Pepsi and Suntory join forces to conquer Thai market

The Pepsi Cola brand is ready to battle its way back for a bigger share of the Thai market as parent company PepsiCo Inc. forged a joint-venture agreement with Suntory Beverage and Food of Japan to establish a new firm in Thailand with the goal of conquering the carbonated beverage market in the Kingdom, the companies said last week.

The new firm named Suntory PepsiCo Beverage (Thailand), or SPBT, “marks a new chapter for the Pepsi-Cola brand in Thailand and hopes to create more excitement for the country’s [$4.9 billion] beverage industry,’’ said Omer Malik, the new company’s general manager.

SPBT now serves as the producer and distributor of PepsiCo beverage brands, including: Pepsi-Cola, Mirinda, 7UP soft drinks, ready-to-drink Lipton teas, Gatorade sports drink, and Aquafina hydration drinks. The company also plans to begin offering products from Suntory to Thai consumers, including new products, at some point in the future.

“The alliance is intended to combine the strengths of both global powerhouses, with an ultimate goal of achieving the No.1 leadership position in Thailand’s [$1.6-billion] valued carbonated soft drinks category, and creating new growth opportunities by expanding our beverage portfolio to meet consumer demands, ranging from hydration to sports drinks, ready-to-drink teas and coffees, bottled water, and juices to a variety of innovations in the future,” Malik said.

Forbes business magazine said that Thailand’s beverage market is one of the largest in Southeast Asia and is set for continued solid growth. Reporting on the joint-venture in Thailand, the magazine said that Suntory paid “$289 million to acquire a 51 percent stake in International Refreshment, which is owned by Pepsi. The two companies have an established record of working together successfully in other markets, including the United States, Japan, New Zealand, and Vietnam.”

The new company benefits Suntory in that analysts believe its products have reached market saturation in its home country of Japan, and so the firm is looking for growth opportunities abroad. The new joint venture fits into that strategy.

Pepsi Cola was the leading cola brand in Thailand for many years until they eventually split. The Thai company launched its own cola brand and Pepsi lost its Thai market lead to Coca Cola, which still holds the number one position in sales.

However, “PepsiCo already [has] solid footing in the market, with a strong brand equity, manufacturing facilities, and an established sales network,’’ Forbes wrote, signaling that in a new round of the Cola Wars in Thailand, Pepsi can’t be counted out.

Photo courtesy of www.facebook.com/SPBTCompany/