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M'sian beverage giant eyes regional expansion
Publication Date : 23-12-2013
The isotonic drink 100Plus is a brand not unknown to many. The drink was the first to be formulated and launched in Malaysia as a sports drink under the F&N Group in 1983.
And Khalid Alvi, managing director of F&N Beverages Marketing Sdn Bhd believes that 100Plus continues to enjoy a loyal and significant following among Malaysians.
He noted that 100Plus has grown with the market over the past 30 years and currently holds the lion’s share of the isotonic segment with over 80% market share. But F&N Beverages hopes to grow 100Plus’ market further with a new brand proposition.
Recently, F&N Beverages launched a rebranding campaign to change the scope of 100Plus’ market to reach out to consumers outside the sports arena.
“Brands grow big because they have in some way touched people’s lives. By and large, 100Plus is the leading ready-to-drink brand with 24 cans consumed every second and with three times more loyal consumers than other brands.
“But we need to continue to reengineer the brand. 100Plus was launched as Malaysia’s first sports drink. But we are giving it a refreshed look and a new proposition for consumers,” Khalid said.
In the coming months, F&N Beverages will be rolling out more advertising and promotional (A&P) efforts to push 100Plus as a beverage for an active lifestyle rather than just a sports drink.
Khalid hopes to see sales double after the campaign. But he is guarded about the drink’s current sales.
“Generally, the average A&P expenditure for the beverage industry is 8% to 12% of revenue. We are putting in a little more than our usual A&P budget to push this campaign out,” he said.
The soft drinks segment makes up about 40% of F&N Holdings Bhd revenue which posted about 3.5 billion ringgit (US$1.06 billion) for financial year ended March 2013.
F&N Beverages is Malaysia’s largest soft drinks distributors and manufacturer with a workforce of 1,400 employees and five manufacturing plants nationwide.
According to Khalid, the ready-to-drink market sees annual growth of 5% a year. The isotonic segment that 100Plus is in, makes up about 20% of the ready-to-drink market. But 100Plus is aiming for double-digit growth annually, outpacing the growth of the market.
100Plus may be the leader in the local isotonic market, but F&N Beverages is eyeing strong expansion outside of the country.
“We have plans to go global. Currently, we are big in Malaysia and Singapore. We intend to be an Asean brand and from there, grow in Asia and eventually on to the global arena,” Khalid said.
But before a full-scale expansion abroad, Khalid wants to build the brand at home, hence, the rebranding exercise.
“When we rebrand, we are making it more relevant to our target audience. We are timeless and we want to continue to be so in the eyes of the consumers.
“We can’t grow internationally if we can’t even be relevant at home. While 100Plus has a global appeal, consumers do feel that it is their brand, a local brand. So the rebranding exercise makes us ready for today and what is ahead,” he explained.
The brand’s growth is an ongoing process and Khalid estimates that it will take more than five years to build 100Plus into a strong global brand.
F&N Beverages has also been studying neighbouring consumer markets in Indonesia and Vietnam to test 100Plus’ growth potential in the region. Khalid noted that the response has been encouraging so far.
But growth in the industry is not without its challenges.
The beverage industry is a competitive one as more players flood the market with more products, offering consumers a vast variety to choose from.
Khalid acknowledges that with the stiff competition, it is getting costlier for a brand to be “heard”.
Additionally, as 100Plus grows into other markets, the brand will need to find the right formula that addresses the preferences of various markets.
“Every market has its own barriers. For example, in Malaysia, the concern is health and in another market, it will be another challenge. So, we have to find a right balance to be relevant in different markets.
“Our job is to offer products that are addressing different preferences,” Khalid said.
As the person driving the growth at F&N Beverages, Khalid is not just focused on growing 100Plus.
“It is not just an isotonic play anymore. F&N will continue to roll out more consumer products, and while we build individual brands, we are also building F&N Beverages as a total beverage solution,” he said.
With the various products offered under F&N Beverages, Khalid aims improve the company’s position in the various segments of the ready-to-drink market.
Its other offerings include Seasons, Fruit Tree, F&N Fun Flavours, Red Bull as well as cordials.
He is confident that the effort put in by the company will result in good growth for the various brands and for F&N Beverages in the long run.
“We have seen such achievement with 100Plus. In a short span of time, its dominance in the market is phenomenal. And we will continue to grow as a group, as a total beverage solution,” said Khalid.