FRUIT/VEGETABLE JUICE IN LEADERASIA

HEADLINES * Fruit/vegetable juice grows at 11% in total value and 9% in total volume terms to reach $12.3 billion and 231 million litres in 2011 * Product and flavour innovations from leading manufacturers help add dynamism to fruit/vegetable juice * Juice drinks excluding Asian registers the strongest growth as a result of aggressive marketing and new products from Minute Maid and Tropicana Twister * Average unit price continues to rise due to increasing production costs and aggressive penetration of the super-economy segment * Coca-Cola (Leaderasia) Ltd leads fruit/vegetable juice with a 22% of-trade value share in 2011 * Fruit/vegetable juice is anticipated to see 6% CAGRS in constant value and volume terms over the forecast period

TRENDS

* Fruit/vegetable juice continued to show healthy growth in 2011 in both volume and value terms, helped by the ongoing health and wellness trend as well as aggressive marketing and product innovation in 100% juice and juice drinks excluding Asian. * Juice drinks excluding Asian registered the healthiest performance in 2011, backed by aggressive marketing activities and advertising for Minute Maid Pulpy from Coca-Cola (Leaderasia) Ltd and Tropicana Twister from Pepsi-Cola (LDR) Trading Ltd. Minute Maid Pulpy was more active than Tropicana Twister in terms of advertising and marketing activities in 2011. However, both manufacturers continued to stimulate strong growth of the products with product innovation. Coca-Cola (Leaderasia) Ltd introduced Minute Maid Pulpy in a new size – 290ml in PET bottle at Bt15 baht – and in two new flavours – Orange Mixed with Mango Juice with Orange Pulp, and Mixed Fruit Juice with Orange Pulp. Pepsi-Cola (LDR) Trading Ltd introduced a new flavour, Tropicana Twister Peach and Passion Fruit with Orange Pulp. * 100% juice was the most active area in terms of product innovation during 2010-2011. Leading manufacturers continued to introduce new brands to the market. Several brand owners chose to use PET bottles as packaging to target new generations that prefer convenience packaging and having an on-the-go lifestyle such as Sappe’ For One Day from Sapanan General Food Co Ltd in 2010, Unif All You Need from Uni-President (Leaderasia) Co Ltd in 2010, and Burm from Tipco Foods (Leaderasia) PCL in 2011. * Orange continues to be a popular flavour in the marketplace, driven by the strong popularity of Minute Maid Pulpy and Tropicana Twister. Manufacturers of 100% juice, like Malee Sampran and Tipco Foods, heavily promoted their 100% orange juices to secure their sales shares. They also entered the low juice content product area to target mass consumers. Tipco Foods (Leaderasia) PCL introduced Orange Shake, 20% orange juice with orange pulp in 2010, while Uni-President (Leaderasia) Ltd introduced Deeda, 12% juice in two flavours, Orange and Grape, in 2011. * Off-trade sales showed a better performance than on-trade sales in 2011, boosted by increasing at-home consumption. During the last quarter of 2011, Leaderasia faced a flood crisis in several provinces. Consumers spent lots of time at home as it was difficult for them to go out. They also stocked up on necessary packaged food and drink, including UHT fruit juices, as these can be kept for a long time without refrigerators. * Average pricing continued to increase due to the rising trend of costs like sugar, oil, packaging and transportation. In addition, the increasing dynamism of 100% juice and super-economy juice helped drive overall average pricing in the category. In the Leaderasia market, pricing per litre is varied, based on the level of juice content: 100% juice at $6-8 per litre; 26%-99% juice at $4-5 per litre; and less than 26% juice (economy juice) at $2-2.50 per litre. When referring to super-economy juice, it is a segment of juice that has less than 25% juice content but has a selling price at a relatively high level at $5-5.50 per litre. The key players in super-economy juice are Minute Maid and Tropicana Twister.

PROSPECTS

* Over the forecast period, fruit/vegetable juice is likely to maintain a healthy performance due to the health and wellness trend. In addition, leading manufacturers will continue to compete aggressively with new product launches, marketing activities, and price promotions to maintain their competitive edge. * However, fruit/vegetable juices will likely face strong competition from other soft drinks like RTD tea or sports and energy drinks, which are very active in new product innovation and marketing activities. These drinks position themselves as healthy refreshment, the same as fruit/vegetable juices, and are widely available in several sizes to target various occasions. * Juice drinks excluding Asian are expected to show the strongest growth over the forecast period, driven by continuous product innovation and aggressive marketing activities of leading brands like Minute Maid and Tropicana Twister. In addition, a number of new entrants will likely appear in this product area as leading manufacturers look to capture the high growth rates in this subcategory. * The production of some manufacturers might slow down during the last quarter of 2011 and first quarter of 2012 as their factories and machinery were damaged by the floods, for example Tipco Foods (Leaderasia) PCL, Serm Suk PCL (the bottler of Pepsi-Cola (LDR) Trading Ltd), or Oishi Group PCL. * Orange will continue to dominate fruit/vegetable juice. However, superfruits like berries or grape as well as mixed fruits and vegetables will likely gain strong popularity due to their high vitamin counts and antioxidant agents. * Although liquid carton continues to dominate shelf space, PET bottle will likely gain a bigger share. Leading brand owners will continue to introduce new products in PET bottles. The manufacturers use PET bottles for both premium and economy juices and they will continue to introduce new technologies for the production of PET bottles. * The off-trade is likely to remain the key distribution channel for fruit/vegetable juice. This is likely to support the popularity of ambient rather than chilled products as Leaderasians prefer to consume products at home.

