TACC looks beyond saturated Thai market to sell beverage products
TAC Consumer Co (TACC) has left the hyper-competitive bottled-green-tea market in its Thai base to focus on other strategic markets for its Zenya brand in Asean, particularly Cambodia and Singapore.
Within five years, the company aims to become a leading beverage company in Cambodia, Singapore, Myanmar, Laos and China, boosting sales from about Bt1 billion last year to Bt5 billion and lessening dependence on the Thai market from 85 per cent of sales last year to 65-70 per cent.
In Thailand, besides ready-to-drink tropical green tea sold at particular golf courses in Bangkok, tea and latte are served in beverage dispensers at 7-Eleven convenience stores. V Slim canned functional coffee and Sawasdee powdered milk mixed with durian or mango chunks are stocked at some retail outlets around the country.
Executive chairman Chatchawe Vatanasuk, 41, said yesterday that the company decided in 2008 to leave most of the ready-to-drink green-tea market in Thailand, which is a highly competitive market with about 50 players. At that time, the green-tea market was dominated by 15-16 major brands.
“We should find a new battlefield where we actually stand a chance of winning,” he said.
Before founding TACC in 2002, Chatchawe spent about two years working each time with major international firms.
He was the senior marketing executive in charge of the Indochina market at Cerebos, the producer and distributor of Brand’s chicken essence; the brand and business development manager at Novartis, the manufacturer and distributor of Ovaltine malt drinks; and the group brand manager of Coca-Cola in Thailand.
TACC ships its Zenya green tea to 10 markets around the world, with Cambodia and Laos considered strategic markets because of their size, accessibility and growth potential, as well as an appropriate level of competition.
“We launched our ready-to-drink green tea in Cambodia seven or eight years ago. Cambodia is a market with young consumers. About 55 per cent of the population is less than 20 years old. Only 9 per cent of its 15.6 million people are above 40,” he said.
Cambodia is not very urbanised yet. Only 3 million people live in cities. The country has gross domestic product per capita of about US$2,600 (Bt85,320) and annual GDP growth of 7.5 per cent.
More than 80 per cent of households in Cambodia have TV sets. Television commercials have the highest media penetration.
Consumption of ready-to-drink green tea in Cambodia is only 1.15 litres per head per year, which is quite low compared with Thailand’s 6.6 litres.
“For Zenya, we have grown our retail sales from only Bt70 million in the first year in the country to about Bt300 million last year. We target about Bt400 million this year,” Chatchawe said.
Cambodia’s ready-to-drink green tea market approaches Bt600 million a year.
“We expect to drive our annual exports from Cambodia to Bt1 billion in five years,” he said.
The company also plans to launch an electrolyte drink in Cambodia. The new functional beverage product is now undergoing market research.
“We see Singapore as another strategic market. There are many merchants, businessmen and tourists moving in and out of Singapore. Having a strong brand presence in Singapore will allow the company to have the potential to expand into other markets around the world,” he said.
In 2010, the company entered the Singaporean market, which now generates annual sales of about US$1 million.
TACC is approached by traders in many markets such as Dubai and Mauritius, Chatchawe said.
“We are also looking at China as a potential market for our Sawasdee nutrient three-in-one powdered mixed drink products, as Chinese consumers prefer hot rather than cold beverages,” he said.
TACC plans to join “SIAL China 2015”, Asia’s leading food and beverage exhibition, coming up in Shanghai next Tuesday to Friday. It hopes to build awareness of Sawasdee products in China and other markets in Asia and around the world.
