Phuket Business: Coca-Cola pouring B200mn into Thai cola battle; New player enters market

PHUKET: Coca-Cola (Coke) is spending 200 million baht on marketing in the final quarter of this year in hopes of surpassing Pepsi to become the undisputed leader of Thailand’s 38.5 billion baht carbonated-drink market.

Colas represent about 75% of Thailand’s carbonated drink market. This is followed by flavored drinks (20%) and lemon-lime beverages (5%). The cola segment is also the most competitive, with international brands such as Pepsi-Cola, Coca-Cola and Big Cola, in addition to local newcomer, Est (see below) fighting for a share.

As part of Coke’s 200mn baht marketing effort, the firm is conducting the largest sampling campaign ever in Thailand, along with a nationwide tour to interact with consumers; one highlight was distributing a million bottles of Coke in a single day.

In a recent interview with The Nation, Thiti Tuangsithtanon, marketing manager of Coke’s Thailand subsidiary, said that the soda drink market was projected to increase by 11% year-on-year in the first nine months of this year, while Coke would be able to grow its domestic sales by 20% over the same period…

“We expect that the overall carbonated drink market will be on par with 2010, with 12 to 15% growth [for the entire year]. The market was flat last year due to the massive flooding… We expect the market to grow again this year driven by positive factors, including the coming of new brands, and more investment allocated in the industry by both existing and new players,” he said.

“Having a strong alliance with local partners – Thai Nam Thip and Haad Thip – is considered as one of the factors driving our success in accessing individual consumers.

They have provided us with local insight and know-how regarding consumers and the market situation,” he said.

New cola player ‘est’ ambitious
Serm Suk has set an ambitious target for its recently launched ‘est’ brand to become Thailand’s cola segment leader within three years.

The company aims for est to achieve 8 billion baht in sales in its first year: “We aim to have 25% market share and to take the number two spot in the local cola drink market in the first year, and be the market leader by the end of three years,” said Dhitivute Bulsook, president of Serm Suk.

“We will invest 300mn baht in the last two months of this year to boost awareness of est, and another 900mn baht in proactive marketing activities next year,” Dhitivute said.

He added that while 40% of Thai consumers are loyal to either Pepsi or Coke, about 60% of them are brand switchers, willing to try new cola beverages when they appear on the market.

He described Thailand as a unique beverage market where returnable glass bottles still play a major packaging role, representing between 60 and 70% of the market, with PET bottles and cans making up the remainder.

“Our capacity for handling returnable glass bottles, which are owned assets, is our unbeatable advantage. [The volume of] returnable glass bottles is still growing at an average of 5 to 6% per annum,” he said.

Parinya Permpanich, Serm Suk’s marketing and sales operation director, said the company has five bottling plants and 48 branch offices across the Kingdom.

The company has 1,200 sales trucks, 150,000 coolers and more than 200,000 retail outlets and eateries that are ready to support the est product line, he said.

— Kwanchai Rungfapaisarn