Energy drink consumption is forecast to decline in the last half of this year.

Energy drinks market to lose its buzz

By Thai Day

17 July 2006

The domestic market for energy drinks will grow at a slower rate in the second half of 2006 than in the first half and manufacturers should try to improve their product?s image and focus more on foreign markets in order to expand their customer base, a survey by KResearch has found.

The energy drinks market, which predominantly targets manual workers, grew at what was considered a satisfactory rate in the first half of this year, said the research arm of Kasikornbank. From the start of the year until April, 265 million liters of energy drinks were sold, a 13.7 percent increase on the same period last year.

Though figures for May and June were still unavailable, first-half success was thought to be partly aided by increased consumption during the World Cup soccer tournament. Also, a high volume of transport activity during the period was seen as boosting sales, as truck drivers are among major consumers of the drinks.

However, expansion of market value was found to be less than that of the sales volume. The reduced increase in sales figures was caused by discount incentives for retailers as manufacturers competed for market share.

Prospects for the energy drink market in the second half of the year were expected to be dull in line with overall economic growth projected for the period.

A number of factors were named by KResearch as possibly contributing to a downturn in energy drink sales.

Oil prices and political uncertainty were cited as being likely to reduce domestic consumption.

Also, the rainy season delays transportation and construction work, resulting in the employment of fewer laborers who would otherwise buy the drinks.

KResearch estimated that the energy drinks market would expand less than five percent overall this year.

To counter this, the think tank offered manufacturers some market stimulation strategies.

It suggested drinks producers improve the image of their product to try and show that their drink not only provides energy.

Instead, they should organize or sponsor music and sporting events as well as redesign their labels to attract teenagers and young workers.

This strategy would help manufacturers to expand their customer base from blue-collar workers to the younger generation.

Manufacturers should also pursue overseas markets as Thai energy drinks are well-known internationally, with some Thai brands already dominating the European market.

Also, they should capitalize on the fact that energy drinks are considered trendy beverages in entertainment venues worldwide. Both these factors could be used to increase exports by Thai producers, said KResearch.

Thailand is the ninth biggest energy drinks exporter in the world and the largest in Asia, exporting products worth US$98 million each year.

Thai manufacturers even outperformed their Chinese counterparts, who ranked 11th.

Thai Day

I am sometimes an occasional drinker of "sponsor" sponsor is a Thai sports drink, but any others such as redbull etc, i usually wouldnt go near in my own country let alone in Thailand. A good frind of mine used to pee out blood from drinking too much. A real health concern in my opinion.