Vitamin waters are giving rise to a new multi-billion-baht beverage market, becoming a champion product during the pandemic while other beverages, including juice, bottled water, milk, sports drink and ready-to-drink green tea, still suffer from tepid demand.
Vitamin waters are widely available at convenience stores.
The speed of growth for vitamin waters has been astounding. The market value of vitamin water jumped from 100 million baht in 2018 to 1.06 billion baht in 2019 and an estimated 3.5-5.5 billion in 2020.
More than 10 players have been vying for this lucrative market, including Yanhee, B'lue, Vitaday, Ichitan, Aqua-Vit, Dr.J and Purra of Singha Group, the latest brand to jump on the bandwagon a few weeks ago.
Nestle, a Swiss food manufacturer, said it is also exploring a business opportunity in vitamin water.
International vitamin water brands have been imported to the Thai market in the past several years, but they remain unsuccessful because of relatively high prices.
The government's policies to promote lower sugar content in drinks with favourable tax incentives are credited with boosting the growth of low-sugar beverages, with vitamin water a major beneficiary.
A marketing analyst who requested anonymity predicted the popularity of vitamin water to continue growing for at least two more years if all players keep up active marketing promotions. The intensifying competition will help drive this category growth, build awareness and lead to product trials, he said.
The source said the past five months have been an active period for this market, with many new vitamin players starting to sell.
Yanhee launched Yanhee Vitamin Water, while Srinaporn Marketing entered the market with Aqua-vitz by Jele brand.
Ichitan Group launched Ichitan Vitamin water C plus E, augmenting its existing vitamin water portfolio. Singha debuted its Purra brand vitamin water during this period as well.
"While many players have marched into this market, vitamin water is not yet considered a red ocean market. With health benefits the main selling point, we expect demand for vitamin water will continue to grow in a sustainable manner over the next five years," said Tan Passakornnatee, chief executive of Ichitan Group.
Ichitan expects sales of vitamin water to reach 400 million baht this year, reaching 1 billion baht next year.
Mr Tan expects the overall vitamin water market to grow by 200-300% in 2020 year-on-year and maintain momentum next year if more competitors enter the market.
Anek Lapsuksatit, chief financial officer at Sappe, the marketer for Sappe Beauti functional drinks and the producer of B'lue vitamin water, said the "water-plus" market has been prevalent in Thailand for a decade.
Sujarit Mayalarp, managing director at CPF Trading, promoting the new Innoweness functional drink at the Thaifex trade fair.
Thais enjoy sweetened drinks and water-plus offers an alternative that lies between sweetened beverages and drinking water, he said.
According to Mr Anek, the lower excise tax rate on functional drink products (from 14% to 10%) and on fruit and vegetable juices with health benefits (from 10% to 3%), effective from October this year, helped drive the water-plus segment to grow and lured existing manufacturers to produce more functional drinks and fruit and vegetable juices with health benefits.
The lower tax rates also drew new players to enter this drink segment.
"Thais have become more conscious about their health. They drink more water, but the taste is not appealing. Juice, soft drinks and other ready-to-drink refreshments are very sweet, making vitamin waters a viable alternative because of lower sweetness, no calories and healthiness," he said.
"The pandemic is a catalyst for the huge growth of vitamin water this year, with momentum expected to be maintained over the next few years."
Mr Anek said the company is always looking for ways to improve its vitamin water, particularly for innovative products to increase customer satisfaction.
At least 20 new health products are slated to be launched next year to boost sales, he said.
Titiporn Thammapimookkul, chief marketing officer at Boon Rawd Trading, the sales and marketing operator for Purra drinking water, said the company began sales of vitamin water at the end of October this year, targeting customers aged 20-35.
"We monitored the market for one year before entering. Market demand for vitamin water continues to increase because people believe vitamin water can boost their immune systems," he said.
The company believes vitamin water may cannibalise mineral water demand to a certain extent.
"We monitored the market for one year before entering. Market demand for vitamin water continues to increase because people believe vitamin water can boost their immune systems." — Titiporn Thammapimookkul, Chief marketing officer, Boon Rawd Trading
According to Mr Titiporn, Purra vitamin water will be sold exclusively at 7-Eleven convenience stores for three months before being made available through various distribution channels. Purra combines vitamins C and B in the same bottle, while other competitors bottle their vitamins separately.
"As the market leader in drinking water and mineral water, we have a relatively large customer base and we believe Purra fans will shift to drink Purra vitamin water, helping us become the market leader in the multi-billion-baht Thai segment in the first year of operations," he said.
Chinta Srichintangul, executive director of retail measurement for Nielsen Thailand, said the consumption of vitamin water in the first 10 months grew by 94%, with the outbreak a major reason for the consumption surge.
The vitamin water segment in the same period has increased to 7% of total non-alcohol beverage sales, compared with only 3% in the same period last year.
Vitamin water drinks are consumed throughout the country. The products are available at various channels, from convenience stores, supermarkets, beauty stores, sports clubs, mom-and-pop shops to online channels.
Vitamin water comes in several flavours. The majority of consumers in Thailand buy vitamin water based on nutritional value, with taste another main determinant.
"Vitamin water has seen continuous growth since 2018 because people want to build their immune system at an affordable price, particularly amid the pandemic. This is also in line with the 'food is medicine' trend," Ms Chinta said.
Consumers are simply looking for products to better their lives, she said.
Dr Supoj Sumritvanitcha, the owner of Yanhee Hospital, said initially Yanhee vitamin water was launched to address demand from patients who don't like to take vitamin tablets after receiving treatment at the hospital. Yanhee vitamin water sales were relatively thin the first five years after the product's launch.
"The popularity of vitamin water has peaked the past two years," Dr Supoj said.
Yanhee vitamin water sales grew by 15-20% in the first 10 months this year, with figures expected to grow over 10% next year.
To boost sales, the company plans to launch new bottle sizes to the market in March next year as well as extend distribution channels to reach a wider customer base.
Yanhee also wants to launch other nutrient-rich beverages such as protein drinks, he said.