The most important market segments of carbonated drinks, energy drinks, beer and spirits are now becoming saturated, while the government is also introducing measures that aim to cut consumption of potentially harmful products, including alcoholic drinks and those with a high sugar content. Beyond this, purchasing power in the lower end of the market remains soft and this weakness continues to weigh on the market.
Thai drinks producers will be able to generate additional income from establishing production facilities overseas but at the same time, this will reduce the contribution to company balance sheets of exports of Thai-based production.
Globally, beverages form a significant world industry with continuing growth Figure 1 and in , the sector had a combined value of around USD 2. The sector has seen steady expansion and between and , growth in consumption averaged an annual figure of 3. The world market is split into two major segments. The markets for these two major segments are described in more detail below Figure 2. The domestic Thai beverage industry outputs a comprehensive range of product lines, both in terms of production and consumption.
The industry is also closely tied to related sectors, such as the upstream production of raw materials especially of sugar and packaging, and as such production of a wide range of drinks is possible and domestic consumer demand can largely be met; imports of drinks are mostly restricted to expensive goods at the top end of the market, such as whiskey and wine.
In , the domestic market for beverages was worth THB bn and consumed 7, million liters of drinks. The latter was divided between the non-alcoholic and alcoholic segments in the ratio but by value, the relative importance of the two segments flipped to a ratio of Details are as follows figures Spirits: The production of spirits is tightly regulated by the authorities and this makes it difficult for new players to compete in the market. The major types of non-alcoholic drinks are as follows: Bottled water: This industry requires high initial levels of capital but the continuing development of machinery and technology to filter water means that this can now be done to a very high standard at low unit costs and as such, the number of new entrants to the market is increasing.
These brands are distributed through retailers, modern trade outlets, restaurants, and online and through direct sales to home and office purchasers. In addition to these, local brands also serve immediate, local markets, and there are more than of these upcountry selling to restaurants and street food stalls. Carbonated drinks: This market has the features of an oligopoly because new players have to invest significant capital reserves in the purchase of machinery, a fixed cost, that they will then hope to recuperate by producing in large enough quantities to generate economies of scale, and because they usually have to import ingredients from a parent company.
In the case of energy drinks, this is to enable them to price their goods cheaply and so successfully reach the domestic market, which in Thailand is overwhelmingly blue collar in composition; this in contrast to the market for energy drinks in areas such as the United States, Europe, Japan and South Korea, where the market also extends to white collar workers and students, in addition to manual laborers.
Marketing strategies that emphasize developing many brands as a way of preserving market share also work as barriers to entry against new players and so at present, there are three market leaders: Osotspa operating under the brands M, Lipo and Shark ,TC Pharmaceuticals Red Bull and Ready and Carabao Group Carabao Dang. Energy drinks: Growth in the market has followed income growth for the main customer base of laborers and agricultural workers, a group whose spending is sensitive to changes in economic circumstances.
Alcoholic drinks. Although per capita consumption of alcohol in Thailand is the highest in the ASEAN zone, average rates of growth in the market are relatively low Figure 9.
The situation is described in detail below. The review of the basis for calculating duties from factory-gate prices for domestically-produced drinks or CIF prices for imported drinks to one based on the recommended retail price, less any sales taxes, had more significant consequences for Thai-made alcoholic drinks than for imported ones and this has then led to the former carrying a heavier tax burden.
Exports of non-alcoholic drinks will tend steadily to decline as plans to establish or to expand production facilities in the ASEAN zone home to the main export targets by Thai producers are put into effect.
Thus, Osotspa is in the process of building a facility in Myanmar between and , the Carabao Group plans shortly to build an energy drinks factory in Vietnam and to increase production capacity in Myanmar, Malaysia and the Philippines, Coca Cola plans between and to expand its production capacity in Malaysia and the Philippines, and between and TC Pharmaceuticals plans to invest THB 50 bn in building and expanding factories making energy drinks in Europe and the ASEAN zone.
