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TheCorinthian

Wth Is This Est Cola Crap....?

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Here's an article I read recently with some little info on this. Looks to me to be another Thai copy stealing the info, recipes, marketing style, etc of a farang company, once again. Copy Cat Thais doing what they do best. Copying and stealing once they can get away with it. The glass bottle/plastic bottle argument is interesting as well. Thais do have certain preferences and beliefs and it is wise to remember that and cater to it. Interesting article.

 

Thailand’s Cola Conflict: Est vs. Pepsi

 

By Shane Danaher and Praj Kiatpongsan on 26.12.2012 at 3:34 pm


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"Some restaurant owners report that Serm Suk has simply stopped its weekly deliveries of Pepsi, and started in on deliveries of Est."

FEATURE – Nearly two months after the launch of soft drink upstart Est, Thailand’s soda giants are racing neck-and-neck for the country’s carbonated crown

Ramet Rattanakansang enjoys his soda. By the 36-year-old Bangkokian’s own admission, he drinks a bottle a day, and on Tuesday of last week, that bottle happened to hold 12 ounces of Thailand’s latest soft drink upstart—Est.

A syrupy brown cola, Est tastes somewhat like Pepsi, mixed with root beer and tempered with a gargantuan helping of sugar. The soda is scarcely two month old, but so aggressive is its marketing that Est is already being mentioned in the same breath as some of its most intimidating rivals.

“I still prefer Pepsi to Est,†says Ramet, “but I couldn’t find any Pepsi cans so I have to switch to Est for the moment.â€

Ramet’s brand dilettantism might represent a qualified victory for Est, but still, it can’t be anything but music to the ears of Serm Suk—the Thai bottling and distribution company that has wagered more than one billion baht in its bid to claim the top spot in Thailand’s soft drink scrum.

Serm Suk launched Est this November after breaking ties with Pepsi, the company for which it had served as the exclusive Thai bottler for more than half a century.

Talk of the companies’ parting first emerged in March of 2011, when Serm Suk revealed, in a statement to the Stock Exchange of Thailand, that the two had failed reach agreement on a new bottling contract.

Serm Suk, however, would remain Pepsi’s official, Thai bottler until the old contract expired on November 1, 2012.

Both Pepsi and Serm Suk have remained tight-lipped about the split, but rumors paint the circumstances as anything but amicable.

Some Thai commentators have speculated that the bad blood came on the heels of PepsiCo CEO Indra Nooyi’s crusade to assume ownership of all upstream and downstream portions of the brand’s global operations.

Conspicuously silent in the divorce proceedings has been Thai Beverage, the company that, in October of 2011, purchased 41.5% of Serm Suk’s stock from PepsiCo. The distributor of both Chang beer and Sangsom rum, Thai Beverage had, according to the Wall Street Journal, made the purchase in order to “expand its nonalcoholic production lines.â€

Whatever the cause, PepsiCo and Serm Suk, neither of whom responded to requests to comment on this story, ended their five-decade business relationship in November of this year. PepsiCo responded to the split by constructing its own, USD170 million (THB5.2 billion) bottling factory in the eastern seaboard industrial district of Rayong and enlisting DHL to help see to its distribution needs. Serm Suk, a full bottling and distribution network at its beck and call, hit the ground running.

On November 2, one day after the conclusion of its contract with Pepsi, Serm Suk launched its own soda—Est—and did so in high style.

The company announced plans to spend THB1.5 billion on advertising, launching a campaign that borrowed not only Pepsi’s red, white and blue color scheme, but also that company’s habit of enlisting Thailand’s top celebrities to get its message across.

Billboards featuring Thai pop icons Pakin ‘‘Tono’’ Kumwilaisuk, Sukrit ‘‘Bee’’ Wisetkaew and Pirat ‘‘Mike’’ Nitipaisalkul now compete for attention across Bangkok’s skyline with Pepsi’s SUV-sized renditions of Thai rock superstars Bodyslam. In scale, design and message, the two campaigns are so similar as to be nearly interchangeable.

And Serm Suk’s blitzkrieg isn’t confined to Thailand’s mental landscape either.

At Est’s November 2 launch, Serm Suk chief executive Somchai Bulsook, and Serm Suk president Dhitivute Bulsook (Somchai’s son), laid out their company’s ambitious goals for Thailand’s first, major-league domestic soda.

By the end of the year, Serm Suk hopes to have secured THB8 billion in sales, with the goal of turning Est into Thailand’s number one soft drink by 2015.

The company has at its command five bottling plants, 1,200 trucks and over 200,00 sales outlets. What’s more, decades of working with Pepsi have made Serm Suk uniquely versed in the vicissitudes of manufacturing, distributing and marketing a soda.

The only question now is whether or not Thais will get on board.

