Doi Kham Food Products Co, a manufacturer and distributor of fruit juice and dried fruit, has expanded its business to tap into Thailand's 15-billion-baht ice cream market to offset a continual decline in fruit juice demand.
Chanannat Polpathapee, the company's executive vice-president for sales and marketing, said the Thai market for fruit juice, especially in the middle to premium segments, has fallen by an average of 5-10% per year over the last several years, tallying 4.5 billion baht in 2022, down from about 10 billion baht a year over the past decade.
Ms Chanannat said the market is likely to continue falling because people have more beverage choices available in the market, particularly functional drinks which come in different formats and flavours.
A collaboration with Wall's ice cream two years ago led the company to decide to make its own ice cream, she said.
"We studied the ice cream business for more than two years. The pandemic caused our business plan to be postponed," said Ms Chanannat.
Pipatpong Israsena Na Ayudhya, the company's president and chief executive, said the pandemic affected many business sectors, but not ice cream.
Three Doi Kham ice pops were launched in the middle of last month. The firm's ice creams are produced from real fruit at its Mae Chan factory in Chiang Rai with environmentally friendly packaging. The firm plans to add new products in the second half of this year.
"Doi Kham Ice Pop is a niche product. It is ambience ice cream that can keep at a regular temperature, not frozen ice cream as seen generally. We want our ice cream products to be a new alternative for generation Z and Y customers, who look for the fresh product with convenience," Ms Chanannat said.
Doi Kham ice cream is sold at over 30 Doi Kham shops and 14 franchises, as well as various modern retail chains including Tops, Lotus's, Big C and Makro. It will be available in 7-Eleven convenience stores next month.
"Doi Kham Ice Pop will be our growth engine that can offset the declining fruit juice," Ms Chanannat said.
Given the positive response to ice cream in China, South Korea and Vietnam, the company participated in an international trade fair in Japan in March this year to promote its Doi Kham Ice Pop. It will be possible to export Doi Kham ice cream overseas this year.
The company expects sales of Doi Kham ice cream to be 50 million baht this year and reach 600-700 million baht in the next seven years, including export revenues.
According to Ms Chanannat, as demand for fruit juice products remains in decline, the firm will explore market opportunities from new product categories that respond to new-generation customers in the second half of this year.
Moreover, it will extend business to B2B channels such as hotels, restaurants and catering, and is conducting a feasibility study to launch its sister brand for new products that can access all customers' lifestyles.
The firm expects its sales this year to reach 2.2 billion baht, up from 2.06 billion baht in 2022.