Will the flagging green tea market send ThaiBev's Oishi unit into a tailspin?

The market contracted 2-3% in 2015.

There may be a turnaround on the horizon for Thai Beverage (ThaiBev), as its subsidiary Oishi Group Plc (Oishi) recently bucked market contractions with encouraging growth in both value and volume.

According to a report by OCBC, ThaiBev’s 79.66% owned subsidiary and SET-listed Oishi Group Plc stated that the ready-to-drink green tea market contracted 5% in 2014. In 2015, it contracted another 2-3%. This is on back of fewer new customers drinking green tea.

OCBC notes that despite the flatter growth in the broader market, the first five months of 2016 saw Oishi report a 12.7% jump in value, and a 10.1% spike in volume terms.

Management cited product innovation for the increase, as well as the launch of Oishi Green Tea Kyoho grape flavour as a driving factor.

On top of this, Oishi beverages’ market share climbed 38% to 43.6% YoY for the first time in five months, per data from AC Nielsen.

“In view of Thai Beverage’s long term strategy to increase revenue contribution from its non-alcoholic beverage (NAB) segment, the above data adds confidence to the eventual turnaround expected for this segment,” OCBC asserts.