RC Cola to introduce OEM business to cover variety of soft drink

RC Cola has recently introduced its new business line as an OEM. Presenting itself as one of the leading manufacturers of cola flavored soft drink, its production capacity and know-how has now been offeredto cover other kinds of soft drink. This has brought about an interest from both local and international brands. At the same time, RC Cola has introduced its new product “MaxiŽ”, honey lemon soda drink, to serve the health & wellbeing trend before going forward with the plan to develop new categories to maintain its market continuity while for cola drink, the time for securing the 3rdrank in the market may be extended as glass-bottled drink trend has been slow down resulted in less sales volume.

Cola drink market has been facing intense competition while market condition changes all the time. This has made RC Cola to review its target from time to time. However, Sakol Beverage has in turn found its own strength in terms of production, know-how, facilities and experienced personnel all of which can help the company find alternate business opportunity.

Production to order for 16 Brands

Mr. ChakritAtsavavasin, Senior Marketing Consultant of Sakol Beverage Co., Ltd., the manufacturer and distributor of RC Cola said to Prachachart Business that for the past 2 years, the company has rebranded and invested more in RC Cola brand awareness activities especially among the young generations, it has also been interested by other companies who want to market soft drinks and asked to manufacture the products for them as OEM. Presently, the company offers OEM services to more than 16 brands,both local and international.

As a promising market gap as most of soft drink facilities in Thailand are not interested in manufacturing products for other brands but Sakol’s facilities has been manufacturing soft drinks under brand RC Cola for more than 40 years, its world class standard facilities and technologies can support almost all kinds of soft drink including soda drinks, energy drinks etc. Its production know-how has made it possible for the company to provide one stop service with valuable consultation on formula or taste and flavor development

Health Drinks; new business line

With its current production of approximately 8 million cartons per year or around 70% of total production capacity, there is a pretty wide gap to meet. By the end of this year, the company expects to be ready for OEM service for another 2-3 brands. Last year the company enjoyed double growth rate with sales volume for as high as 80 million baht and it has been predicted to maintain this momentum.

Also, the company views this situation as an opportunity to launch new business line to meet health & wellbeing trend among the consumer group. Early in this year, the company launched Maxi, a 400-ml honey lemon soda drink priced at 16 baht. This new product has been introduced via Seven-Eleven and soon in Lawson and Family Mart. New categories are expected to launch in the following year.

Balancing glass and PET bottle

Regarding its core business, RC Cola has been affected by continual shrinkage of demand for glass bottled products. Before rebranding, the company’s sales volume came from glass bottled products for 100% which were distributed in traditional trade only. After rebranding, the company has added SKU PET bottle and can to be distributed in modern trade channel as well as convenient store e.g. Seven-Eleven, Lawson, 108 etc.

Although PET bottle in modern trade channel were well responded and could help balance shrinkage of glass bottle demand (dropped to 65% of the total sales volume), but the targeted growth rate could not be achieved including the one to move the company to become the 3rd rank in this over 50 billion baht market within 1-2 years after its rebranding in late 2015 and such goal is expected to be achieved in another 3-5 years from now.

Focusing on profitable areas

Mr. Chakrit further added that the company’s strategy on cola drink will shift from advertisement to point of sale promotion where the sales volume can be more clearly realized. The budget for this campaign is 7 million baht per year with a view to maintaining the proportion of glass bottled product sales as glass bottled gives better profit than PET bottle. By 70 cash vans and 5 distribution centers, these can enable us to cover more than 60,000 shops in Bangkok and Central Region.

The reason we have not yet move to other regions is that we want to focus on the areas that we can fight well at the price that values for money, proactive sale force and distinctive taste. Although we are not a big name in the market but the sales volume is not the only one that count for success. Profit is good but we don’t want to be a Loss Leader.Ž

However, the sales volume of the past year was 850 million baht or 10% in revenue growth and the company expects the continual growth from OEM business.

We thank the “prachachat.net” webfor reporting the updates from Sakol Bottling Co., Ltd.

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