Stiff competition between 2 major players in Thailand’s soft drink segment

Research agency Nielsen estimated the soft drink segment in Thailand to be worth Bt 56 billion (US$1.72 billion) in 2019, up 12% from the previous period. Thailand’s main soft drink category is carbonated soft drink which currently faces stiff competition with 2 major players, Pepsi and Est competing directly to win market share.
Nielsen estimated that of the total carbonated soft drink industry, 71?longed to cola drinks followed by 23% for flavoured drinks and 6% for the lemon-lime segment. Meanwhile, sales of all carbonated drinks grew by 15.5% in 2019, outpacing the overall soft drink industry’s growth of 12%.
Ms Siremorn Supachanya, Chief Marketing Officer of Suntory PepsiCo Beverage (Thailand) Co (Suntory) has attributed the growth of Thailand’s carbonated soft drinks mainly to the hot climate and aggressive marketing activities by the major players.
Suntory is set to splurge Bt 400 million (US$12.3 million) on a comprehensive campaign and promotional activities to boost sales during the summer season, the peak period for the soft drink market. Suntory is also planning a major launch of a new version of Mirinda soft drink in the 2nd quarter 2020, in line with the parent company’s goal of building a new image of the soda. Suntory has done a test launch for Mirinda Green Cream Flavor in January after slowing down its promotional activities for its green carbonated soft drink for several years. It has also resumed marketing of 7 Up lemon-lime carbonated soft drink in the middle of February by launching 7 Up Free, the sugar-free drink with zero coloring and caffeine on the Thai market.
These marketing activities are in response to Gen Z consumers, who now account for 19% of Thailand’s population and are open to new things and healthy trends.
With the COVID-19 outbreak and existing economic slowdown, Suntory still expects a double-digit growth in sales although it is not certain whether the domestic carbonated soft drink industry will grow at a double-digit rate this year.
Meanwhile, the producer of Est soft drink, Thai Drinks Co is planning to spend up to Bt 80 million (US$3.52 million) to promote its cola products this year. Jesdakorn Ghosh, Vice-President of marketing for Thai Drinks Co said this year the company will focus on boosting consumption of Est cola soft drinks in returnable glass bottles.
The company has also hired 4 well-known Thai celebrities as presenters to tap their fan clubs totalling a combined 10 million members. The company aims to boost consumption in the food service channel for Est cola brand through this new strategy.