Ichitan Group Plc, the maker of ready-to-drink green tea, is making a foray into energy drinks to balance business risks and revive falling sales as the market has suffered a big drop over the past several years.
Tan Passakornnatee, chief executive of Ichitan Group, said the Thai energy drink market only has a few major players and the market size is huge.
The ready-to-drink green tea market has recently struggled, posting a 12% sales contraction in the first quarter of this year.
"I've drunk energy drinks almost every day since I was young," Mr Tan said. "During my travels abroad, particularly in Europe, I saw younger people drink them as well."
In order to expand into the new segment, the company set up Ichitan Power Co to promote T247, its new energy drink brand.
T247 was created as a hybrid energy drink for the new market segment. The beverage is intended for both blue and white-collar workers, particularly new employees.
"Although hybrid energy drinks are comparatively new to Thailand's market, they are popular in Europe and the USA as not only energy boosters, but refreshers", he said.
DKSH Thailand was appointed to distribute Ichitan Power products via modern trade channels.
Ichitan will allocate 200 million baht to promote the new energy drink this year. The company has hired Thai pop musician Jetrin Wattanasin and actor Yuke Songpaisan to serve as brand presenters.
"We accept that we were not very successful in boosting sales of Ichitan green tea in the first quarter, due to the impact of the economic slowdown," said Mr Tan. "But I never give up and hope that one day luck will be on our side."
The company aims to generate sales of 700 million baht from T247 this year, a figure it seeks to increase to 3.5 billion baht over the next three years. Apart from Thailand, the company plans to export the product to Cambodia, Laos, Myanmar and Vietnam (CLMV).
Thailand's energy drink market was worth 35 billion baht in 2016, down 2.6% from 2015.
The three major players are Osotspa's M 150 brand, which has long dominated the market with 57% market share. Next are Carabao Dang and Krating Dang, with 21.1% and 16.3%, respectively. Smaller brands make up the rest.
The energy drink market is expected to resume growth this year as major energy drink players will further move on to guard their market shares this year.
Ichitan plans to appoint its distributors in the CLMV market by the end of this year and generate 500 million baht in sales from these countries.
ICHI shares closed yesterday on the Stock Exchange of Thailand at 8.95 baht, up five satang, in trade worth 14.7 million baht.