Tea enjoys sparkling sales performance<\/p>\n
Agustina Wayansari, The Jakarta Post, Jakarta<\/p>\n
Bottled or packaged teas might still sound strange to many
\npeople, especially those from Western countries.<\/p>\n
In Indonesia, tea is extremely popular and in many parts of
\nthe country, it has become a daily refreshment. It is often
\nserved at meals instead of water.<\/p>\n
Compared to soft drinks, the market of ready-to-drink (RTD)
\ntea is still relatively small, but their sales volume continues
\nto increase periodically, and tea has become the rising star in
\nthe domestic beverage market.<\/p>\n
According to ACNielsen marketing research company, the
\nyear-to-year growth of the sales volume of RTD tea reached nearly
\n37 percent in the first quarter of this year.<\/p>\n
The sales growth of RTD tea, which includes bottled and
\npackaged teas, is far higher than the merely 16 percent booked by
\nbottled water and 2.9 percent by carbonated soft drinks (CSD).<\/p>\n
ACNielsen said that the RTD tea market in Indonesia is still
\nrelatively small compared to those of the bottled water and CSD,
\nbut it continued to show remarkable growth from time to time.<\/p>\n
Marketing analysts attributed the sharp increase in RTD sales
\nto aggressive sales campaigns launched by the country's RTD
\nproducers, particularly over the past two years. The government's
\nrecent decision to remove the 10 percent luxury tax on the drink
\nhas also contributed to the high sales growth.<\/p>\n
The tight competition in the RTD tea market became apparent
\nfollowing the entry of PT Coca-Cola Indonesia to the market last
\nyear.<\/p>\n
Coca-Cola, traditionally known as the producer of carbonated
\nsoft drinks, entered the tea market with its Frestea brand in
\nJune last year. First marketed only Jakarta and West Java, the
\nnew tea drink brand is now available in most parts of the
\ncountry. This new RTD tea brand continues to gain ground in the
\nlocal beverage market.<\/p>\n
The entry of Coca-Cola into the RTD tea market has prompted PT
\nSinar Sosro, the pioneer in the production of bottled tea, to
\nintroduce more RTD brands in a bid to retain its leadership.
\nPreviously, the company competed only with Pepsi Cola, the
\nproducer of Tekita, in the RTD market.<\/p>\n
Besides its Teh Botol Sostro brand, PT Sinar Sosro has
\nlaunched several new brands such Fruit Tea, which comes in the
\nform of a packaged tea in a variety of fruit flavors.<\/p>\n
Corporate Affairs Director of PT Coca-Cola Indonesia, Titie
\nSadarini, said the RTD tea market was still underdeveloped and
\nthus offered a considerable potential for growth.<\/p>\n
"With our brand, we want to offer more tea experiences than
\nother brands, particularly in regards aroma and taste," she said.<\/p>\n
She believes that with its strong marketing and distribution
\nnetwork, Coca-Cola will be able turn Frestea into one of the most
\npopular RTD tea brands in the country.<\/p>\n
"Affordability, and continued connection with consumers
\nsupported by a solid infrastructure remains vital to our success"
\nshe said.<\/p>\n
While RTD producers enjoyed some good news and a significant
\nsales growth, producers of carbonated soft drinks reported
\notherwise.<\/p>\n
Among the three categories of soft drinks, CSD is the only one
\nstill subject to the 10 percent luxury sales tax. The others --
\nbottled water and RTD tea -- have had the tax lifted.<\/p>\n
"We don't understand why the government is still imposing the
\nluxury tax on the CSD category," said Pudji Nurutami, managing
\ndirector of PT Nala Vini Eka Beverages, which produces Navika.<\/p>\n
Mugijanto, Chairman of the Association of Indonesian Soft
\nDrink Producers (ASRIM), also expressed his disappointment over
\nthe government's tax policy on CSDs.<\/p>\n
"The category, which used to determine whether one was
\nclassified as a luxury drink or not, is still debatable," he
\nsaid, citing a recent study conducted by the economic research
\ninstitution at the University of Indonesia (LPEM UI), which found
\nthat carbonated soft drinks lacked the characteristics that
\ndefined luxury goods.<\/p>\n
Just like bottled water and RTD tea, CSDs are consumed by all
\nsegments of society, he said, and that based on the study, CSDs
\nshould also receive the same tax treatment as that enjoyed by
\nbottled water and RTD tea.<\/p>\n
The discrimination in taxation has became the biggest barrier
\nfor CSD producers to further boost their market share. As a
\nresult, the industry suffered a major setback in their sales
\nperformance last year.<\/p>\n
ASRIM reports that the sales of the country's carbonated soft
\ndrinks dropped by more than 10 percent during the first half of
\nthis year. "One CSD producer even reported a 20 percent drop in
\nits sales in the same period," Mugijanto said.<\/p>",
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