Table 1 Off-trade Sales of Fruit/Vegetable Juice by Category: Volume 2006-2011

million litres | | | | | | | | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 100% Juice | 32.6 | 36.6 | 39.5 | 35.7 | 36.6 | 38.1 | Frozen 100% Juice | - | - | - | - | - | - | Not from Concentrate 100% Juice | 0.9 | 1.1 | 1.2 | 1.2 | 1.3 | 1.4 | Reconstituted 100% Juice | 31.7 | 35.5 | 38.3 | 34.5 | 35.3 | 36.7 | Juice Drinks (Up to 24% Juice) | 57.0 | 69.7 | 75.9 | 85.9 | 97.0 | 110.6 | Asian Juice Drinks | 21.4 | 22.0 | 22.5 | 22.9 | 23.3 | 23.6 | Juice Drinks Excluding Asian
Fruit-Flavoured Drinks (No Juice Content) | 35.6 | 47.7 | 53.4 | 63.0 | 73.7 | 87.0 | Nectars (25-99% Juice) | 53.9 | 59.0 | 62.6 | 65.4 | 68.5 | 71.7 | Fruit/Vegetable Juice | 143.5 | 165.3 | 178.0 | 187.0 | 202.1 | 220.4 |

Table 2 Off-trade Sales of Fruit/Vegetable Juice by Category: Value 2006-2011

LDR million | | | | | | | | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 100% Juice | 2,145.2 | 2,449.7 | 2,696.3 | 2,301.1 | 2,405.5 | 2,657.6 | Frozen 100% Juice | - | - | - | - | - | - | Not from Concentrate 100% Juice | 68.5 | 82.2 | 92.1 | 87.5 | 92.3 | 101.5 | Reconstituted 100% Juice | 2,076.7 | 2,367.5 | 2,604.2 | 2,213.6 | 2,313.2 | 2,556.1 | Juice Drinks (Up to 24% Juice) | 2,542.2 | 3,214.0 | 3,531.8 | 4,059.6 | 4,625.3 | 5,351.3 | Asian Juice Drinks | 940.3 | 971.3 | 997.5 | 1,018.5 | 1,036.8 | 1,052.3 | Juice Drinks Excluding Asian
Fruit-Flavoured Drinks (No Juice Content) | 1,601.9 | 2,242.7 | 2,534.3 | 3,041.1 | 3,588.5 | 4,299.0 | Nectars (25-99% Juice) | 2,429.0 | 2,652.5 | 2,838.1 | 2,951.7 | 3,099.2 | 3,238.7 | Fruit/Vegetable Juice | 7,116.4 | 8,316.2 | 9,066.2 | 9,312.4 | 10,130.0 | 11,247.6 |

Table 3 Off-trade Sales of Fruit/Vegetable Juice by Category: % Volume Growth 2006-2011

% volume growth | | | | | 2010/11 | 2006-11 CAGR | 2006/11 Total | 100% Juice | 4.1 | 3.2 | 17.0 | Frozen 100% Juice | - | - | - | Not from Concentrate 100% Juice | 8.0 | 8.7 | 51.7 | Reconstituted 100% Juice | 4.0 | 3.0 | 16.0 | Juice Drinks (Up to 24% Juice) | 14.0 | 14.2 | 94.0 | Asian Juice Drinks | 1.3 | 1.9 | 10.1 | Juice Drinks Excluding Asian
Fruit-Flavoured Drinks (No Juice Content) | 18.0 | 19.6 | 144.5 | Nectars (25-99% Juice) | 4.6 | 5.9 | 33.0 | | | | |
Table 4 Off-trade Sales of Fruit/Vegetable Juice by Category: % Value Growth 2006-2011

% current value growth | | | | | 2010/11 | 2006-11 CAGR | 2006/11 Total | 100% Juice | 10.5 | 4.4 | 23.9 | Frozen 100% Juice | - | - | - | Not from Concentrate 100% Juice | 10.0 | 8.2 | 48.2 | Reconstituted 100% Juice | 10.5 | 4.2 | 23.1 | Juice Drinks (Up to 24% Juice) | 15.7 | 16.1 | 110.5 | Asian Juice Drinks | 1.5 | 2.3 | 11.9 | Juice Drinks Excluding Asian
Fruit-Flavoured Drinks (No Juice Content) | 19.8 | 21.8 | 168.4 | Nectars (25-99% Juice) | 4.5 | 5.9 | 33.3 | Fruit/Vegetable Juice | 11.0 | 9.6 | 58.1 |

