June 17, 2017 4:00 pm JST

Thailand's No. 2 energy drink brand bullish on exports

From the country that gave the world Red Bull, here comes Carabao

YUKAKO ONO, Nikkei staff writer

BANGKOK -- Carabao controls the second-largest share of Thailand's energy drink market, helped there by a brand that was already well-known before the beverage showed up.

The Carabao Group was co-founded by Aed Carabao and Sathien Setthasit in 2002 in Bangkok. Aed, or Yuengyong Opakul, his real name, has been the lead vocalist of Carabao, a popular folk band, for more than four decades. He used to think about starting a business he thought he may not be able to keep singing forever.

He knew working class people, who make up the band's fandom, were the main consumers of energy drinks. So he went about luring talent from an existing energy drink maker.

At the time, Thailand's energy drink market was controlled by leading beverage makers. There was also the top brand to contend with -- Krating Daeng, which spawned the global mega brand Red Bull.

Yuengyong and Sathien, an experienced businessman, would also have to deal with Thai red tape. Energy drinks are categorized as medicines in the country. As such, TV advertisements cannot show the product or make claims of any benefits.

The two friends would have to put their drink directly in the hands of consumers. So they had more than 800 Carabao girls fan out across the country. During the week, they would hand out samples at shops or along streets. On weekends, they would host karaoke contests and raffles. Prizes were expensive pieces of jewelry.

It was a lot like how the Carabao band made itself popular -- by frequently touring in rural areas.

Carabao CEO Sathien

CEO Sathien is now eyeing overseas markets. The brand has already expanded into Cambodia, where today it is the No. 1 energy drink. Now the beverage maker has its sights set on Europe, where Carabao is an official sponsor of Chelsea, the reigning champion of the prestigious Premier League.

China, where energy drinks are only now taking off, is another possibility.

To beef up its export capabilities, Carabao has partnered with a unit of Japan's Showa Denko for aluminum can production. It looks to raise its overseas sales to 50% of all sales by the end of this year, from the current 30% or so.

Showa Denko K.K.

Japan

Market(Ticker): TKS(4004)
Sector:
Industry:
Process Industries
Chemicals: Specialty
Market cap(USD): 5,967.36M
Shares: 149.71M

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