Nestlé launches Starbucks RTD coffee in Thailand, boosting competition

Nestlé has launched three variants of the Starbucks Double Shot Espresso ready-to-drink line, including Starbucks Double Shot Espresso Americano (unsweetened), Starbucks Double Shot Espresso Latte, and Starbucks Double Shot Espresso Americano, all in 220ml cans, priced at 49 baht each.

Two years ago, the premium RTD coffee market (priced at 30 baht and above) was relatively small, valued at only 500 million baht. However, the growth potential has been high, driven by consumers’ desire for convenience and the ability to take drinks on the go. This has led major brands to enter the market.

Significant players in the premium RTD coffee market include Japan’s Boss Coffee, under Suntory PepsiCo Beverage (Thailand), in 250ml PET bottles priced at 35 baht; UCC, also from Japan, offering 274ml PET bottles priced at 39 baht and 185ml cans at 39 baht; and Amazon from PTT Oil and Retail Business (OR), available in 200ml PET bottles at 35 baht.

Additionally, other brands, both big and small, are attempting to shift from mass-market to premium offerings, such as Birdy Café in 200ml PET bottles at 29 baht, Arabus in 200ml PET bottles at 29 baht, and even Nestlé's Nescafé, with premium 210ml cans priced at 29 baht, already on the market (all prices are from 7-Eleven stores).

In the general RTD coffee market, a multitude of brands are competing, with Birdy, from Ajinomoto, leading the pack with around a 50% market share.

It took Starbucks seven years to bring its ready-to-drink products to Thailand. In 2018, Nestlé, the global food and beverage giant, invested US$7.15 billion to acquire the rights to market and distribute consumer packaged goods (CPG) under the Starbucks brand. 

Previously, the brand only sold Starbucks coffee beans, ground coffee, and coffee capsules under the Starbucks name, using Nescafé's technology.

Starbucks Double Shot Espresso is not yet produced in Thailand but is imported by Nestlé (Thailand) from Malaysia, with Nihon Canpack (Malaysia) as the producer.

Starbucks, a brand that exerts significant influence over coffee enthusiasts and consumers, is considered premium in Thailand, contributing to its image-boosting power. Starbucks stores are also seen as "third places," functioning as workspaces or study spots for students.

Nestlé’s expansion into the ready-to-drink coffee market strengthens its portfolio, extending from mass-market Nescafé to premium Starbucks Double Shot Espresso. 

This move opens up opportunities for consumers who wish to try Starbucks coffee at an affordable price of 49 baht, compared to the higher costs of visiting a Starbucks store. With this move, competition in the premium coffee market is set to intensify.

The overall coffee market in Thailand is valued at over 24 billion baht, with an average consumption of 300 cups per person annually. The market is expected to grow at a 9% rate over the next decade. 

For general RTD coffee, prices are around 10 baht, while premium options are priced above 30 baht.