Krating Daeng drinks to growth in a slowing market

Krating Daeng drinks to growth in a slowing market

Thailand's overall energy drink industry saw an estimated sales contraction of 2-3% in the first five months of this year due mainly to the economic slowdown, the producer and distributor of Krating Daeng drink says.

Surachai Chonglertvarawong, marketing director of The Red Bull Beverage Co, the distributor of Krating Daeng and Ready energy drinks, said the slow economy was not the only reason for sluggish sales. The drought, which is hurting rural income, and the illegal fishing problems were also factors that reduced the consumption of energy drink in the five months.

Farmers and workers in fishing boats are big consumers of energy drinks.

The company, however, remains confident that the industry will manage to grow by 1-2% this year, on par with last year's growth.

Sales of Krating Daeng drink grew by 2-3% in the first five months and the company expects full-year sales to rise by 5-8% from 3 billion baht last year. To achieve its goal, the company will allocate 200 million baht and 100 million on marketing activities this year for Krating Daeng and Ready brands, respectively.

Saravoot Yoovidhaya, chief executive of Krating Daeng Group, said it had hired actor Sukolwat "Via" Kanaros as the new presenter of Krating Daeng in its latest marketing campaign, in the hope of appealing to the younger generation.

Despite the industry's negative growth, the premium energy drink segment still grew 2-3% in the first five months. This has led the group recently to launch Krating Daeng G3, a premium product targeting young people.

Krating Daeng has a 30% market share in the 3.4-billion-baht premium energy drink segment, which makes up 15% of total energy drink.

According to market research company AC Nielsen, Thailand's energy drink industry was worth 21.4 billion baht as of May 30. Krating Daeng has a 16.3% corporate share year-to-date, up from 15.9% last year, behind Osotspa's M 100 at 57.7% and Carabao Daeng at 21.1%.

Mr Surachai is concerned over the recent measure to limit sugar used in drinks and has urged the government to consider it. "To be fair, this measure should cover all product categories that have sweet taste, such as confectionery," he said.

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