Non-dairy creamer maker plots expansion
Preserved Food Specialty Co, the maker of Coffee Dreamy non-dairy creamer, plans to ask the Board of Investment for promotional privileges to expand production capacity at PFS's factory in Samut Sakhon.
General manager Panu Mahattanobol said the company plans to invest 500 million baht to install new machines at its factory in Samut Sakhon in the fourth quarter of 2019. With this, production capacity will double to 300 tonnes a day.
The additional capacity will be used to make new non-dairy creamer products to serve the domestic and export markets, especially Taiwan.
At the same time, the company plans to spend a further 300 million baht to build an extraction facility for rice bran oil. The new factory will begin operations in 2020.
"Non-dairy creamer is considered a product that is not good for health," Mr Panu said. "Therefore, we will gradually improve the image of our non-dairy creamer with a new formula made from rice bran. This will be an alternative non-dairy creamer for health-conscious people."
According to Mr Panu, the market for non-dairy creamer in Thailand has grown slowly over the past several years on declining consumption of coffee at home and in the office.
Consumers have also shifted to 3-in-1 instant coffee, while the price of coffee at cafes has declined to 35-40 baht a cup.
Nonetheless, sales of Coffee Dreamy have bucked the broader trend, with revenue this year expected to manage growth of 7% to 750 million baht.
The business continues to grow because PFS sells 98% of its product to coffee shops, bubble tea chains and other such outlets.
"The bubble tea market has slowed in the last few years, but it fortunately it has turned popular worldwide again this year," Mr Panu said. "This benefits very much the company's non-dairy creamer products."
According to Allied Analytics, the bubble tea market is worth about 65 billion baht worldwide and is estimated to increase to 100 billion baht by 2023.
Kasikorn Research Centre said Thailand's bubble tea market was worth 2 billion baht in 2016. There are numerous large and small bubble tea chains in the country, including the Ochaya brand with 360 points of sale.
"In overseas markets, particularly Taiwan, bubble tea is consumed in place of carbonated soft drinks, and we believe this trend may happen in Thailand," Mr Panu said.
PFS will beef up its business supplying the modern trade channel in the year ahead. The company started selling its non-dairy creamer at modern trade outlets two years ago.
The market size for non-dairy creamer is about 6 billion baht annually in Thailand.
Mr Panu said PFS will tap the bakery market and make food supplements to serve the medical channel.
The company will also join with partners from Australia, South Africa and China to make ingredients for powdered baby formula for sale in both domestic and overseas markets.