Thai Drinks eyes regional expansion
THAI DRINKS, a subsidiary of Thai Beverage (ThaiBev) and its marketing arm for branded non-alcoholic beverages, aims to cash in on trade liberalisation under the Asean Economic Community (AEC) via the expansion of five flagship products
The company plans to double the size of its beverage business by 2020, from US$700 million (Bt24.7 billion) in sales posted last year.
About half of Thai Drinks’ business in 2020 will be from foreign markets, and from Asean in particular.
Vivek Chhabra, a senior executive who has been rotated from Fraser & Neave (F&N) to head Bangkok-based Thai Drinks as its president since September last year, said that – in line with ThaiBev’s policy to become a beverage leader in Asean by 2020 – his company had seen tremendous opportunities in expanding its flagship beverages into the region.
This is especially the case in Myanmar, where current per capita consumption is relatively low when compared to other neighbouring markets, he said.
In collaboration with its affiliate F&N, Thai Drinks also plans to head into other high-potential markets within the AEC, including Cambodia, Laos and Indonesia.Chhabra has strong historical achievements and experience in doing business in Asean, which should benefit Thai Drinks’ marketing and distribution team.
“The growth opportunity in Asean countries is phenomenal,” he said. “We see such opportunity as huge for our branded beverages to grow and gain more share in the region.”
He added that the only challenging factor for the business this year was the slowdown of the global economy, especially in China, which would also affect all Asean economies.
Thailand’s non-alcoholic beverages industry, amounting to around 8 billion litres, will also see either slight growth or be flat this year, he forecast.
Of the total domestic market, about 4 billion litres are accounted for by drinking water, and another 2 billion litres by carbonated soft drinks.
The overall Thai market for carbonated soft drinks is worth some Bt50 billion a year, he added.
Chhabra said that for ThaiBev’s non-alcoholic beverage range, Thailand was now the second-largest market behind Malaysia, where F&N posted about $1 billion in sales last year.
F&N’s sales of non-alcoholic beverages in Singapore were also high, coming in at $200 million last year.
“We only launched our est carbonated drink in Malaysia about six months ago, and it is now locally produced at F&N’s bottling factory there. The est brand in Malaysia however is currently worth only 3 per cent of sales of the product in Thailand, while est has a market share of between 4 and 5 per cent in the carbonated soft-drink market in Malaysia,” the president said.
“For Thailand, our vision is to strengthen est as a key player in the carbonated soft-drink market, while our mission this year is to increase consumption and expand est’s regular drinker base through exciting marketing activities and the launch of new product innovations,” he explained.
The brand currently has 10 per cent of the Kingdom’s Bt50-billion carbonated soft-drinks market.
