CEO Tan Passakornatee of the Oishi Group, which manufactures the Oishi brand green tea, executive director Theerawat Louhapan of TAC Beverage Co Ltd, which manufactures Zenya, and managing director Somchai Wachakorn of European Food, manufacturers of Tozen, all believe the market will start to grow at 15-20 per cent from next year.

They agreed the market will grow at a strong pace and expected no one to launch "big-bang" promotions as was the case in the past two years, which saw explosive growth.

The green-tea market has emerged in Thailand in the last four years and made a strong impact among consumers soon after.

The market exploded in the last two years when some major players, led by Oishi - the market leader with a 40-per-cent market share - staged big-bang promotions to attract consumers. As a result, green-tea sales grew by over 100 per cent in two consecutive years.

Theerawat and Somchai said the explosive growth was unnatural. Consumers bought the product just because they wanted to win very big prizes in the campaigns. The growth was not a result of real consumer demand. When no company launched that type of big promotion this year, the market was flat at approximately Bt5 billion.

However, Oishi's Tan rejected the idea that big promotions were the major reason for the explosive growth. He said the stagnation was caused by intense competition by many, mostly small, newcomers. There were over 40 players until mid-year, then they gradually disappeared from the market after failing in a price war. He said the battle was intense during July and August, which was the same time the Commerce Minister asked all green-tea manufacturers to decrease the price from Bt20 to Bt15.

The three executives insisted the market has not reach saturation point yet. Comparing Thai consumption with that in some other countries, Tan said Thailand has over 60 million people but consumption per year was only 100 million litres. Japan has 127.76 million people and its consumption was 3 billion litres per year while Taiwan has 20 million people and consumes 300 million litres per year.

Theerawat said the green-tea market is categorised into three segments - original, functional and fruity segments.

Almost all makers will continue to focus on their selling points next year, which were initiated when the brands were established.

Oishi focuses on "wellness". Unif focuses on "all the best tea leaves have already been put in". Puriku says it carefully selects white leaves for its products. Moshi focuses on emotional marketing with its Moshi Maru icon.

TAC itself focuses on "fashionable and trendy but healthy" green tea. It has allocated Bt40 million as marketing budget, rising from Bt30 million this year. Its variety of colours blending with fruit ingredients on shelves will help its target customers, aged between 18 and 25, grasp a clearer picture of the concept.

Theerawat believes its ZenYa will achieve Bt140 million in sales.

Tan from Oishi said the market will see no price war because only major brands now exist. Players will focus on building brand awareness. Oishi itself will also focus on strengthening its brand awareness and launching new packages that keep the brand looking modern to keep its market-leader position. The marketing budget for next year is Bt400 million to Bt500 million.

Somchai said players next year will tend to compete in launching new flavours and new packages.

Nitida Asawanipont

The Nation