Pepsi aiming to take back cola crown from Coke in Thailand

3_Pepsi4A new round in the global cola wars is set to start with Thailand as the battleground as the local unit of Pepsi Cola said last week it is aiming to recapture the top spot from Coca Cola in the Kingdom after recently opening its second factory in the country that will result in an increase production.

“The challenge is to make the Pepsi brand the market leader again within three to five years,” said Somchai Ketchaikosol, marketing director for Pepsi Cola (Thailand).

It’s a challenge Pepsi has taken on before in Thailand, and succeeded in coming out on top. While Pepsi trails Coca Cola in market share and sales at home in the United States and around the world, Thailand was one of the few countries where it had consistently been the leading cola brand during the past few decades. Just a few years ago, Pepsi commanded as much as 51 percent of the Thai cola market, with Coca Cola trailing with roughly 42 percent.

Then the soft drink saga went sour for Pepsi. Relations with its long-time Thai partner Serm Suk, a bottling and distribution company, ruptured after Thai Beverage, a local conglomerate, purchased a large stake in Serm Suk. In 2013, Pepsi and Serm Suk parted ways, with the bottler launching its own brand named Est cola. Pepsi’s market share fell to as little as 15 percent in 2013. Coca Cola seized the opportunity, filled the distribution void and took the lead.

But Pepsi, a multinational beverage, food and snack company with 22 flagship brands and over $63 billion in revenues in 2015, regrouped and began battling back.  In February it opened its second bottling plant in Thailand in Saraburi province that will supply the northern half of the Kingdom with its products, and has worked hard to rebuild its logistics and distribution networks.

Pepsi’s market share in the cola segment improved to 35 percent in the first half of 2016, up from 33 percent last year and 30 percent in 2014.

While it claws its way back towards the top of the Cola division, Somchai said Pepsi will introduce some of its other brands to ensure the company’s stability in the Thai market through diversification.

Last week, the company expanded its presence in the drinking water market by introducing Aquafina Vit Zaa sparkling water to tap the emerging hydration drink segment. The company said the new product launch reflects its strategy of delivering sustainable growth by capitalizing on health and wellness trends.