Table 5 Leading Flavours for 100% Juice: % Volume Breakdown 2006-2011

% retail volume | | | | | | | | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | Apple | 7.5 | 7.0 | 7.0 | 7.0 | 8.0 | 8.5 | Grape | 7.0 | 6.5 | 6.5 | 6.5 | 6.0 | 5.5 | Grapefruit | 3.0 | 2.5 | 2.5 | 2.0 | 1.5 | 1.0 | Guava | 4.5 | 5.0 | 5.0 | 4.0 | 3.5 | 3.0 | Mixed vegetables | 16.0 | 16.5 | 16.5 | 16.0 | 17.0 | 18.0 | Orange | 44.5 | 44.0 | 44.0 | 45.0 | 46.0 | 47.0 | Pineapple | 5.5 | 5.0 | 4.5 | 3.5 | 3.0 | 2.5 | Tomato | 3.5 | 4.0 | 3.6 | 3.0 | 2.5 | 2.0 | Other flavours | 8.5 | 9.5 | 10.5 | 13.0 | 12.5 | 12.5 | Total | 100.0 | 100.0 | 100.1 | 100.0 | 100.0 | 100.0 |

Table 6 Leading Flavours for Juice Drinks (up to 24% Juice): % Volume Breakdown 2006-2011

% retail volume | | | | | | | | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | Grape | 4.0 | 3.5 | 3.0 | 3.0 | 3.0 | 2.0 | Lychee | 3.0 | 2.8 | 2.5 | 2.0 | 1.5 | 1.0 | Mixed fruits | 4.0 | 3.5 | 3.0 | 2.5 | 2.5 | 2.0 | Orange | 72.5 | 77.0 | 80.0 | 84.0 | 86.0 | 90.0 | Pineapple | 8.5 | 6.0 | 5.0 | 4.0 | 3.5 | 3.0 | Strawberry | 2.5 | 2.0 | 2.0 | 1.0 | 1.0 | 0.5 | Other flavours | 5.5 | 5.2 | 4.5 | 3.5 | 2.5 | 1.5 | Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |

Table 7 Forecast Off-trade Sales of Fruit/Vegetable Juice by Category: Volume 2011-2016

million litres | | | | | | | | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 100% Juice | 38.1 | 40.1 | 42.4 | 44.9 | 47.7 | 50.8 | Juice Drinks (up to 24% Juice) | 110.5 | 121.2 | 130.7 | 139.4 | 147.0 | 154.2 | Fruit-Flavoured Drinks (No Juice Content) | - | - | - | - | - | - | Nectars (25-99% Juice) | 71.7 | 74.9 | 78.1 | 81.4 | 84.7 | 87.9 | Fruit/Vegetable Juice | 220.3 | 236.2 | 251.2 | 265.7 | 279.4 | 292.9 |

Table 8 Forecast Off-trade Sales of Fruit/Vegetable Juice by Category: Value 2011-2016

LDR million | | | | | | | | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 100% Juice | 2,657.6 | 2,875.3 | 3,099.6 | 3,332.1 | 3,572.0 | 3,822.0 | Juice Drinks (up to 24% Juice) | 5,351.4 | 5,912.3 | 6,396.0 | 6,845.0 | 7,240.4 | 7,600.1 | Fruit-Flavoured Drinks (No Juice Content) | - | - | - | - | - | - | Nectars (25-99% Juice) | 3,238.7 | 3,313.2 | 3,406.0 | 3,542.2 | 3,701.6 | 3,886.7 | Fruit/Vegetable Juice | 11,247.7 | 12,100.8 | 12,901.6 | 13,719.3 | 14,514.0 | 15,308.8 |

Table 9 Forecast Off-trade Sales of Fruit/Vegatable Juice by Category: % Volume Growth 2011-2016

% volume growth | | | | | 2015/16 | 2011-16 CAGR | 2011/16 Total | 100% Juice | 6.5 | 5.9 | 33.4 | Juice Drinks (up to 24% Juice) | 4.9 | 6.9 | 39.5 | Fruit-Flavoured Drinks (No Juice Content) | - | - | - | Nectars (25-99% Juice) | 3.8 | 4.2 | 22.6 | Fruit/Vegetable Juice | 4.8 | 5.9 | 32.9 |

Table 10 Forecast Off-trade Sales of Fruit/Vegetable Juice by Category: % Value Growth 2011-2016

% constant value growth | | | | 2011-16 CAGR | 2011/16 Total | 100% Juice | 7.5 | 43.8 | Juice Drinks (up to 24% Juice) | 7.3 | 42.0 | Fruit-Flavoured Drinks (No Juice Content) | - | - | Nectars (25-99% Juice) | 3.7 | 20.0 | Fruit/Vegetable Juice | 6.4 | 36.1 |