Scotch turns over distribution to DKSH
published : 7 Jan 2017 at 04:00
newspaper section: Business
writer: Pitsinee Jitpleecheep
Scotch Industrial Thailand Co, the producer of Scotch bird's nest and chicken essence, has overhauled its distribution system for the first time in 33 years by appointing DKSH Thailand to distribute its products locally, and in Asia as Scotch expands.
The company hopes to turn the product into a regional health drink brand.
DKSH Thailand was appointed by Scotch Industrial to provide sales and market expansion (distribution) for Scotch products via traditional trade across the country. Scotch Industrial is in charge of sales and distribution through modern trade.
DKSH Thailand had distributed Brand's chicken essence, Scotch's arch rival brand, for years and its contract with Brand's expired at the end of 2016.
Sompoch Chavalvechakul, marketing director of Scotch Industrial, said the partnership with DKSH Thailand will increase the capability to bring Scotch products across all target groups by 10 times across the country through traditional retail channels this year by covering 100,000 traditional points of sales.
With its previous traditional distribution system, Scotch could distribute its products to cover only 10,000 traditional outlets.
In light of the partnership with DKSH Thailand, the company expects Scotch health and beauty sales will grow by 36% to 4.5 billion baht by the end of this year.
Of total sales expected this year, 50% will come from Scotch bird's nest drink, 32% from chicken essence and the remaining 18% from the others, which include Scotch Puree fruit essence and Scotch collagen.
Last year, sales of all Scotch products rose 6% to 3.3 billion baht.
Apart from the collaboration with DKSH Thailand, the company will increase its marketing budget by over 30% to 600 million baht to promote Scotch products this year.
Mr Sompoch said DKSH, the parent of DKSH Thailand, has a strong network in Asia. Scotch Industrial plans to appoint DKSH to distribute its products in Southeast Asia.
As an initial step, the company is interested in expanding into Cambodia, Laos, Myanmar and Vietnam and move further into Hong Kong, Malaysia, Singapore and Taiwan.
"With DKSH's global knowledge and strong network in Asia, we hope Scotch, a 100% Thai-owned health drink, will become a regional brand one day," Mr Sompoch said.
Scotch has a production capacity of more than 700 million bottles a year at its Nonthaburi factory.
"With the collaboration with DKSH and the improvement of Thailand's overall economy and political stability this year, we hope our sales will leap this year," Mr Sompoch said.
Leonard Tan, DKSH vice-president for consumer goods business, said the food supplement market in Southeast Asia has risen extensively.
The market size of chicken essence in Thailand is about 9 billion baht while the value of bird's nest segment is 3.59 billion baht.