Thai Beverage Sector Set for Rebound as Domestic Spending Recovers
Thailand’s beverage industry is poised for recovery in the second half of 2024 as domestic spending improves, driven by accelerated government stimulus and a resurgent tourism sector. Analysts expect both alcoholic and non-alcoholic drink producers to benefit from rising consumer confidence and lower inflation.
Krungsri Securities has issued a positive outlook for the Thai beverage sector, citing a combination of increased domestic consumption, easing cost pressures, and higher tourist arrivals as key drivers of growth. The consumption rebound is expected to be most notable in the third and fourth quarters of the year, with volume growth playing a central role.
Major Players Stand to Gain
Thai Beverage Pcl. (SET: THBEV) and Osotspa Pcl. (SET: OSP) are among the key beneficiaries of the improved market sentiment.
THBEV, which owns top beer and spirits brands across Southeast Asia, is set to capitalize on rising alcohol consumption domestically and in neighboring countries. The company is also expected to benefit from continued product premiumization and the return of local events and festivals, which typically drive up alcohol sales.
Osotspa, one of Thailand’s leading energy drink manufacturers, is on track to see improved profitability in the latter half of the year, supported by falling raw material costs—particularly aluminum and sugar—and improved operating efficiency. OSP’s strategic focus on premium segments and international expansion, especially in CLMV (Cambodia, Laos, Myanmar, Vietnam) markets, is also expected to fuel its growth trajectory.
Cost Relief and Unified Excise Tax Boost Profitability
Lower commodity prices are easing margin pressures across the sector. Additionally, the implementation of a unified excise tax structure for both alcoholic and non-alcoholic beverages is set to simplify compliance and reduce tax burdens in certain categories, further aiding manufacturer profitability.
Analysts also highlighted the low-base effect from H2 2023, when consumption was subdued due to economic uncertainty and cautious consumer spending, offering favorable year-on-year comparisons for 2024 performance.
With the beverage sector’s fundamentals improving and macroeconomic tailwinds gaining strength, Thai FMCG firms are entering a hopeful phase of recovery—especially those positioned to tap into domestic demand and regional growth opportunities.