Green-tea giants poised to flush rivals off the shelves
The Bt6-billion bottled green-tea market will soon be controlled by just a few major brands, marketing analysts agree.
Currently, Oishi, Unif, Moshi and Sencha control more than an 80 per cent share of the market, and may force smaller players out due to their strength.Thailand's green-tea market has grown dramatically from only Bt400 million four years ago to more than Bt6 billion last year. Over the past two years, however, the number of players has declined from more than 40. Many firms entered the market at its peak, expecting to tap into the iced-tea boom and the trend towards healthier living. "This year will be the last war for green-tea brands and many players will sell their products at cost or below cost to push other products off the shelves. We will see green tea selling at a price less than Bt15 a bottle this year," said Tan Passakornnatee, founder and chief executive of Oishi Group Plc, which controls more than 60 per cent of the green-tea market. Oishi charges Bt20 a bottle for its teas. "The number of green-tea players is expected to decline to only three to five brands next year, similar to green-tea markets in other countries," said Tan, adding that the company expected to increase sales by at least 20 per cent this year. Supat Tansathitikorn, honorary president of the Marketing Association of Thailand, said the green-tea market was fragmenting and the only factors for success were superior quality and perceived health benefits. "The brands that stick to good quality and taste will be recognised by local consumers and enjoy sustainable growth," said Supat. "They will then reinvest some profits into marketing activities and gain a greater market shares. The situation will lead to only few major players in the marketplace." He said that it was normal for other players to follow a leading producer that introduced a new and successful product. After that the market usually becomes fragmented, resulting in a shakeout that forces weak brands out of the picture. Strong companies may even take over weaker brands. "As a result, the market will be under an oligopoly," said Supat. He added that green-tea firms should focus on medicinal research to find out the real health benefits from consuming green tea. Companies could use this information in their marketing to create product credibility and trust. "When consumers have strong loyalty to your product based on its real quality, your brand will enjoy a long lifecycle," said Supat. Kwanchai Rungfapaisarn, The Nation
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