Amway leaps into energy drink fray

Amway leaps into energy drink fray

From left Ms Ratana, Mr Coon and Mr Kittiwat at the launch of XS Zero energy drinks.
From left Ms Ratana, Mr Coon and Mr Kittiwat at the launch of XS Zero energy drinks.

Amway Thailand Ltd is making a foray into Thailand's 30-billion-baht energy drink market with yesterday's launch of the direct sales company's own product.

According to Kittawat Ritteerawee, the company's managing director, Amway's XS Zero is aimed at young and active consumers, with zero sugar and calories as the energy drink's selling point.

The company hopes the introduction of XS Zero will rejuvenate Amway's brand image and appeal to new-generation and active consumers.

"Energy drinks are a very attractive market because the market size is big, with an estimated 30 billion baht a year and average annual growth of 3%," Mr Kittawat said. "Amway is fully aware of the notable growth in this market, and many brands are eager to make their name in the premium energy drink category -- a segment with a proportion of 4% or 1.2 billion baht of the total."

According to Mr Kittiwat, energy drinks are now the choice of working-age adults and adolescents, unlike in the past when they were generally associated with people who do manual labour.

"The launch of XS Zero should reshape Amway's brand image in the minds of new-gen consumers with new dynamism," Mr Kittawat said, adding that the company sees ample opportunity in the energy drinks market based on various projections of consumption trends among youth.

According to Mr Kittawat, 40 million baht will be spent on marketing activities targeting active and young consumers.

Michigan-based Amway acquired the XS Energy brand, co-founded by former Amway business owner David Vanderveen, in 2015. The deal expanded the brand's geographic reach and advanced Amway's strategy of connecting with young entrepreneurs.

XS has carved a niche by appealing to younger consumers through wildly successful parties, a focus on adventure and the seamless combination of work and play -- traits that are increasingly essential for job satisfaction in the under-35 segment, Amway said.

The acquisition also linked Amway more directly to the rapidly growing energy drink segment.

XS's sales total about US$2 billion worldwide, with the US, Japan and China as the top three markets. XS has expanded to 55 countries.

"XS is very successful in all markets around the world, particularly China, when we launched in that market last year, with sales reaching 1 million cans within three minutes," XS co-founder Scott Coon said. "We also hope for a warm response from Thai consumers and aim to make Thailand the largest market in Southeast Asia."

Ratana Channara, Amway Thailand's marketing director, said the company is confident that XS will be welcomed warmly by consumers, with sales estimated to reach 300 million baht by the end of the year and expected to grow by 25% next year.

Amway reported total sales of 18.5 billion baht from September 2017 to August 2018, about 3% higher than in the year earlier period.

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