Carabao Group’s family-driven philosophy and increasingly recognisable products are combining to further energise an international drinks market already in ascent
Writer: Matthew Staff
Project Manager: Joshua Mann
Progressively becoming a household name on an international scale, energy drink brand, Carabao Group is experiencing its own energised rise to prominence as its evolution from small drink maker to multinational heavyweight gathers momentum.
The public traded Company based in Bangkok is only 16 years old, but its ever-broadening array of products can now be found in more than 20 major markets around the world.
“In 2016, the Group sold more than 800 million bottles domestically and shipped more than 400 million cans overseas,” emphasises Assistant Managing Director, Romtham Setthasit as a testament to the grandeur that Carabao now enjoys. “Carabao energy drink has also recently signed a contract with Chelsea football club in the UK to be their principle partner, while in January, 2017, we became a proud sponsor of one of the most prestigious football competitions in the UK; now called The Carabao Cup.”
Comprising three subsidiaries in the form of Tawandang DCM, its distribution arm, Carabao Tawandang, its manufacturing and marketing division, and Asia Pacific Glass, a glass bottle manufacturing entity; the business has spread its activities in such a way as to capitalise on this new-found attraction, and is compounding its influence even further via a joint venture with Japanese business partner, Showa Aluminium Can of the Showa Denko Group.
Setthasit continues: “This is to start an aluminium can fabrication company and also emphasises our international scope as we already have a considerable market outside Thailand.
In 2016 we shipped more than 400 million cans to markets including Vietnam, Cambodia, Myanmar and other Southeast Asian countries; as well as to the Middle East, Africa, the UK, China, Brazil, Azerbaijan and many more.
“All told, the Group enjoys a ratio of 65 percent-35 percent of domestic-international traction, however, with our strong international policy in place, this is set to become 50:50 in 2017. The overall plan is for this to be 30-70 by 2018.”
Expansion derives from diversification in Carabao’s case with its three subsidiaries working in tandem to facilitate overall Group enhancement; whether that’s from a product perspective, or from logistical, distribution or sales-point indicators.
Understand and act accordingly
“At Carabao Group, one of the philosophies is “Ru Jing Tum Jing” which roughly translates as: ‘To understand and to act accordingly’,” Setthasit notes. “Personnel at all levels at Carabao live by this motto whereby it is okay to make mistakes or to be unsuccessful on new projects as long as we learnt from it.”
Perhaps unique in this approach, the philosophy is compounded by the fact that The Carabao Group is still a family-owned and family-oriented Company with the three founders still involved in the day-to-day operation of the business. Inevitably fostering untold flexibility and entrepreneurship through such a structure, it will also stand Carabao in great stead throughout its international migration as customers find comfort in a break from traditional branding drivers.
“We believe that to have a less complicated company structure and ease-of-access to the decision makers are the key advantages that we have over our competitors,” Setthasit affirms. “Across all markets, Carabao energy drinks are identified as ‘everyday products for everyone’. It may sound vague but most of the global energy drink products are aimed toward young adult males who are thrill seekers and adventurous.
“Carabao has chosen a different route when it comes to consumer demographics; manufacturing and marketing products for the ‘everyday hero’ who needs energy in everyday life. This brand positioning and philosophy, together with new products, helps us to broaden our categories and to grow in the market.”
Similarly on an internal level, numerous capital investments are made on an ongoing basis to facilitate the Company’s own extensive growth; recently epitomised by the Group’s recent increase of filling capacities to gear up for export markets.
“We have also doubled production capabilities for glass bottle manufact-uring which is expected to be comple-ted later this year,” Setthasit adds.
A valuable and sustainable foundation
A family feel within such a large business obviously reaps rewards from a profit perspective but is also conducive in making Carabao an employer of choice in its various markets. More than 30 percent of the Company’s employees have remained loyal to its development for more than 10 years which is made all the more impressive considering the Group, as a whole, has only been in commission for six years longer.
“Carabao does a lot to attract local talents as a SET50 (Stock Exchange of Thailand top 50) Company, and we believe in investing in people,” Setthasit notes. “As the Company grows, we are hiring a lot of professionals to fill the needed roles as well as set up management programmes for young talents that have joined the Company as management trainees. These trainees are valued very highly on their potential to become heads of departments.
“The Group also hires a lot of local employees in the respective markets that we have expanded to. This year alone, we have hired more than 1,000 people to work for Carabao Group in markets such as China, the UK and Brazil.”
Encompassing areas of corporate social responsibility through its localisation goals, Setthasit further explains the Company’s dedication to wider social enrichment, under Carabao’s ‘Building Values in Life’ philosophy.
“This aims to give back to society from economic, social and environmental perspectives,” he says. “In this regard, the Group also establishes social projects as a means to providing a valuable and sustainable foundation of life to various communities.”
Two leading projects operating under this umbrella are the ‘My Tambon (My Superb)’ project and the ‘Music for Life’ initiative.
The former was established in 2004 with the purpose to instil, support and encourage the youth of Thailand to preserve nature and the environment in their local communities. Submitting an essay documenting their ideas around “Material Goods from my District”, the project also encourages and preserves the proper usage of the Thai language as part of an overall adherence to education and local values.
“The Music for Life project was formed by the Carabao Foundation together with Carabao Tawandang Co. Ltd, to deliver creative social activities,” Setthasit continues regarding the latter. “In 2014, they co-created a TV show with Work Point TV called ‘Bao Young Blood - Music for life project’; a musical talent show that has been running for three seasons since.
“The TV show offers an opportunity for Thai youth, who are pursuing secondary to higher education, to showcase their musical talent through performing an improvised version of Carabao music in their own style, which ensures the project’s objective in promoting the use of free time to benefit the youth themselves, and through developing musical skills.”
In showcasing heightened levels of consideration on a socio-economic scale, it can be observed and presumed among potential business partners that the same responsible approach would be applied to business activities themselves, and this has paid off in formulating Carabao’s continuously expanding supply chain.
“When you make a billion units of anything, saving one percent per unit is always a million dollar saving,” Setthasit expresses. “New markets are always being entered with our export products, and as a beverage manufacturer, supply chain management can therefore define the success of the Company.
“Once a new market has been established the next step in each case is to reach out to produce locally and when the market has reached a certain size then we would consider investing in building our own production facilities. Currently, we have a contract manufacturing in the Netherlands for European markets and we are in the process of securing local production in China and Brazil as well.”
Being a truly global entity also enables Carabao to respond more quickly and effectively to industry competitors and to consumer trends; with a better-rounded research & development outlook in tow.
“Flavoured energy drinks are gaining momentum in developed markets and in recent years they have become more acceptable among previous non-drinkers,” Setthasit concludes. “We believe we are working ahead of the curve to line up products of our own for the market while at the same time reformulating our products to make sure we don’t get caught by looming sugar tax policies.
“In the future, we would want to see ourselves as one of the global brands that have products widely available around the world, and in the next five years I would expect our international sales to be at least 10 times that of our domestic sales.”