This month, Ray Rowlands of Drinksinfo Ltd casts his eye over Habu, the latest soft drinks launch from The Coca-Cola Co in Thailand.

Thailand is sometimes referred to as 'The Land of Smiles' because of the friendly, cheerful nature of its 70m inhabitants. It is also one of the biggest carbonates market in Asia and as such is of major importance to the likes of The Coca-Cola Co and PepsiCo.

Category demand still remains solid here and, indeed, it received a major volume boost last year aided by a warm summer. But, as carbonates consistently lose share on the world soft drinks markets, Coca-Cola has learnt that diversification is a major factor in continuing company success. Its beverage interests have subsequently extended into hot drinks (eg, the Far Coast brand in Canada), water coolers (Ciel in Mexico) plus beer, flavoured milk and spirits (in Australia). Everything, it seems, except wine: Rouge Sucette, a cola flavoured wine launched in France this year, is not part of the Coca-Cola stable.

It is somewhat surprising, then, that, despite the prevailing popularity of carbonates in Thailand, the company has not really expanded its beverage business here as well. It does have a major stake in local company Thai Nam Thip which, besides being a Coca-Cola bottler, is also a leading player in the Thai bottled water category. But, other than that, Coca-Cola has not especially extended its soft drinks interests far beyond carbonates.

One sector in which it is involved is juice drinks. Whilst innovation within the Thai carbonates portfolio has been minimal, the company has been actively developing its Minute Maid brand, first introduced in 2005. Last year it added two new items: Minute Maid NutriBoost (combining milk and juice) and a Minute Maid Pulpy flavour extension: white grape with aloe vera. But, to date, that is about where its soft drinks interests have ended.

After carbonates and bottled water, iced tea and iced coffee are two massive soft drinks categories in Thailand, yet Coca-Cola has no role in either category, not even via a franchise brand such as Nestea. The company has also shied away from any involvement in sports and energy drinks, despite owning some of the biggest sports drink brands in the world, ie, Aquarius and Powerade. Whilst its foray into energy drinks has not been overly successful around the world, it does now have distribution agreements with the Monster Beverage Corporation in other countries. Yet, these have not been extended (as yet) into Thailand. Instead, Coca-Cola has now decided to focus its attention on herbal drinks, an area which surely lies well outside of its comfort zone.

But, maybe it is not such a bad choice for Thailand.

Herbal products are an integral part of Thai culture. Thai people have been using herbal medicines for hundreds of years and they are regaining acceptance after losing some credibility in the early part of the 20th Century. Herbs (and spices) are also an essential part of Thai cooking, used in combination to help achieve a balance of the four fundamental Thai tastes: salty, sour, spicy, and sweet. Herbal teas (such as ginkgo, jiaogulan and lemon grass) are similarly popular here. Indeed, according to a Coca-Cola spokesperson, together with carbonates and bottled water, herbal beverages, including herbal-infused and tea-based drinks, are amongst the top three most popular drinks in Thailand and one of the fastest growing categories (+25% over the past three years).

Herbal beverages are reportedly worth THB21bn. It is difficult to convert this value over to a volume basis, as herbal drinks will cover both leaf teas and powdered products, as well as ready to drink beverages, but I think it is safe to say that we are talking well in excess of 500m litres. It is into this market that Coca-Cola now intends to tap.

Last month, the company launched Habu, a name that was reputedly chosen because it is easy to pronounce with similarities to the English word 'herbal'. Unfortunately it is also the name of some venomous snakes found in Japan, but a good try all the same. The drink is designed for everyday consumption and is described as a cooling drink suitable to combat Thailand’s tropical climate. Also in its favour is that it will doubtless appeal to the growing number of health conscious consumers whilst its association with Coca-Cola should also draw in the younger drinker. Moreover, at just THB12 for a 28cl PET bottle, it is well within the price reach of a large proportion of Thai consumers. 

Habu’s main ingredients are cogan grass, liquorice, luo han guo, and roselle. These present an interesting mix. Cogan grass is claimed to treat fevers, though it has erstwhile also been described as an invasive perennial with little economic value. Licorice is employed to ease coughs, soothe ulcers and stomach inflammation, and control blood sugar. In traditional Asian medicine it is also commonly added to harmonize other ingredients in a given formula. It is said that the Chinese call luo han guo, the "longevity fruit" because in Guangxi Province where it is grown an unusual number of residents live to be over 100. It also acts as a sweetener. The roselle plant is considered to have various medicinal values and is said to lower cholesterol. It is a popular ingredient in Asian tea preparations.

Coca-Cola obviously has high hopes for the brand. The company is backing it with a promotional spend of THB160m (about US$5m) supporting a one year campaign entitled “Habu Cooling”. This will cover all major media channels and feature two Thai celebrities - Charoen ‘Kohtee’ Onlamai and Tanawat ‘Pope’ Wattanaputi. This is in conjunction with a nationwide giveaway of one million samples.

What’s more, if Habu proves successful in Thailand distribution could be expanded to other countries. It is certainly an interesting digression from Coca-Cola’s usual soft drinks business.

If it works, I wonder if we will see this US colossus widening its innovative reach into health foods as well.