“I have to drink what I am offeredâ€

A quick survey of soda drinkers in Bangkok will reveal that, yes, Est is indeed being consumed right alongside its rivals, though both soda aficionados and vendors are adopting the beverage without the sort of enthusiasm that you might expect THB1.5 billion in advertising to buy.

In fact, amongst those adopting Est as their go-to cola, flavor is often playing a subsidiary role in their decision-making to another factor—the beverage’s container.

“I am a frequent [soda] drinker,†says 21-year-old Nawaphat Sawanna. “I drink three to four bottles a day… I could not get over the fact that Pepsi does not produce cola in glass bottles anymore. But I have to drink what I am offered.â€

Ramet Rattanakansang echoed a similar sentiment, stating that, although he still prefers Pepsi, he is, “a little bit disappointed to see [the] glass bottles…gone.â€

For Thais, who often temper their soda with liberal helpings of ice, glass bottles serve as more than just attractive packaging. It’s a widely held belief that glass bottles help preserve a soda’s carbonation, meaning that you can put more ice into a glass-bottled soda without reducing the soda’s “fizz.†So great is Thai consumers’ preference for glass that one, unnamed source within Pepsi even told Khasod Newspaper that the switch from glass to plastic would result in a 50% reduction in the brand’s sales.

With its large inventory of glass bottles and its well-maintained network for exchanging them, Serm Suk has glommed onto an advantage absent from the business model of its partner-cum-rival.

Whereas Pepsi decided to switch over to plastic bottles in the wake of its separation from Serm Suk, consumers can still purchase Est in the reusable glass containers that command the ardor of Thai consumers.

So popular are the glass bottles that some vendors are actually willing to pay a higher cost for Est in order to keep their customers’ preferred decanter on hand.

According to Vijitra Tanachaiwiwat, owner of the Phaya Thai district restaurant Rung Sang Khao Man Gai, “I do not need to make a new deposit payment [on the glass bottles] as Serm Suk took care everything. They replaced boxes of Pepsi with Est and that was simply how it went.

“I prefer these returnable glass bottles to cans or plastic bottles,†he continues, “since they are more demanded by consumers.â€

Wisut Suthiprasert, owner of Jan Yai Restaurant, said that even though Est costs slightly more than Pepsi, he’s still willing to keep it in stock.

“The cost of Est per bottle is approximately THB1 higher than Pepsi,†he says. “So, a normal box consisting of two dozen bottles costs me THB24 more.

“Despite the spike in cost, [sales are] increasing. It is due to limited choices of carbonated beverages offered in the restaurant and the desire of consumers to try the new thing.â€

At least for these shop owners, whose restaurants comprise small theaters in Thailand’s freshly minted “soda wars,†the switch from Pepsi to Est has taken place with a notable lack of drama.

Serm Suk has simply stopped its weekly deliveries of Pepsi, and started in on deliveries of Est.

However, while neither Pepsi nor Est had made strong entreaties to the retailers that Coconuts interviewed, Wisut did report being aggressively courted by a third suitor.

“Coke came to offer a new deal several times,†he says, “but it was not attractive enough that I needed to switch to their products. If I do, I have to make a new deposit payment and have to remove logos of other brands in the restaurant.â€

Of the deal he concluded, “It is not very worthy.â€

And then there were three

If the USD2.9 billion (THB88.8 billion) that Pepsi has invested in Thailand since the year 2000 seems steep, consider that Thailand is one of the few countries in which Pepsi has traditionally maintained a lead over its perennial rival— Coca-Cola.

That advantage, however, has weakened, thanks to the brief interim in which both Pepsi and Est have rushed to find new footing.

The Bangkok Post recently reported that Coca-Cola brand soft drinks—which include Coca-Cola, Fanta and Sprite—commanded a 55% market share in November, the company’s highest since entering the Thai market more than 50 years previous.

While Pepsi was busy rebuilding its bottling and distribution infrastructure, and Serm Suk was busy constructing a nationwide brand from scratch, Coca-Cola saw a window of opportunity and went for it, investing THB200 million in marketing its flagship brand across Thailand.

With ads, taste tests and a small ocean of free samples, Coca-Cola reaffirmed its status as a contender for Thailand’s carbonated crown.

It’s too early yet to tell whether Coca-Cola’s gains will be permanent, but once Pepsi and Est have fully regained their stride, there can be no doubt that competition will be much steeper for Thailand’s THB38.5 billion yearly soft drink market.

And there are other competitors to take heed of as well. Big Cola commands the ardor of many of Thailand’s soda drinkers, and all of the country’s soft drink brands must compete for customers with iced teas, coffees and energy drinks.

In this fight, Est is at somewhat of a disadvantage (despite its sizable marketing war chest) since it lacks the global brand recognition of its two largest competitors.

However, despite the corporate maneuvering, marketing trickery and shifting preferences as to packaging, for Thais, it might all come down to a simple matter of taste.

