The beverage industry may take another year to fully recover from its 30-percent slump in volume in 2018 even as the country’s market leader in juice drinks continues its overseas and domestic expansion.
Alfredo Yao, owner and founder of Zest-O Corp., said the company will announce next week a major acquisition, an international beverage brand, to boost its portfolio in the Philippines.
Yao told reporters at the sidelines of the 45th Philippine Business Conference in Manila yesterday Zest-O is beefing up its presence in China, with the introduction of coconut-based and vegetable juice drinks in that market. It also continues to expand markets in Indonesia and Vietnam.
Locally, Yao said, Zest-O has retained market leadership despite a 30-percent volume decline of the entire beverage sector last year due to the imposition of tax on sugar-sweetened beverages.
Full recovery, he said, is normally a two-year curve.
Yao said Zest-O started seeing recovery in the last quarter of 2018, registering a much slower growth from the previous year.
To cope with higher tax, Yao said, the company just passed on the tax value and reduced the size of its drinks to remain affordable to the mass market.
Zest-O maintained the size of its staff but workers now render less overtime work, Yao said.
“Because of the sugar tax, we’re affected but we’re okay, still growing. Zest-O is catering to the mass market. Prices have gone. There’s an adjustment period … It may take another year because the (adjustment period) is two years, which is fast already,” he said.
Yao said Zest-O’s expansion to other parts of Southeast Asia as well as to China has enabled it to attain international brand status and introduce new products.
“We are targeting population-based (countries) like Asean which has 600 million people and China,” he said.