Hypermarkets and convenience stores dominate the Thai landscape with 70% of food and beverage purchases being made in retail stores as of 2010. These markets often contain products with English-only labeling to target the ever-growing tourist population and increasingly global Thai consumer. Although the low-cost market is mostly dominated by local manufacturers, many Thais continue to prefer high-value items produced by foreign manufacturers.
This report will focus on the strongest performing beverage industry trends and make recommendations for increasing profitable through effective international marketing strategies.
Top Beverage Industry Trends in Thailand
The younger generations of developing nations in Asia are increasingly sophisticated consumers – several new factors influence their buying choices, and include:
- An increasingly urban lifestyle
- An awareness of product alternatives
- A preference for environmentally-friendly products
- A preference for healthier foods and beverages
The following high-growth product areas are capitalizing on one or more of these trends.
Coffee has historically been a very unsuccessful product in Asia. When Nestle entered China with an instant coffee product they found that their poor sales were due to Chinese consumers not getting the sugar and creamer proportions correct. Nestle introduced a 3-in-1 pre-mixed product and sales skyrocketed. With more and more consumers adopting Western tastes and enjoying an increasingly mobile lifestyle, instant coffee is on the rise. The Canadian Agri-food Department expects instant coffee sales to increase 83% between 2009 and 2014.
Tea continues to be one of the most popular drinks in many Asian countries, and Thailand is no exception. Teas that have added health bonuses perform extremely well and continue to command premium prices. New entrants will do well by introducing ready-to-drink beverages that have unique health benefits and interesting flavors. The most popular flavors continue to be variations of green tea, though the recent successes of energy drinks with artificial flavoring indicate that consumers are interested in exploring new flavors. This category is expected to grow over 50% from 2009 to 2014.
As Thai consumers grow more health-conscious the sales of 100% natural juices have taken off – growing 84% in 2009 alone. Juices with interesting mixes, higher quality fruits and vegetables, and added nutrients will fare very well – especially those that are orange-flavored as it continues to be the flavor of choice.
Sports Drinks and Diet Aids
Drinks that help the body recover after workouts or aid in the reduction of body fat have seen triple-digit growth almost every year for the past decade. Dieting drinks that promote healthy weight-loss are especially popular among middle and upper class Thai consumers. Functional beverages are a global trend that is just beginning to get traction in Southeast Asia – foreign companies that make product changes specifically for the Thai market have significantly outperformed those that offer an unmodified version.
Strategies for Creating a Premium Brand
Branding and marketing are extremely complex topics and an expert consultant can be invaluable. Here are a few things to keep in mind while working on a premium product launch:
- Create a product name that resonates emotionally with consumers in the target market. The right foreign product name may be very different than the name in the domestic market.
- Develop superior packaging. Retail-appeal is a huge part of the premium product experience – if you need convincing take a trip to your nearest Apple Store.
- Clearly and consistently communicate the value of your product on packaging labels and advertising materials.
- Create a fantastic customer experience both in and out of store. If you are unable to provide in-country customer support then make sure you work with a distributor who can.
You can read more information about the viability of premium, non-durable goods in Thailand provided by NielsenWire.