2024, the EU flagged 61 food safety violations from Vietnam (up 60% from 38 in 2023). Over 130 EU export warnings were issued in the recent period
- Cold chain limitations — Only 30% of required cold storage facilities are in place. Most are concentrated in the south (Ho Chi Minh City area). Food losses: fruits/vegetables ~32%, meat ~14%, seafood ~12%
- Certification lag — HACCP and ISO 22000 adoption is lower than Thailand, particularly among smaller producers. BRC/IFS-certified facilities are concentrated among export-oriented factories
- Employer costs — Social security contributions are ASEAN’s highest at 22.5% of gross wages, partially offsetting the low base wage
Best For
Coffee, cashew nuts, tropical fruits, aquaculture (pangasius, shrimp), basic food ingredients. Vietnam is the right choice when cost is the primary driver and the product is destined for the EU market (to leverage EVFTA tariff advantages).
Indonesia: The Largest Domestic Market with Halal Mandate
Indonesia’s food manufacturing value added is approximately $44.8 billion (2021), making it ASEAN’s largest food manufacturing economy. Its 275 million population and mandatory halal certification create both opportunity and complexity for foreign buyers.
Strengths
Indonesia’s sheer market size makes it impossible to ignore for food companies with regional ambitions.
- 275 million consumers — The world’s 4th most populous country and largest Muslim-majority nation (231 million Muslims, 86.7% of population)
- Mandatory halal market — Indonesia’s halal food market is projected to reach $258 billion by 2030 (CAGR 6.78%). All food products sold domestically must be halal-certified by BPJPH by October 2026
- Palm oil dominance — World’s largest palm oil producer, providing a cost advantage for any food product that uses vegetable oil as an ingredient
- Liberalized foreign investment — The 2021 Positive Investment List opened over 200 sectors (including food manufacturing) to 100% foreign ownership via PT PMA
Weaknesses
- Logistics costs — At 23-25% of GDP, Indonesia’s logistics costs are among the highest in ASEAN. Port congestion and weak connectivity outside Java remain persistent challenges
- Regulatory complexity — Abrupt regulatory changes, inconsistent enforcement, and duplicative certification requirements create compliance risk. Halal certification through BPJPH covers the entire supply chain (raw materials, production, logistics)
- Infrastructure gaps — Cold chain capacity is limited, particularly outside Java. Intermodal transport networks in Kalimantan, Sulawesi, and parts of Sumatra are still developing
- Minimum capital requirements — PT PMA companies require minimum paid-up capital of IDR 2.5 billion (
$150,000) and total investment plans of IDR 10 billion ($625,000)
Best For
Palm oil-based products, halal food manufacturing, products targeting the Indonesian domestic market or broader Muslim-majority markets. Indonesia is the right choice when market access to 275 million consumers (or the global halal market) is the primary objective.
Side-by-Side Comparison
| Factor | Thailand | Vietnam | Indonesia |
|---|---|---|---|
| Food mfg value added (UNIDO) | ~$26.7 billion (14th globally) | ~$11.8 billion (23rd globally) | ~$49.3 billion (4th globally) |
| Minimum wage (monthly) | ~$300 (Bangkok) | $138-198 (by region) | $127-316 (by province) |
| Manufacturing labor cost/hr | ~$5-6 | ~$3 | ~$1.50-2.50 |
| Industrial electricity (per kWh) | ~$0.099 | ~$0.084 | ~$0.077 |
| EU FTA in force | No | Yes (EVFTA, since 2020) | No |
| EU food exports (2024) | ~EUR 2.1 billion | ~$7.5 billion total agri | Growing (no specific food data) |
| Halal certification | CICOT (voluntary) | No national system | BPJPH (mandatory by Oct 2026) |
| BRC/IFS-certified factories | Many (export-oriented) | Growing (concentrated in large exporters) | Limited |
| Key food categories | Seafood, ready meals, sauces, halal, snacks, pet food | Coffee, cashews, aquaculture, tropical fruits | Palm oil, halal food, domestic market |
| Foreign ownership | 100% (BOI promoted) | 100% (most sectors) | 100% (PT PMA, with capital requirements) |
| Cold chain maturity | Developed | 30% of required capacity | Limited outside Java |
| RASFF notifications (EU) | 32% of ASEAN total (highest) | Growing number of violations | 95% border rejection rate on flagged products |
Which Country for Which Category?
The right sourcing country depends primarily on what you are manufacturing and where you are selling it.
