SPBT stays positive amid weak market
Suntory PepsiCo Beverage Thailand Co (SPBT), a drinks distributor, remains upbeat about its sales prospects despite a weak market overall for soft drinks in the first five months of the year.
Somchai Ketchaikosol, chief marketing officer of SPBT, said the company will double its marketing and investment budget to 200 million baht this year, mainly to promote the Mirinda brand’s mainstream flavours: Orange, Strawberry and Green Cream.
About 60% of the marketing budget will be geared towards digital media, with development of a digital platform to reach out to Generation Z customers and inspire them to try Mirinda, Mr Somchai said.
The company also aims to strengthen its product portfolio by developing products in response to customer requirements in terms of flavours and packaging.
SPBT recently redesigned and refreshed the Mirinda packaging to make it more appealing to Gen Z. It also introduced new flavours, Mixed Berry and Watermelon, to stimulate consumption of flavoured drinks and attract a new consumer base.
Omer Malik, general manager of SPBT, said last month that SPBT’s sales in the first four months of 2020 were slightly better than the overall industry’s, which were down 20-30% in March and April.
According to Nielsen, the carbonated soft drink industry in Thailand was estimated to be worth 56 billion baht in 2019, up 12% on the previous year.
Of the total carbonated soft drink industry, a 71% share belonged to cola drinks, 23% to flavoured drinks and 6% to the lemon-lime segment.
Sales of all carbonated soft drinks grew by 15.5% last year, outpacing the overall industry’s growth of 12%.
Mr Somchai said Thailand’s carbonated soft drink market is expected to recover in the second half of the year with all businesses allowed to operate as usual.
Moreover, the market is expected to get a big boost from state stimulus packages to encourage people to get out and travel, he said.
Mr Somchai voiced confidence that the carbonated soft drink market overall would be back to be on a par with last year’s level in terms of value if people spend their lives as normal in the second half of the year.
According to a Nielsen report, Thailand’s liquid refreshment market contracted by 7.3% year-on-year in the first five months of the year, due to the coronavirus pandemic.
Sales of sports drinks and ready-todrink tea, which made up 3% and 8% of the market respectively last year, saw a sharp decline in sales of 13% each in the first five months, followed by drinking water (-12%), ready-to-drink coffee (-7%), energy drinks (-6%) and carbonated soft drinks (-2.5%).
The drop was partly due to sales distribution channels such as eateries, which account for 18% of sales, being shuttered during the lockdown period.
Thailand’s soft drink market was worth 155 billion baht in 2019, an increase of 9% from the year before.