Boonrawd Trading Co, the distributor of Singha beer and drinking water, has terminated sales of unprofitable Syder Bay cider and Sanvo sports drink and shifted focus to beefing up sales of premium beer products.
According to Purit Bhirombhakdi, the company's chief executive, the company stopped marketing Sanvo sports drink and Syder Bay, a ready-to-drink cider with 3.5% alcohol content, late last year because the two products presented less of a market opportunity.
The market size for both sports drinks and alcoholic cider are relatively small at 4-5 billion baht a year, Mr Purit said.
Thus it was an unattractive proposition to continue marketing the two products, he said, adding that competition in the sports drink market is high and the Sponsor brand, the market leader, has a strong business and customers have been found to have high brand loyalty for Sponsor products.
Singha Corporation, a sister company of Boonrawd Trading, launched Syder Bay in 2014 as an alternative for beer lovers. Cider was a rising trend among drinkers in the US, Europe and Asia during that period.
"The market size of cider is small, and the market's response was not good as expected because of Thailand's legal limitations on commercial advertisement of alcohol products," Mr Purit said. "We've decided to stop the sales of these two brands purely because they did not make a profit."
The company also stopped marketing B-Ing functional drink and Mochi ready-to-drink green tea over the past few years.
Mr Purit said that given the growing challenges from disruptive technology, the company has also prepared itself to cope with change by utilising staff more efficiently and seeking new business partners to strengthen the product portfolio and make the business more profitable.
Sales at Boonrawd Trading were 118 billion baht in 2017, slightly increasing from a year earlier.
High household debt, the overall economic downturn and a saturated market for beer were the key contributors dampening Boonrawd's sales growth.
Mr Purit forecasts that consumer spending power in 2018 will be better than last year, as indicated by shopping spending during the first month of the year.
Boonrawd expects sales to reach 120 billion baht this year. Sales growth will be driven by the three core business of beer, soda and drinking water.
The company is also committed to extending its product portfolio via its own brand and joint ventures.
Of the total 120 billion baht in sales this year, 80% will come from alcohol products and the remaining 20% from non-alcohol business.
Sales volume of Singha beer reached 1.32 billion litres in 2017, and Boonrawd aims to sell about 1.4 billion litres this year.
The market size of Thailand beer was 200 billion baht in 2017, 3.8% higher than in 2016.
Singha aims to increase its beer market share to 65% this year from 62% last year.
"We are also interested in marketing super-premium beer for the niche market this year," Mr Purit said. "Although the market size of super-premium beer is only about 100 million baht, it has huge growth potential to grow."