Seafood (canned tuna, shrimp, fish products) — Thailand. The certification infrastructure, established EU export channels, and companies like Thai Union make Thailand the default choice. Vietnam is a strong alternative for pangasius and shrimp, particularly when leveraging EVFTA.
Coffee and cashew nuts — Vietnam. World-leading production volumes and EVFTA tariff advantages make this a clear choice.
Halal food for global markets — Thailand for export-focused halal production (CICOT is internationally recognized across 134 countries). Indonesia for products targeting the domestic Indonesian market or seeking authentic halal positioning.
Sauces, condiments, and ready meals — Thailand. The concentration of OEM-capable manufacturers with international certifications is unmatched in ASEAN.
Palm oil-based food products — Indonesia. As the world’s largest producer, Indonesia offers the lowest raw material costs for any product containing palm oil or vegetable oil.
Snacks and confectionery — Thailand for premium/export-grade production. Vietnam for cost-competitive basic snack manufacturing.
Tropical fruits and vegetables — Vietnam for fresh and minimally processed products (especially with EVFTA advantages). Thailand for processed fruit products.
What European Buyers Should Verify Before Choosing
Regardless of which country you choose, the following due diligence steps are essential:
- Confirm specific certifications at the factory level — Country-level generalizations are unreliable. Request BRC, IFS, or FSSC 22000 certificates and verify them through the relevant certification body databases
- Check EU RASFF history — The EU’s Rapid Alert System for Food and Feed (RASFF) maintains a public database of border rejections and safety notifications by country and product category
- Visit the factory — Or commission a third-party audit through SGS, Bureau Veritas, or Intertek. Desktop research can confirm certifications; only on-site visits can confirm actual practices
- Understand the total landed cost — Low factory-gate prices can be offset by logistics costs (especially in Indonesia), tariff differentials (Thailand vs Vietnam for EU), and compliance costs
- Assess cold chain end-to-end — Particularly critical for Vietnam and Indonesia, where cold chain infrastructure remains a bottleneck
Sources
- Source of Asia “F&B Industry in Southeast Asia 2024-2025” (market size data)
- UNIDO INDSTAT Rev.4 Database https://stat.unido.org (food manufacturing value-added data)
- Thai Union Group “FY2024 Press Release” (revenue, certifications)
- Charoen Pokphand Foods “FY2024 Financial Results” (revenue data)
- European Commission “Agri-food Trade Statistical Factsheet” 2024 (EU-ASEAN trade data)
- EU-Vietnam FTA text, European Commission https://trade.ec.europa.eu/access-to-markets/en/content/eu-vietnam-free-trade-agreement
- EuroCham Vietnam “EVFTA Turns Five” 2025 (bilateral trade figures)
- World Coffee Research “Vietnam” (coffee production data)
- The Investor “Vietnam’s cashew nut exports hit record high in 2024” (cashew data)
- VietnamNet “Vietnam must tighten food safety controls after 130 EU export warnings” 2024
- ASEAN Briefing “Vietnam Cold-Chain and Agritech Opportunities” 2024
- Statista “Indonesia: GVA large and medium-sized food manufacturing” (Indonesia market data)
- US Trade.gov “Indonesia Food and Beverage Halal Certification Extended” 2024
- BPJPH “Halal Certification Obligation” (halal requirements)
- World Bank “Aging and the Labor Market in Thailand” (demographics)
- BOI Thailand “Investment Promotion Guide 2025” (incentives)
- ASEAN Briefing “Hiring Costs in ASEAN” 2025 (labor cost comparison)
- Nation Thailand “Thailand’s halal exports reach US$8 billion” 2024
- PLOS ONE “Incidence of fraud and adulterations in ASEAN food/feed exports: A 20-year analysis of RASFF’s notifications” 2021
- Freshdi “Thailand’s Agricultural Processed Products: Export Success Stories” 2024
About the Researcher
Takashi Kinoshita, MBA — Founder of Taitonmai Co., Ltd. 8 years in international procurement at SHARP Corporation, including factory operations in Thailand. Now leads a research team covering 80+ countries, specializing in ASEAN company intelligence and market analysis. 350+ projects delivered to clients in Japan, Europe, and North America.
Need help identifying the right food manufacturer in ASEAN? We provide custom company research starting from $2,000 — a fraction of what major consulting firms charge ($10,000-50,000 for similar reports). Email us at info@taitonmai.co.jp or visit https://taitonmai.co.jp/en/