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ThaiBev pushes food business growth

ThaiBev pushes food business growth

MONDAY, October 15, 2018

THAI BEVERAGE (ThaiBev) is revising its crucial strategy with a focus on increasing organic growth and continuous expansion of its food business operating under its current restaurant brands.

Nongnuch Buranasetkul, senior vice president and food business chief for Thailand, said that ThaiBev had entered the food business by acquiring Oishi Group in 2008, which had more than 90 branches at that time. The company started to diversify from Japanese restaurants in 2015. In December last year, it also bought 252 branches of KFC restaurants.
“Since 2008, our food business has grown by three times. Today, we operate 562 branches of Japanese and non-Japanese restaurants with 27 brands altogether,” said Nongnuch, who is also president and CEO of Oishi Group.
“We plan to expand all brands in our portfolio, with about 50 outlets a year from Oishi, QSA [QSR of Asia] and Food of Asia [FOA],” she said. “As of now, we do not expect to add more brands into our portfolio. 
However, we will drive growth through our current brands,” added Nongnuch. She said the company faced a few challenges. They are:
“Highly competitive market: There are numerous brands and categories, both local and international, offering the consumers plenty of choices. Buyers have limited purchasing power and consumption capacity, so there is more intense competition for a share of their stomachs. 
“Rapid change in consumer behaviour: How fast we can adapt ourselves to better respond to them in time eg urbanisation, growth of the middle class, technology/digital lifestyle or healthy eating. These are challenging but at the same time there are opportunities if we move fast.
“Personnel: As we grow, we need to develop and build our team fast to catch up with our business growth.”
She said in terms of macro-consumer trends, the world is changing very fast, and the company needed to adapt quickly. There is rapid urbanisation, a growing middle-income class, increasingly tech-dependent lifestyle, focus on healthy eating as well as an ageing society. And there is also the Asian century. Asia will become the future growth market.
“Our strategies are to drive organic growth, expand aggressively, build technologies and digital strengths to enhance and improve store efficiency, as well as improve business fundamentals,” said Nongnuch.
She said the company would drive its organic growth through innovation, value for money and delivery platform. For store expansion, the firm will expand aggressively with both current and new models of its restaurant business.
“We will also make serious inroads in the packed food segment. This is a huge opportunity, as we are still small in this category. We will improve our distribution to gain more penetration, as well as to build technology and digital strengths to improve customer experience and in-store efficiency. We can capture new consumer lifestyles, as they look for ease and convenience,” she said, adding the company needed to improve its fundamentals with people and processes to improve productivity and efficiency. 
“The move is in line with our vision to be the King of Japanese Food and Beverages, offering a variety of options and price tier,” said Nongnuch. 
She said that one of the Oishi strategies is to drive expansion. Therefore, apart from nationwide expansion, the company definitely wants to take its brands overseas. 
“Our vision is to grow Asean, and our initial plan is to focus on CLMV [Cambodia, Lao, Myanmar and Vietnam],” said Nongnuch.
She said the company had seen a declining demand in the overall green tea market and it was the same for Oishi green tea. 
“The key reason is the excise and sugar tax. However, the good news is the rate of decline is slowing.
“We do have plans to respond to the situation. For example, we have launched the Oishi new 350ml size at Bt15, as we see a price gap in the market. It’s a kind of magic price point. 
“We launched this in April this year and got quite a good response. We know innovation is also one of the key strategies for the success of Oishi, so we continue to offer innovation to consumers,” said Nongnuch.