According to neophyte Est drinker Akkhapas Suksriwong, “with the coming of Est, I think I just found a new beverage. The taste of Est is more similar to root beer, not cola like Pepsi or Coke…That is what I have been looking for.â€

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And the Pizza company did the same thing basically, learned the ropes through the franchises they bought and were taught to run, and then when their contract ended with Pizza Hut they just stole all the locations, recipes, advertising etc and rebranded under a different name. Again, Thais copying what they learned and stealing the ideas and just about everything from the earlier farang company. Nothing original from the Thais. Thais don't usually do original ideas. Hell, open a small stand, become successful, and plenty of Thais will try to steal your ideas and concept and set up shop right next to you and undercut you by selling cheaper, usually using cheaper goods/foods to do so. Here in Surin once one coffee shop looked to be doing well every Thai/Chinese cunt with money started opening coffee shops. Now there are way too many coffee shops in Surin and few with anything original about them.

 

A bit on it from a paper done by a student:

 

"Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread. It is a subsidiary of Yum! Brands, Inc.(the world’s largest restaurant company) with approximately 34,000 restaurants, delivery/carry-out locations and kiosks in 100 countries.

 

 

In Thailand 1981, Minor Food Group, Thai company, owned by Minor International (one of the biggest food service operators in Asia) bought Pizza Hut’s franchise and operated successfully by opening up many branches in shopping malls and stand alone shops. Pizza Hut was a blast and it was new in Thailand as one of the first movers in pizza category. If people think about pizza, they will go to Pizza Hut. However, Minor Food Group had terminated the franchise contract after year 2000, since they decided to operate pizza restaurant on their own because they had gained a lot of experiences in the business. Therefore in 2001, Minor was apart from Yum!, and found a new company named The Pizza Company built up on the same locations as they owned Pizza Hut earlier. By this resource in hand, with aggressive strategy, they could open the pizza under the name The Pizza Company 80 branches in just one day. However Pizza Hut still has competed in the market as Yum!’s representative.

 

The aim for writing this paper is to discover and understand more on how Pizza Hut built the brand in Thailand and operated successfully, then after the golden period, Pizza Hut market share began to shrink due to the new competitor “The Pizza Company†coming in, who seemed to have expertise in doing business in Thailand and understand the taste of Thai people, moreover they also got the advantage on their current store locations.

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Pizza Hut is Bill Heinecke. He's a Yank, or at least used to be. (He may have given up his US citizenship for tax purposes.) That is his modus operandi ... learn what you are doing, then compete with you. Heinecke grew up here and does know the Thai way. He went to the international schools with the rich Thai kids and thus has the contacts.

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Again, same old, same old crap. Same sort of thing happened with Carlsberg. Only Carlsberg pulled out, likely seeing the writing on the wall and knowing that they were going to get screwed. Now they are back and using Sing Co. instead for their distribution. "Singha Corporation, distributor of the Singha and Leo brands, will now distribute Carlsberg, a premium beer, in Asia through its networks." I believe they have a brewery in Vietnam if I remember correctly what I read a while back.

 

ASEAN will help them get back at Chang for trying to screw them.

 

"After a decade of off-and-on availability in Thailand as a partner of Chang beer, Carlsberg has re-entered the local market under a deal with Chang's arch-rival Singha."

 

"In December 2000 Carlsberg and Chang established a 50/50 joint venture, Carlsberg Asia, to create a significant brewing company in Asia.[4] The Carlsberg influence can be seen in the typography of the 'Beer Chang' logo, which resembles the classic 'Carlsberg Beer'.[5] In 2005 Carlsberg pulled out from the venture and terminated licence agreement with Chang. Because of non-fulfilment of contractual obligations, resulting in Chang claiming US$2.5 billion in damages.[4] A final settlement of US$120 million was subsequently paid by Carlsberg."

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I see almost no one drinking Chang, and I am talking about in Thai places. Leo is the Thais' choice at the moment, one I often order too. (It's made by Boonrawd = Singha.) I swear that Chang has changed. I used to drink it 10 or so years ago. I don' tlike it anymore (except for the export version actually made from hops and malt).

 

In the 1980s I used to drink locally made Guinness. Wonder why they pulled out ... suspect it is because the Thais wouldn't drink it. There was also a Black Tiger beer, sort of like an English ale. Thais wouldn't touch it. :dunno:

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Hi,

 

"I don't!"

 

Neither do I. I ask and if I am told they only have Est, I make a point of telling them I don't drink that crap so just give me water instead.

 

Sanuk!

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:dunno: .... be careful.....some people will try and tell you that ...Cola is Cola....and you should graciously accept whatever the wait staff decide to bring you.... :nono::surprised: :surprised: :surprised:

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Hi,

 

"KS I need some help then... How do you say, "I dont drink that crap!" in Thai?"

 

Okay, I was paraphrasing, no clue how to say that in Thai :)

A literal translation of crap doesn't work I think.

 

Sanuk!

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