Wednesday, July 30, 2008

THAI's recipe for success

Airline sees export potential for its baked goods at lower prices

Boonsong Kositchotethana

THAI catering specialist Odd Gunnar Engebretsen (left) and director Chumpot Mintarkhin show off the array of THAI's baked offerings.

Rolls, baguettes, croissants, breads, pastry and cakes do not necessarily need to come from France or another European country in order to be yummy.

That is exactly what the Catering Department of Thai Airways International (THAI) is trying to prove to the world, that goods from its bakery house at Don Mueang International Airport in Bangkok can be perfectly tasty and even cost much less.

The flag carrier is making impressive strides to create an overseas presence for its bakery products, making them available at airline caterers and retail shops, as part of its new business development campaign.

It seems to have made a good start as the Japanese unit of Gate Gourmet, the world's largest independent provider of airline catering and provisioning services, has agreed to source frozen bread, mostly butter rolls, from THAI.

The deal involves the shipments of some three million rolls, worth about 10 million baht, over a three-year period by sea to Gate Gourmet Japan's facilities at Narita International Airport.

These Thai-made rolls go to the trays of the inflight meals that Gate Gourmet delivers to its nine of its international carrier clients that offer services through Narita, including Continental Airlines and Turkish Airlines.

"They (Gate Gourmet) told us the taste of our bread is good, the texture is right and overall quality is up to the high European standards," said Odd Gunnar Engebretsen, the catering service specialist at THAI.

The Norwegian executive, who is marketing THAI's bread and food overseas, said THAI's rolls served as a good substitute to the bread Gate Gourmet Japan previously sourced from Germany and Poland and from local Japanese bakery houses.

THAI's shipments offer a 10-20% cost saving for Gate Gourmet Japan compared to the cost if they were to be sourced from Europe, and up to 50% for Japanese-made offerings.

"Bread [making] culture is not there in Japan," noted Mr Engebretsen, a veteran of the airline catering business. "Thais are better at this area."

Mr Engebretsen is now pursuing more contracts with at least five other airline catering firms in Asia; namely, Gate Gourmet Hong Kong, LSG Sky Chefs subsidiaries in Hong Kong and South Korea, Cosmo Japan, and Evergreen Sky Catering in Taiwan. LSG Sky Chefs is part of the German airline Lufthansa AG.

Chumpot Mintarkhin, a director at THAI's Catering Department, said Gate Gourmet Japan was pleased with the initial three shipments of THAI's frozen rolls, numbering more than 600,000, and indicated a possibility of ramping up a volume purchase.

THAI is also working to market its bakery products for general Japanese consumers through wholesalers under bulk sales, Mr Engebretsen added.

Mr Engebretsen said the exports of THAI's bread could potentially reach seven million pieces this year, valued at some 20 million baht.

The export drive is contributing to THAI's bid to revitalise its extensive catering facility at Don Mueang whose works have substantially reduced following the opening of the airline's new 3.68-billion-baht facility, which can produce 87,000 meals per day, at Suvarnabhumi Airport in September 2006.

Opened after the airport shift, Bakery House, the airline's bakery facility at Don Mueang, which covers a total area of 14,500 square metres, is underutilised. Bakery House now produces nearly three million pieces a month, compared to its monthly capacity of six million.

Part of Bakery House's production is sent to THAI's Suvarnabhumi catering facility, for uplifting at Don Mueang airport, which serves limited domestic flights, and to THAI's own 28 Puff & Pie retail kiosks, 29 wholesalers and airport lounges of THAI and other airlines.

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