Vitamin C boost: New category innovations cushion convenience store sales slump for Thai MNC Osotspa

Osotspa is a key player in Thailand’s functional drinks and energy drinks market, and also has a personal care business.

It reported a total revenue of THB$13.69bn (US$410m), up 8.7 per cent for the first half of FY2021. Net profit was up 5.4 per cent to THB$1.8bn (US$54m).

It is currently the market leader for both energy drinks and functional drinks in Thailand, with a market share of 54.8 per cent and 37 per cent respectively.

The two categories contributed to annual beverage sales growth of 5.2 per cent to THB$9.36bn (US$280m) between January and June this year.

Including its overseas markets performance, the company reported a total revenue of THB$11.74bn (US$352m) for its beverage business in the first half of FY2021, up 10.4 per cent.

“International beverage sales delivered 37.4 per cent growth yoy, reflecting our strong brands, successful route-to-market execution, and skilled local teams to serve market demand. Domestic beverage sales grew by 5.2 per cent yoy to THB 9,360 million, driven by core energy drinks and C-Vitt,”​ the company said.

Vitamin C innovations ​

The popularity of vitamin C drinks have cushioned the company from declining sales of functional drinks in the convenient stores – which is a key sales channel in Thailand. The firm also has also functional drink brands such as peptide protein drink Peptine and fibersol rich drink Slimma. 

“1H’21 functional drinks market weakened mainly due to a decline in convenient store channel, which was a key channel for the category, impacted from lockdown measures and government stimulus measures. However, vitamin C subsegment continued its double-digit growth,” ​the company said.

Both its flagship vitamin C drink C-Vitt and new vitamin C related products were key sales drivers of the firm’s functional drinks portfolio. C-Vitt is a brand by House Osotspa – a joint venture between Japan’s House Foods Corporation and Osotspa established in 2011.

The new vitamin C products offer other benefits such as beauty-from-within and acting as a source of dietary fibre, on top of providing vitamin C. 

They are C-Vitt Plus Collagen which contains 120mg of vitamin C and 1,000mg of collagen and C-Vitt Plus Fiber, which also contains 120mg of vitamin C. These products come in 140ml shots.

To cater to in-home consumption, the company also launched C-Vitt in a one litre aseptic format.

“Vitamin C subsegment showed accelerated growth again after slowing down in Q1’21, while non-vitamin C [subsegment] declined. ​

“The solid C-Vitt sales momentum was driven by both strong core variant and product innovation with added benefits.” ​

A March 2021 report by Euromonitor showed that reduced opening hours and lower foot traffic had “adversely affected” ​convenience stores sales in Thailand.

The company also announced a collaboration with Yanhee Vitamin Water in distributing its vitamin B water in view of the growing health conscious trend in April.

Energy drinks ​

Similarly, new energy drinks with added benefits, on top of existing flagship products, were the sales engine for the category.

Its core energy drink brands are M-150 and Som In-Sum.

To tap on the female market, it launched an energy drink catered to women under the brand Lipo in June.

The product, known as Lipo Fine, is developed with Japan’s Taisho Pharmaceutical.

“Spend per buyer on energy drinks among women consumers continues to grow.​

“The spread of Covid-19 makes it more important for consumers to maintain their health. So, they are inclined to spend more on products with health benefits. This provides a marketing opportunity for energy drink products that cater to the needs of women,”​ Wannipa Bhakdibutr, president of Osotspa Public Company Limited, said about the launch.

Coming in the form of a 100ml pack size, it is said to be a zero per cent sugar energy drink in the mixed-berry flavour and contains 1,000mg of the amino acid taurine.

The herbal variant of Som In-Sum Plus containing Korean ginseng extract was also launched.

The company said these three products have led sales growth in the domestic energy drinks segment.

Nonetheless, the company cautioned that the fast-spreading Delta COVID-19 variant could undermine strong growth seen in Q2.

“Both energy drinks and functional drinks showed a good recovery after the previous wave but started to be softened after the latest COVID-19 resurgence from Delta variant in Thailand,” ​the company said.