CSD dip dogs Coke's Thai leadership fight

Despite a four-year lead on the competition, Coca-Cola trails rival Pepsi in Thailand, one of just a handful of markets globally where it does not have the upper hand. The world's most popular soft drink was trumped by its rival early in the 50-year cola war by a pricing scheme that offered more Pepsi at lower prices; and by its competitor's strategy of flooding rural markets and sponsoring local events, while Coke stayed focused on the big cities. "Coca-Cola is now everywhere in Thailand, and a few years ago, it adopted a 'Think Local, Act Local' strategy, but the problem is that Pepsi was there first -- it was first at the temple fairs, first doing local charity work, and first to reach the consumer," said a source. Coca-Cola is typically tight-lipped about competitive data, but Pepsi claims a 63 per cent stake in the cola category. It also claims to have increased its stake by a percentage point last year, which was celebrated as 'The Year of Coca-Cola'. Even as they clash, the two rivals recognise that the more serious threat is the growing shift toward healthier choices. Beverage industry analyst Canadean reports a steady erosion in CSD's share of throat to 25.4 per cent last year from 39.1 per cent in 1995. In a move to add fizz to the market, Coca-Cola launched Vanilla Coke last year, its first brand extension in four years. The attempt to accelerate soft drink growth via a flagship brand extension makes sense since the colas control 60 to 70 per cent of the CSD market, itself the second largest beverage segment after bottled water. Coke is also branding itself a leader in innovation. "In Thailand, Coca-Cola was the first to launch the can, PET bottle and contour PET bottles. In terms of product innovations we launched Vanilla Coke to provide a popular new flavour for Thai consumers," a spokesman pointed out. Coke also recognises that the shift toward alternative beverages is here to stay. Over the last three years, it launched Namthip water, Qoo fruit juice, Nestea and most recently, RTD coffee Zu. Brand Coca-Cola, however, continues to be the company's core product, contributing an estimated 60 per cent to revenue.