AN OVERVIEW OF THE MALAYSIAN JUICE AND SOFT DRINK MARKETS

ROSLINA ALIECONOMIC AND TECHNOLOGY

MANAGEMENT RESEARCH CENTERMARDI

Introduction Scenario Industry/ Market TrendsConsumption Market Shares Projections / Prospects/ Technology Issues and Challenges Conclusion

PRESENTATION OUTLINES

Juices◦Naturally contained in fruits and vegetables◦prepared by mechanically squeezing or macerating

fresh fruits or vegetables◦Contain 100% juice

Nectars◦Made from fruits or vegetables◦Contain 25-99% juice◦Added sugar/sweetener

INTRODUCTION

INTRODUCTION Soft Drink◦Does not include milk and milk shake, vegetable juice,

fruit juice, tea, coffee, chicory, cocoa and their related products

◦ shall not contain any added alcohol.

Fruit/ Vegetable Juice◦Juice:

100% juice content

◦Nectars: 25 – 99% juice content

◦Juice Drinks: Up to 24% juice content

◦Fruit-Flavored Drinks: 0% juice content

CLASSIFICATION OF JUICES

Soft Drinks◦Carbonates◦Fruit/vegetable juice◦Bottled water ◦Functional drinks◦Concentrates◦Ready-to-drink (RTD) tea◦Ready-to-drink (RTD) coffee◦Asian specialty drinks

CLASSIFICATION OF SOFT DRINKS

Fruit/vegetable juice drinks were the most preferred products contributing 58.7% to the sales value in 2007, followed by nectars (35%), and 100% juice (6.3%).

Malaysia Milk Sdn Bhd (i.e. Marigold brand) is the market leader of both retail volume and retail value shares.

SCENARIO: Juice Sector

As of 2007,carbonated drinks contributed around 29.9% of sales values, followed by asian specialty drinks (23.7%), functional drinks (20.1%), fruit and vegetable juice (12.2%), concentrates (6.6%), RTD tea (5.7%), and RTD coffee (1.7%).

F&N coca-cola (M) Sdn Bhd (i.e. 100 Plus, F&N, Coca-cola, and Seasons) controlled 33.2% of the market in 2007 – the largest.

SCENARIO: Soft Drink Sector

2002 2003 2004 2005 2006 20070.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Figure1. Total Retail Sales of Fruit and Vegetable Juices by Subsector in Values, 2002-2007

RM

Mill

ion

TRENDS: Juice Sector

The total value of retail sales for fruit and vegetable juices showed increasing trends from RM263.5 million in 2002 to RM 352 million in 2007. All subsectors were gradually increasing in the same period.

Increasing health awareness, fast-paced lifestyle, and westernization of society helped to boost demand of these products, as purchasing power of consumers has increased.

TRENDS: Juice Sector

2002 2003 2004 2005 2006 2007

Carbonates 673.5 700.5 722.5 745.2 769.5 795.9

Asian specialty drinks 518.5 534.2 551.8 571.0 598.6 632.3

Functional drinks 293.5 356.7 412.0 454.9 494.6 534.8

Fruit/vegetable juices 263.5 275.7 287.3 299.0 311.5 325.0

Concentrates 134.5 140.6 147.5 155.6 165.6 177.0

RTD tea 121.5 125.2 130.3 136.2 143.7 152.4

RTD coffee 34.8 36.5 38.3 40.4 43.1 46.4

TOTAL 2,039.8 2,169.4 2,289.7 2,402.3 2,526.6 2,663.8

TRENDS: Soft Drink SectorTable1. Retail Sales of Soft Drinks by Sector, 2002-2007

(RM Million)

TRENDS: Soft Drink Sector Off-trade sales in values are gradually

increasing from RM2,039.8 mill. to RM2,663.8 in 2002 and 2007, respectively.

Marginally stronger total values in 2007 due to deeper geographical and demographical penetration of such products.

CONSUMPTION: 100% JUICES

2003 2004 2005 2006 20070.0

10.0

20.0

30.0

40.0

50.0

60.0

%

Figure 2. Top 5 Leading Flavors for 100% Juices: Per-centage Volume Breakdown, 2002-2007

2003 2004 2005 2006 20070.05.0

10.015.020.025.030.035.040.045.050.0

%

CONSUMPTION: NECTARSFigure 3. Leading Flavors for Nectars: Percentage

Volume Breakdown, 2002-2007

2003 2004 2005 2006 20070.0

5.0

10.0

15.0

20.0

25.0

30.0

CONSUMPTION: Juices DrinkFigure 4. Leading Flavors for Juice Drink: Percentage

Volume Breakdown, 2002-2007

%

CONSUMPTION: Soft Drinks

Functional drinks; 12.8%

Asian spe-cialty

drinks, 6.4%

Bottled water; 6.3%RTD cof-fee; 5.9%

Concen-trates; 5.6%

RTD tea; 4.6%

Fruit/veg-etable

juice; 4.3%Carbonates; 3.4%

Figure 5. Percentage Value Growth (Retail sales), 2002-2007

MARKET SHARES: JuicesTable 2. Top 10 Brand Shares of Fruit/Vegetable Juice by Retail

