Sales are seen as likely to drop 3.72 per cent from last year’s level, to Bt15 billion.
The ready-to-drink tea market grew by 0.7 per cent in volume terms last year to 470.7 million litres, but declined 2.5 per cent in value to about Bt15.57 billion, reflecting price-cutting by major players in a sluggish economic environment.
The market in the first seven months of this year fell by Bt612 million, representing a 6.3-per-cent year-to-year contraction to Bt9.11 billion.
In volume terms, the market dropped 4.8 per cent to about 14.2 million litres in the same period.
Ichitan president and chief executive officer Tan Passakornnatee said the problem of generating sales in a tough market situation was very much the same for all players.
“The key issue [for Ichitan] is the decline of our profitability. In the past, we did not utilise our production capacity to the maximum, resulting in a higher average cost per bottle. What we need to do to restore profit is fully utilise our capacity, so that we can reduce the unit cost,” he explained.
This can be achieved by the launch of new products under the group’s current brands – Ichitan green tea, Yen Yen cool herb tea and Bireley’s juices – as well as introducing new branded beverages, he added.
The company recently launched Ichitan Chew Chew ready-to-drink tea with jelly, which targets teenage drinkers, while reducing the size and price of Bireley’s juices from 290ml for Bt13 to 250ml for Bt10 to target the mass market and traditional trade outlets.
“In addition to new product launches, we have expanded our distribution channels both in Thailand and abroad, in order to fully utilise our production capacity. We will also produce beverages for other vendor’s brands under OEM [original-equipment manufacturing]| contracts. These strategies will allow the company to see a |full profit rebound in the| first quarter of next year,” Tan said.
Jesdakorn Ghosh, vice president of Oishi Group, said he expected the domestic ready-to-drink tea market to be stable or decline slightly this year, along with the country’s economic slowdown.
“For Oishi Green Tea, we have however grown our tea business in contrast with the market situation, which is in a state of contraction.
“As the market leader, it is our duty to build consumption, especially among target customers. Our success arises from our ability to create new innovations such as Oishi Kyoho, as well as launching a summer promotional campaign that hit the hearts of our target customers,” the executive said.
Ichitan, which claimed 41 per cent of the overall ready-to-drink tea market in the first seven months of the year, recently launched its Chew Chew jelly drink in the hope of generating Bt250 million in additional sales this year, with the new offering snaring 1.67 per cent of the Bt15-billion market.
In the tea-with-jelly segment, the market is targeted to reach Bt1 billion in sales this year, with Oishi’s Kyoho and Ichitan’s Chew Chew taking the lions’ share.
The sales value of the segment was around Bt390 million in |the first seven months of the |year.