Pepsi and Coca-Cola boost their water and juice drink portfolios

The moves are to tap the trend both in Thailand and globally of consumers being more health conscious and switching to drinks that are good for health.

Coca-Cola (Thailand) recently launched its ‘Aquarius’ bottled water in the Thai market, while rival Pepsi-Cola (Thai) Trading launched its ‘Aquafina’ bottled water here.

These launches are in line with the beverage giants’ strategies to significantly expand new initiatives of "still beverages", while staying strong on sparkling beverages with emotional marketing.

Antonio Del Rosario, general manager of Coca-Cola (Thailand), said sparkling and still beverage markets were both growing well in Thailand, at about the same rate – 7.7 per cent and 7.9 per cent, respectively, based on the most recent data of the year-to-date in August from Nielsen Thailand.

"We are the leader of the sparkling market with more than 59 per cent market share, according to Nielsen Thailand year-to-date report as at August 2015, and our business continues to grow well, ahead of the growth of the market. It is the business in which we will continue to invest heavily in terms of innovation, marketing activities that engage and connect our brands with consumers, and in ensuring that we service our trade customers in the most efficient manner to help them grow their own businesses," Rosario said.

He gave reasons for Coca-Cola’s interest in "still beverages" such as juices and water:

First, Coca-Cola (Thailand) is committed to being a total beverage company with a comprehensive portfolio to meet every consumer need for every drinking occasion. Indeed, the group already leads the non-alcoholic ready-to-drink market here. A bigger portfolio would just reinforce that position.

Second, the beverage giant has seen growth opportunities in the juice and water business as there are untapped opportunities, and emerging consumer needs. Third, the "still beverage" market is valued at about Bt144.53 billion.

"That is why you will see a lot of initiatives from the Coca-Cola system in the still beverages market," said Rosario, noting that globally, Coca-Cola has more than 500 brands in these two categories.

"Our most recent initiative in this area was the launch of Aquarius, an enhanced hydration drink targeting people who lead active lifestyles and looking for an everyday beverage to hydrate them," he said.

Meanwhile, Pepsi-Cola (Thai) Trading Co Ltd, a local unit of the PepsiCo, the global food and drink giant, introduced Aquafina here, in in an attempt to seize more of the Thai drinking water and hydration segment amid health and wellness trends.

The launch reflects PepsiCo’s global direction to expand its "Good-For-You" product portfolio, a portion of the company’s nutrition businesses, which is accounted for approximately 20 per cent of global net revenue in 2014.

Launched in the US over 20 years ago and currently ranked as the number one bottled water in the country’s convenience store channel, Aquafina is also one of PepsiCo’s global top 22 brands that generate US$1 billion (about Bt36 billion) a year in sales.

In addition to bottled drinking water, Aquafina has diversified into sparking and flavoured water product lines. The brand has also been sold in Canada, Spain, the Middle East, China, India, and Vietnam.

In developing and producing Aquafina purified water in Thailand, PepsiCo has entered into a strategic partner-ship with TTC Siam Drinking Water Co Ltd, Thailand’s leading manufacturer of purified drinking and mineral water. The newly-launched drinking water is now produced at TTC Siam’s new Bt800 million plant in Pathum Thani by using "HydRO-7", PepsiCo’s trademarked seven-step purification process.

Jagrut Kotecha, general man-ager beverages of Pepsi-Cola |(Thai) Trading, said: "To create |a sustainable growth for |PepsiCo’s beverage business in Thailand, we continue offering Thai consumers innovations and high-quality products under strong brands, in both the carbonated and non-carbonated soft drink categories.

"With an increasing consumers focus on health and wellness, we see a good opportunity to grow our business in Thailand’s drinking water and hydration category."

"In 2014, Thailand’s packaged drinking water market reached Bt28 billion in terms of value and has annual growth at between 8-10 per cent, which is considered higher than any other categories," said Somchai Ketchaikosol, marketing director – beverages of Pepsi-Cola (Thai) Trading.

He added that meanwhile, in 2014, Thailand’s carbonated soft drink market value reached Bt44 billion with the growth of only 4 per cent. It is expected that this year, the growth of carbonated soft drink market will maintain at around 4-5 per cent.

"We believe Aquafina will become a trusted choice for Thai consumers alongside our ‘Fun-For-You’ portfolio offerings like Pepsi, Mountain Dew, and Lipton. It will also strengthen our leading position in the Thailand’s beverage market as well as pave ways to innovate and introduce new products in the future."

Aquafina drinking water is now available at retail stores and eatery shops nationwide in two sizes – 600ml and 1.5-litres at Bt7 and Bt15 respectively.