Sales Value, 2007

Brand Company % Shares Marigold Malaysia Milk Sdn Bhd 28.8

Pokka Pokka Ace (M) Sdn Bhd 12.9

Sunkist F&N Dairies (M) Sdn Bhd 10.9

Drinho Ace Canning Corp Sdn Bhd 9.0

Yeo's Yeo Hiap Seng (M) Sdn Bhd 4.6

Delite Amoy Canning (Beverages) Sdn Bhd 3.7

Seasons F&N Coca-Cola (M) Sdn Bhd 3.2

Fruit Tree F&N Dairies (M) Sdn Bhd 2.6

Vegood Clouet & Co (KL) Sdn Bhd 2.2

Ribena Glaxo Smith Kline Sdn Bhd 1.9

Brand Company %Share

100 Plus F&N Coca-cola (M) Sdn Bhd 12.9

F&N F&N Coca-cola (M) Sdn Bhd 10.3

Yeo's Yeo Hiap Seng 9.9

Coca-Cola F&N Coca-cola (M) Sdn Bhd 6.8

Drinho Ace canning Corp Sdn Bhd 5.4

Marigold Malaysia Milk Sdn Bhd 4.3

Seasons F&N Coca-cola (M) Sdn Bhd 3.2

Pokka Pokka Ace (M) Sdn Bhd 2.8

Sunquick Barkath Co-Ro Manufacturing Sdn Bhd 2.3

Ribena Glaxo Smith Kline 2.1

MARKET SHARES: Soft DrinksTable 3. Top 10 Brand Shares of Soft Drinks by Off-trade

Value, 2007

PROJECTION: JUICE SECTOR

2010 2011 20120

50

100

150

200

250

RM

‘ 00

0

Figure 6. Projection of Retail Sales for Fruit/Vegetable Juice by Subsector, 2010-2012 (RM Million)

Carbon

ates

Asian s

pecial

ty drin

ks

Functi

onal

drinks

Fruit/V

egetab

le jui

ce

Conce

ntrates

Bottled w

ater

RTD tea

RTD coffe

e0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

2010

2011

2012

RM

‘000

Figure 7. Projection of Retail Sales for Soft Drinks by Subsector, 2010-2012 (RM Million)

PROJECTION: SOFT DRINK SECTOR

TRADE: JUICES SECTOR

2004   2005   2006   2007   2008   2009 0.05.0

10.015.020.025.030.035.040.045.050.0

USD

Mill

.

Figure 7. Total Value of Imports and Exports for Fruit/Vegetable Juices (USD Million), 2004-2009

Fruit/vegetable juices (i.e 100% juice, nectars and juice drinks) are expected to grow steadily from RM346.2 mill. in 2010 to RM363.9 mill. in 2012.

The constant growth value is due to increasing health consciousness, particularly middle and high income consumers.

New healthy products development include sugar-free/reduced, fat-free/reduced, preservative-free, artificial coloring-free are expected to help drive the growth of fruit/vegetable juices over the forecast period.

PROSPECTS: JUICE SECTOR

Soft drink sector are expected to increase from RM 3,152.3 mill. to RM 3,411.2 mill. in 2010 and 2012, respectively.

Carbonated drink subsector (25.9%) are expected to contribute the largest proportion in the soft drink sector in 2012, followed by asian specialty drink (23%), functional drinks (19.5%),fruit and vegetables juice (10.8%), concentrates (6.7%), Bottled water (6.6%), RTD tea (5.5%), and RTD coffee (1.9%).

PROSPECTS: SOFT DRINK SECTOR

Technology of hurdle effect for processing fruit/vegetable cordials

Technology of pasteurization for processing high quality fruit/vegetable juices

Technology for processing high acidic fruits/vegetables canning juices/drinks

Technology of processing fruits/vegetables/herbs juices and drinks

TECHNOLOGY ADVANCEMENTS

Increasing trends of health and wellness◦sugar-free◦fat-free ◦vitamins and minerals added◦non-carbonated drink◦No artificial coloring◦Diseases resistant

Supply of raw materials◦The most preferred flavors are orange and

apple which highly rely on exports.

ISSUES AND CHALLENGES

THANK YOU