Racheal Lee
Aug 15, 2013

Coca-Cola's first herbal drink should appeal to younger generation: industry experts

BANGKOK - The decision by Coca-Cola to launch its first herbal drink, Habu, in Thailand is a wise move, according to industry experts, who point out that a lack of prejudice against the world-renowned soft drink brand makes the country an ideal testing ground.

Coca-Cola's first herbal drink should appeal to younger generation: industry experts

While herbal beverages are not uncommon in Asia, Habu is the first-of-its-kind branded product, which industry experts say, could appeal to the younger generation who tend to shy away from such drinks.

Steve Yi, chief strategy officer at Grey Group Korea, said the launch of herbal beverages in Thailand is a much smarter move, as it is still a developing market as compared to saturated, developed markets like Australia, Japan and Korea.

“The traditional prejudices that exist against Coca-Cola are probably less prevalent in markets like Thailand or other Southeast Asian markets such as Indonesia and Vietnam,” he added. “Also, it is a good beta testing ground in the home market of Red Bull where probably almost all the beverages are herbal-based.”

He noted that if the brand takes off in Thailand, the chances are that it will do well elsewhere because of the huge competition for such products in that market. The new ready-to-drink herbal-blended beverage is a combination of four cooling ingredients: rosella, liquorice, luo han guo, and cogon grass.

The launch is backed by a US$5.1-million (THB160 million) one-year campaign titled “Habu Cooling”, which engages online and offline activities with brand ambassadors Pope and Ko Tee to build awareness and recognition. There will also be a massive nationwide sampling programme, with a target of one million sample bottles this year.

Katie Ewer, strategic planner at JKR Singapore, said Habu brings with it the “youthful confidence” of the parent company, against a sea of generic packaging featuring little more than apologetic manufacturers' endorsements.

This launch marks Coca-Cola’s effort to continue to diversify, especially in the “healthier category”, moving away from its much-criticised carbonated beverage.

Carbonated drinks, along with fast-food chains, have been under the scrutiny of health campaigners and government bodies. Global soft drink manufacturers such as Coca Cola and Pepsi are looking to widen their portfolios to include healthier drinks that are more aligned to global trends around healthy living.

Tara Hirebet, head of Asia Pacific at trendwatching.com, noted that as cities are getting congested due to urbanisation, health issues have also become the people’s main concern and healthy food is now a lifestyle.

“Healthier food/beverages are the way going forward, and the trend is to apply modern execution on traditional food and material,” she said. “One example is Chinese state-owned company Jahwa, which has turned its Herborist brand into a premium herbal skincare range.”

Among the services Jahwa rolled out is a line of Herborist spas that offer traditional Chinese medicine-based therapies like the “one-finger skill” with modern massage techniques, along with herbal facial and beauty treatments that incorporate Herborist products.

Hirebet added that it is also important for Coca-Cola to target the younger generation with modern design in its new category.

Yi of Grey, meanwhile, also warned that the industry is starting to flatten out in terms of growth, as many markets are saturated and with limited physical retail space available in the convenience stores or small supermarket channels––the key distribution point for the product. 

“If anything, the future might lean toward pharmaceuticals coming out with medically proven ‘health drinks’ that could be a greater threat to consumer brands than anything growing in the saturated consumer market,” he added.

“If I were to venture a possibility, it might not be a bad idea to do a partnership with a healthcare brand for Coca-Cola in the healthy foods category, say like GSK or Johnson & Johnson in a JV attempt for new products to create a ‘healthier image’ than do the old-style ‘ingredient-based’ marketing as in the past.”

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