''We're strong in household [goods] and would like to strengthen our presence in body or personal care. We hope the acquisition would materialise over the next two years,'' said Chooi Khim Tan, general manager of Sara Lee (Thailand).
''We like a local company, whose brand is better known and to which a Thai consumer can relate. The company we buy would probably double our current business.''
Apart from its annual adverting budget and the planned acquisition, Sara Lee is preparing to invest 8-10% of its sales to expand the production capacity of its existing coffee factory at the Navanakorn Industrial estate over the next two years. It increased coffee production capacity by 30% in the last fiscal year and plans a further 20% increase this year.
Sara Lee has been in Thailand for almost 20 years, with major brands including Moccona coffee, Kiwi Shoe shoe-care products, Kiwi Clean household cleaners, and Ambi Pur air-care products.
The company's sales topped 1.2 billion baht in the fiscal year that ended on June 30, an increase of 26% from the same period last year. Moccona accounted for 60% or its turnover, Kiwi brands 30% and Ambi Pur the remaining 10%.
Moccona is currently No. 3 in the Thai coffee market, Kiwi Shoe dominates its segment and Ambi Pur is the No. 2 brand in air-freshener market.
According to Ms Tan, the company's business remained strong this year, with sales in the first half to dec 31 expected to rise by up to 40% spurred by 60% growth for Moccona and 40% for Ambi Pur.
The growth of the two products has been helped by strong advertising campaigns and more provincial distribution.
The company spends an average of 20% of its annual sales on advertising and could spend up to 25% this year, particularly in coffee, she said.
According to Ms Tan, the Thai coffee market remains very attractive with annual growth averaging 15%. Most of the growth is coming from instant coffee, at 30%, compared with only 4-5% growth in the pure soluble coffee market.
Over the past three years, mixed instant coffees have been the fastest-growing segment. They now make up 52% of all coffee sales totalling about eight billion baht, compared with 41% three years ago.
Continuous growth is foreseeable for mixed coffee, Ms Tan said, noting that in developed markets the product accounts for up to 70% of sales given its convenience and affordability. To capitalise on the trend, Sara Lee has just introduced Moccona Trio Espresso and Moccona Cereal.
''The company is in the process of testing new ideas to look into what consumers want and benefits we could add to the coffee besides just a cup of coffee. There will be more to come,'' she said.
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