Fuelling category growth
David Hayes explores the consumption of energy drinks in the Asia Pacific region
Images courtesy of David Hayes
Consumption of energy drinks has returned to a growth trajectory in the Asia Pacific region since the end of the Covid-19 pandemic, as more people are attracted to the ever-widening range of energy beverage choices.
Asian countries led global energy drink market growth in 2023 due to various factors, including increased disposable income, greater consumer healthy lifestyle awareness and large young populations in many countries wanting a quick boost to their physical and mental energy.
Energy drinks’ increasing popularity marks a shift away from traditional soft drinks such as colas. These are now seen as less healthy due to their high sugar content, encouraging consumers to switch to functional beverages, including energy drinks, that are perceived as a healthier choice.
In fact, energy drink sales growth would be even higher, some analysts believe, were it not for medical concerns about possible side effects from excessive caffeine intake from energy beverage consumption. Some countries have already introduced regulations limiting energy drinks’ caffeine content, forcing beverage companies to reformulate their beverage contents to comply, sometimes adding new health-promoting ingredients in the process.
China is the region’s largest energy drinks consumer. Other important markets include Japan, South Korea, Thailand, Indonesia, Vietnam and the Philippines. Sold in various can and PET bottle sizes and designs, canned energy drinks are driving consumption growth across Asia, preferred for their bright attractive appearance, product innovation and wide availability through convenience stores, supermarkets, bars and restaurants.
Most canned energy drinks are filled in 200ml, 220ml or 250ml size slim or sleek cans, while 250ml stubby cans are used by two of Asia’s leading energy drink brands, Thailand’s Red Bull and Carabao, who use their iconic can designs to increase domestic and worldwide sales.
TCP Group, the manufacturer and distributor of Red Bull (known locally as Krating Daeng), believes foreign energy drinks markets have high growth potential. TCP Group chief executive, Saravoot Yoovidhya, earlier this year was reported in The Bangkok Post as saying the company’s energy drinks market share is around 17 to 18 per cent in Thailand, while in China the firm is a market leader with a 40 per cent share, and has over 50 per cent in Vietnam, which is seen as still having high consumption growth potential.
Thailand’s domestic energy drinks market grew by four to five per cent in Q1 2024, according to Yoovidhya, slowed by the stagnant domestic economy, while price competition among Thai energy drinks brands continues to intensify following the launch of many new brands in 2023.
In addition to Red Bull, the company’s flagship brand, TCP produces other canned energy drinks in Thailand and in some overseas plants. These include Ready, a premium sparkling energy drink aimed at women, and Warrior, a carbonated energy drink popular in Vietnam. Both brands are being promoted for export to new markets in India, the Middle East and Africa.
Unusually for Asia’s energy drinks industry, both leading Thai energy drinks producers, TCP and Carabao, operate their own dedicated high-speed beverage can lines to produce energy drinks cans in-house, in addition to buying can supplies from local can makers. TCP Group, in partnership with Crown Holdings, produces two-piece stubby cans at the Crown TCP Beverage Cans plant in Saraburi. Commissioned in late 2022, the 26,400 squaremetre plant produces 250ml Red Bull cans using 0.245mm gauge aluminium sheet, believed to be thinnest gauge currently used in Asia. Equipped to produce 820 million cans per year when opened, the factory is designed for expansion to produce 1.5 billion cans per year, depending on Red Bull sales growth in future.
Prior to TCP’s can making venture, Thailand’s Carabao Group, manufacturer of Carabao Dang beverages including Carabao energy drink, previously signed an agreement with Japan’s Showa Aluminium Can Corp, to jointly install and operate a high-speed two-piece can line in its Carabao energy drink filling plant near Bangkok.
Showa Aluminium Can Corp has since been renamed Altemira Can Co Ltd, following Apollo Asset Management’s takeover of Showa Aluminium Can and Showa Denko Corporation’s other aluminium related assets. Believed to be commissioned in 2019 with a planned eventual capacity of one billion cans per year, the can line is designed to make 250ml stubby cans to fill with Carabao energy drinks for domestic sale and worldwide export. Carabao Group aims to become Thailand’s energy drinks market leader, targeting a 27-28 per cent share this year, up from 25 per cent previously, Sathien Sathientham, Carabao’s chief executive, has been reported as stating.
In Asia, neighbouring Cambodia is an important export market for Carabao energy drinks, while sales to Myanmar, along with sales by other Thai energy drinks brands, have been hit by recent Myanmar’s internal civil strife.
While energy drinks consumption is rising across most of Asia, China has seen the largest increase in energy and other beverage can production capacity as beverage companies and can makers continue investing in new production facilities to be closer to fast-growing provincial markets.
Shengxing Co, one of China’s leading can manufacturers, has announced plans to build a RMB¥1 billion food and beverage packaging plant in southwest China, to support growing demand for canned beverages in the economically expanding region. The company’s plans involve investing about RMB¥500 million to construct a three-piece beverage can plant in Neijiang Economic & Technological Development Zone in Sichuan Province. Equipped to produce an estimated 500 million cans per year initially, the new plant will supply cans to the nearby Tencel Red Bull Drinks plant in Neijiang and to other beverage and food packing companies in the area.
Shengxing’s Phase 1 plant will occupy about 57 acres of a 96-acre site purchased to locate the multi-phase project. Shengxing earlier installed five new threepiece can lines in Kunming in Yunnan Province, Chengdu in Sichuan and Zhongshan in Guangdong to expand beverage can production, including energy drinks cans, in southwest and south China. Two new Soudronic lines, each designed to produce 300 to 350 million cans per year, were installed in Chengdu and Zhongshan to make 250ml stubby cans for Red Bull.
Meanwhile, ORG Packaging Co Ltd, another of China’s big four can manufacturers, recently launched a re-sealable screw top beverage can end. Designed to fit all 202-diameter aluminium and tinplate cans, ORG has dubbed its new lid as ‘One Lid to Rule Them All.’ ORG said in a recent statement announcing the launch of its new beverage can lid: “The design of ‘One Lid to Rule Them All’ ingeniously separates the can body from the lid, presenting an optimal lid solution that minimises replacement costs for metal cans.” The 38mm diameter wide-neck screw-top lid is particularly suited to sports drinks cans, according to ORG, but is designed for use on most beer and soft drinks beverage cans ranging from 330ml to 500ml in size.
ORG has installed two- and three-piece can lines in several of its plants around China to supply its Thai client, TCP Group, and some other energy drinks brands’ growing needs. Many of ORG’s threepiece beverage can lines produce 250ml 206 stubby cans for Red Bull. ORG has also converted a slim can line in its Hubei plant to produce 330ml sleek cans to fill with TCP’s War Horse energy drink, for sale in China.
In addition to making cans, ORG offers a beverage can filling service in Hubei and several other locations that is used by many of its energy drinks and other soft drinks customers.
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