Southeast Asia beverage market heats up with Carabao’s diversification into beer

Southeast Asian beverage markets, with Vietnam as a hub due to its population of almost 100 million people, are getting more crowded as Thai energy drink maker Carabao prepares to invest 4 billion baht (over $120 million) to produce beer locally.

Carabao product diversification places more pressure on ThaiBev, Thailand’s largest beverage maker, which owns Vietnam’s top beer maker Sabeco. ThaiBev acquired a 53.59% stake in Sabeco in late 2017 from Vietnam's Ministry of Industry and Trade for up to $4.8 billion as it sought to dominate Southeast Asia’s beverage sector.

Ho Chi Minh City-based Sabeco signed a deal in July 2022 to become the leading and exclusive partner for Vietnam’s national football teams (men’s and women’s), and men’s U23 squad from July 2022 to July 2025. The deal’s value was not disclosed. Prior to that, the brewer sponsored the Vietnamese sports delegation at the 31st Southeast Asian Games in May.

V-League 2023, Vietnam’s premier football event, kicked off on Friday with Vietnamese energy drink brand Night Wolf as the main sponsor for the championship, whose organizer is Vietnam Professional Football JSC (VPF). Therefore, the tournament’s official name is Night Wolf V-League 2023. Fourteen clubs are competing, including Hoang Anh Gia Lai FC, whose main sponsor is Thai brand Carabao.

Due to sponsorship reasons, VPF and Hoang Anh Gia Lai FC are in a clash in which Doan Nguyen Duc, chairman of the club, may bring the case to court to protect their rights. His foundation is that Carabao had signed its sponsorship deal with his club before Night Wolf became the sponsor of the Vietnamese league.

Prior to Carabao, Thai energy drink Red Bull was the main sponsor for Hoang Anh Gia Lai, whose current coach is a Thai national - Kiatisuk Senamuang. He is nicknamed “Thai Zico” by Southeast Asian fans to compare him with former Brazilian star Zico, who was also called “White Pele”.

In the Vietnamese consumer market of almost 100 million people, Red Bull is already the No. 1 energy brand despite fierce competition from other players, both international and domestic. Carabao is among them but its popularity is lower compared to Red Bull, and its sponsorship of Hoang Anh Gia Lai FC is its first-ever such deal in Vietnam sports.

In England, seen as the cradle of football, the EFL Cup is currently known as Carabao Cup for sponsorship reasons. Organized by English Football League (EFL), it is open to any club within the top four levels of the English football league system - 92 clubs in total - comprising the top-level Premier League, and the three divisions of the English Football League's own league competition, namely Championship, League One, and League Two. Carabao started this sponsorship contract in the 2017-2018 season.

Beer and energy drink brands are often seen as sponsors in sports. Red Bull has a team in Formula One car racing. For ThaiBev, after acquiring a controlling stake in Vietnamese brewer Sabeco in late 2017, the Thai giant put the “Bia Saigon” logo (“Bia Saigon” means Saigon Beer) onto the sleeve of English Premier League club Leicester City in a sponsorship deal whose value was not revealed.

In Vietnam, Carabao made its foray into the market in 2017 with Vietnamese firm Thien Ngoc Bao as sole distributor. The Thai giant claims its energy drink, recognized by a water buffalo head highlighted by a green foundation (carabao is a water buffalo), makes a market share of almost 17% in Vietnam.

Meanwhile, Vietnamese brand Night Wolf is a new energy drink brand, therefore expecting some market approval via Vietnam’s professional football business.

Carabao Group chairman Sathien Setthasit told Thai media late this January that his corporation would invest 4 billion baht to produce beer in Thailand to be marketed in the fourth quarter of this year. It has yet to choose a brand name or reveal product pricing. Setthasit just revealed that the beer would be of a German style and a German brewmaster would help start production.