Thailand: Beer market expected to fizz this year

Thailand’s beer market is expected to fizz this year, boosted by optimism after sluggish sales in the last four years, the Bangkok Post reported on November 26.

Teerapat Pongmaytee, marketing manager of Thai Asia Pacific Brewery Trading Co, the marketer of Heineken beer, said the domestic beer industry was flat during 2016-2017, and sales contracted by 4% to 140 billion baht last year.

"The market has seen signs of slight improvement, with the launch of new products by major players this year," he said. "Heineken beer sales increased during the first 10 months of this year."

Mr Teerapat predicted Heineken sales growth of 9% this year, outpacing a projection of 4% growth for the premium beer market.

The company expects the overall beer market to grow by 2% this year to 143 billion baht. Of the total, 6.24 billion baht is for premium beer. Heineken is the market leader in the premium beer market, controlling a 79% market share in 2018.

Krungsri Research reported the domestic beer market is dominated by the duopoly of Boon Rawd Brewery, producers of Singha, Leo and U Beer, and Thai Beverage, which produces Chang, Leo, Archa, and Federbrau.

These corporations are both highly competitive organisations and enjoy significant advantages in terms of capital base and distribution channels, resulting in a combined 93% market share of the Thai beer market (by volume).

Krungsri reports domestic demand for beer was forecast to grow an average of 2-4% per year from 2019-2021.

The segment will be helped by an improving economic outlook and marketing drives during major sporting events, helping to boost sales in restaurants and pubs, bars and other entertainment sites.

Craft beers are becoming increasingly popular and large Thai breweries have responded by beginning to brew craft beers of their own in-country.

Breweries are also introducing new product lines with reduced alcohol content and serving sizes in response to changes in taxes to keep retail prices low.

Some consumers are showing a greater interest in their personal health and this will mean low- or no-alcohol beers, a new market segment becoming more prominent worldwide, will take on greater importance and may steal market share from traditional beers, said Krungsri Research.

To capitalise on improving sentiment, Thai Asia Pacific Brewery Trading plans to increase its spending on marketing during New Year celebrations.

On November 25 it unveiled "The Heineken Star Celebration", which includes a Heineken flagship store at Quartier Avenue, the ground floor of EmQuartier mall, from Dec 6 to Jan 5, 2020.

Pop-up stores are planned for 12 major cities nationwide, including Chiang Mai, Phuket, Rayong, Udon Thani and Phitsanulok.

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