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Published on April 8, 2008

It aims to push up local consumption by 30 per cent and it is targeting sales to grow by 20 per cent this year.

Prasopsuk Suttapirom, Nestle's business executive director, said the rise in coffee drinkers here should match the global trend, which grew 20 per cent last year.

"We expect growth will be driven mainly by marketing activities," he said.

Nescafe's latest campaign will spend Bt200 million on the launch of its "Red Cup" instant coffee.

Its beans are roasted by using a technology called "Enhanced Recovery Aroma" or ERA.

To build awareness, it will employ television advertisements from this month onwards.

The whole coffee market is currently worth Bt20 billion with.all segments seeing sizeable growth.

Nescafe corners 90 per cent of the instant coffee market and 60 per cent of the "three-in-one" segment.

Nescafe said there was a possibility of a shortage in raw coffee beans.

Prasopsuk said current production was only 40,000 tonnes per year, which would not be enough to serve the company's projected high demand.

It had already petitioned the government to expand the imported quota for raw materials from the current 5,000 tonnes per year.The issue is still under consideration.

Another problem has been the 90-per-cent hike in tariffs for imported coffee beans -  tariffs meant to protect Thai coffee growers.

However, the firms feared it would have a negative impact and slow consumption.

The purchasing price of raw coffee has also risen from Bt50 per kilogram last year to Bt70 today.

Local production has also been curbed with some coffee growing areas shifting to cultivate palm and rubber instead.

Nitida Asawanipont

The Nation