PepsiCo expands 'healthy' drinks portfolio

PepsiCo expands 'healthy' drinks portfolio

Mr Charonchai (left) and Mr Somchai. The recent sugar tax will affect some products.
Mr Charonchai (left) and Mr Somchai. The recent sugar tax will affect some products.

PepsiCo Services Asia Ltd, the marketer of Pepsi, Mirinda and 7 Up, is looking to enlarge its portfolio of healthier products as part of Pepsi-Cola's 10-year strategic plan, in line with the government's low-sugar policy.

Somchai Ketchaikosol, the company's marketing director for beverages, said the company will promote sugar-free and low-sugar products this year to coincide with the parent group's 2016-26 business direction, which focuses on three core priorities: improving health and well-being through the products it sells, protecting the planet and empowering people around the world.

The company has seen sharp increases in demand for healthier soft drinks, and the sales contribution of these products has risen to 10% of the company's product portfolio.

"Our sugar-free cola drink sales grew by 50% over the [first 1.5 months] in 2018, and the increasing demand is expected to be sustained this year," Mr Somchai said.

Asked about the impact on Pepsi from the government's policy to raise the sugar tax on soft drinks that contain 10-14 grammes per 100 millilitres in October this year, Charonchai Salyapong, corporate affairs director of Suntory PepsiCo Beverage Thailand Co, the bottler of Pepsi products in Thailand, said the higher tax is likely to affect the price structure of some products.

But he noted that the company already adjusted operations to cope with the new sugar requirements two years ago.

"We have to keep our soft drinks within 10-14 grammes of sugar per 100 millilitres and pay a higher tax to the government because these are our core products," Mr Charonchai said.

Thailand's carbonated soft drinks market was valued at 50 billion baht in 2018, up 1.6% from 2017. Of the total, the cola segment was worth 35 billion baht, with 1.6% growth.

Carbonated soft drinks are the No.2 segment in the fast-moving consumer goods market, following drinking water.

Pepsi is the third most popular carbonated soft drink in Thailand after Coca-Cola and Est.

Mr Somchai said the increasing momentum has continued so far into this year.

"The carbonated soft drink market is likely to improve this year because the weather is hotter than expected," he said.

The company will allocate 250 million baht to promote sales this summer season. The activities include the Pepsi Music 2019 campaign, targeted at the 17-22 age bracket.

The campaign will focus on five key elements: media integration, unexpected music experience, superstars as authentic brand ambassadors, innovative packaging and fashion collaborations with global lifestyle brands.

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