Carabao kicks off footie deal
SET-listed Carabao Group Plc (CBG), the maker of Carabao Dang energy drink, will spend 800 million baht to sponsor the Football League Cup in England from 2017-19 with an aim to widen its product reach in the global market.
The sides signed the sponsorship agreement in Bangkok yesterday. Carabao will pay the League Cup £5 million, £6 million and £7 million in 2017, 2018 and 2019, respectively, said chief executive Sathien Setthasit.
This sponsorship will increase opportunities for Carabao to do marketing activities at 82 matches from selling products and giving away free samples at venues throughout the UK.
The company wants to expand its energy drink business in the UK because British consumers have high spending power. Apart from the League Cup, Carabao is the jersey sponsor for Reading FC, an English football club, during this season.
"The League Cup sponsorship together with our aggressive marketing activities through the next three seasons will give us satisfactory sales in the UK market, up from an estimated 4-5 million cans sold this year," Mr Sathien said.
Carabao expects to gain a 10% market share in the UK energy drink market over the next decade. Carabao is its energy drink brand in the UK and Carabao Dang is for the Thai market.
Kamoldist Smuthkochorn, Carabao's deputy managing director for marketing, said its energy drink products are available in 30 countries. Export sales contribute 30% of the total, with 60% of exports going to Cambodia, Laos, Myanmar and Vietnam.
Carabao recently expanded its energy drink business in Europe and plans further growth there. It wants to export to China, Brazil and the US, while the company is negotiating with partners in Poland, Russia, France and Germany to distribute its products. Global brand exposure should make it easier for Carabao to seek new business partners for distribution.
Mr Sathien said the worldwide energy drink market is estimated to be worth 3.3 trillion baht with average annual growth of 3-5%.
Carabao's export sales in the first nine months this year grew by 40% to 2.4 billion baht while domestic sales rose 12%, beating the industry's negative growth of 1%. Its total sales were 6 billion baht.
The company will raise production capacity in the next few years to support growth from 1 billion bottles and 300 million cans per year to 1.5 billion bottles and 1 billion cans.
CBG shares closed yesterday on the SET at 74 baht, up 75 satang, in trade worth 366 million baht.