Sappe Plc, a producer of beverages like Sappe Beauti drink and Mogu Mogu fruit-flavored drinks with nata de coco, expects a substantial decline in sales this year.
Piyajit Ruckariyapong, Sappe’s CEO, reported that revenue in the first quarter dropped by 38% compared to the previous year.
In the first quarter, exports accounted for 65% of sales, while 35% came from domestic sales. Last year, exports made up 80%, and domestic sales contributed 20%.
Ms. Piyajit noted that she expects sales to hit their lowest point in the first quarter and that the company cannot provide specific sales target proportions for the year due to tariffs affecting Thailand’s trade.
To address these challenges, Sappe plans to focus on enhancing brand awareness and boosting in-store sales management.
Major export markets for Sappe include South Korea, the Philippines, Indonesia, France, and the UK. The CEO highlighted that reduced demand from France and the UK has significantly contributed to the sales decline.
In the UK, despite efforts to grow in modern trade channels by stockpiling products, the company failed to meet its targets, leading to excess inventory. Similarly, in France, surplus inventory resulted from a mismatch between planned product availability and actual supply levels. Nonetheless, Sappe expects to recover European stock sales in the second half of the year.
Regarding US tariffs on imports, Ms. Piyajit mentioned that exports to the US only account for about 5% of total sales, so the tariffs are unlikely to have a major impact. Instead, she expressed more concern over global trade uncertainties affecting consumer purchasing power in other countries.
She emphasized that predicting the overall market outlook remains difficult but believes Sappe’s presence in around 100 countries will help manage risks associated with global trade fluctuations.
Piyajit also stated that challenges are expected to persist in the international fruit juice sector, while the Thai beverage market is anticipated to remain stable. Overall, Sappe forecasts a 10-20% decrease in sales for the current year.
