Nestle takes total control
Local arm takes over marketing, distribution of ready-to-drink products
Nestle (Thailand) hopes to grow faster after taking responsibility for distributing and marketing its Nescafe ready-to-drink coffee products from Thai Pure Drinks, Haad Thip and Business Partners Worldwide (Thailand).
Nestle (Thailand), a subsidiary of the giant Swiss food and beverage company, has taken total control of distribution and marketing of its Nescafe ready-to-drink coffee from business allies.
Pattanai Luangtrakul, category business manager for ready-to-drink pro-ducts at Nestle (Thailand), yesterday called the move part of global policy to allow Nestle greater flexibility in setting strategies for responding to local market movements. Thailand is the first country to apply the change, and the company expects to be able to adapt more rapidly to changes in the behaviour of Thai consumers in the ready-to-drink coffee market.
Distribution used to be the responsibility of Thai Pure Drinks and Haad Thip, while marketing was conducted by Business Partners Worldwide (Thailand), a 50:50 joint venture between Coca-Cola and Nestle. Pattanai said these partners would be free to concentrate on other responsibilities.
Nestle has two main products - Nescafe Cappuccino and Nescafe Protect - with a 31-per-cent share of the Bt8 billion ready-to-drink coffee market, Pattanai said. The company expects at least to maintain its No-2 market position by achieving sales growth at the same rate as market growth, or 5-7 per cent. There are more than 40 brands in the market.
Pattanai said although Nestle might not have the same large number of trucks for distribution like Thai Pure Drinks and Haad Thip had, it did have 25 distributors nationwide and a strong relationship with both traditional and modern trade outlets. Initially, it will maintain its large number of selling points and then add more distribution channels later, particularly in the Northeast and South.
While Pattanai did not specify a marketing budget for Nestle's ready-to-drink products, she said it was part of Bt1 billion the company planned to spend on marketing and advertising all of its coffee products, including ready-to-drink, instant and 3-in-1 coffee. The company will launch a big campaign for its ready-to-drink coffee over the next three months.
She said Nescafe enjoyed strong brand awareness among consumers, particularly university students, working people and transport-industry employees who must drive long distances.
At present, the company does not have any investment plans but is looking for opportunities to develop new products to serve its targeted consumers.
Nestle expects its sales to grow 20 per cent during the current hot season.
The total coffee market in Thailand is worth Bt20 billion. Of this, Bt8 billion is from ready-to-drink products, Bt8 billion from instant coffee and Bt4 billion from 3-in-1 coffee. As well as 31 per cent of the ready-to-drink market, Nescafe holds 90 per cent of the instant-coffee market and 60 per cent of the 3-in-1 market.