Producers of soft drinks will therefore begin to generate income from these overseas sites and this will replace their current exports. Sales of soft drinks within the CLMV zone are still relatively low Figure 11 , while incomes are rising, populations are becoming increasingly urbanized, and Thai soft drinks tend to be favored by consumers in these countries, all of which points to significant opportunities for Thai producers to build markets in the CLMV region.
The alcoholic drinks part of the industry will follow a similar trajectory through , returning to growth but with the extent of this growth somewhat limited Table 4. Government controls on marketing and advertising, the establishment of alcohol-free zones, and public awareness campaigns that aim to reduce alcohol consumption will all tend to restrain any expansion of the market, while continuing low levels of income in the agricultural sector will hold back growth in the lower-end of the market.
The segment will be helped by an improving economic outlook and by marketing drives undertaken during major sporting events, which help to boost sales in restaurants and pubs, bars and other entertainment sites.
Craft beers in particular are becoming increasingly popular and large Thai breweries have responded to this growing consumer demand by beginning to brew craft beers of their own in-country[11]. Beyond this, breweries are also introducing new product lines to reduce both the alcohol content and the serving sizes as a response to the changes in tax described above and so keep retail prices low, moves that should have a stimulus effect on the market.
At the same time, some consumers are showing a greater interest in their personal health and this will mean that low- or no-alcohol beers[12], a new segment of the market that is becoming more prominent worldwide, will take on greater importance and may steal market share from traditional beers. The increase in price that has been caused by higher duties may restrict growth in sales to lower income groups, such as agricultural and construction workers.
Distillers plan to meet this challenge by introducing new premium lines[13] and this may help to stimulate sales at the upper end of the market. These might include vitamins, herbs, or fruits and vegetables. The minimum wage is now at 7 different bands and the exact rate is set on a province by province basis, depending on the economy and costs of living of each. This is with the exception of sales in international airports and designated entertainment zones, for which separate regulations exist.
These new laws came into effect on 23 January, The American Craft Beer Association divides craft beer breweries into has the following characteristics. These products are therefore imported to Thailand for distribution as well as being marketed in other countries in the region.
As its name suggests, this is a wheat beer and it was followed in June by the release of EST. There are now over 50 Thai and foreign craft beers in the market. In Thailand, the market for alcohol-free beer is small and specialist and since as yet no Thai breweries produce their own alcohol-free beer, sales are of imported products.
Prominent brands include Heineken 0. This is targeted both at the domestic market and at exports to the ASEAN zone and northern Asia and should come on sale at the end of About Krungsri.
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Cookies Notice. Setting Accept. Always Active. These cookies are necessary for the basic functionality of our website. The goals that are set are shaped by factors, which include the organizational structure and culture, the economic situation, national culture, available resources, cognitive and moral rules, and their own personal attributes. Managers in the hospitality industry face a more uncertain and complex work environment than in many other industries due to its unique service charac- teristics.
They often act in a seemingly ad hoc way constantly responding to the unexpected resulting from the changing environment.
The way that managers choose to perform the tasks is not always consistent either. However, each managerial activity is often associated with a certain management function. In other words, the purpose of a managerial behaviour can be linked to one of the key functions of management. The manager may also recognize some weaknesses in service and, consequently, introduce appropriate training activities for staff.
Since managers, including those in the hospitality industry, are responsible for the success of their organizations or organizational units, they also need to carry out these functional duties. Within an international work environment, hospitality managers must be also competent in appreciating cultural differences and dealing with various situations appropriately. While this model sets the background to what managers should be doing, research conducted on behalf of the HCIMA now the Institute of Hospitality by the University of Surrey Gamble et al.
These incidents were then categorized into the four key areas of managing operations, managing the business, managing people and personal skills. Each of these areas was then divided into categories. These 15 cat- egories represent the key areas of skills and knowledge that any manager in the hospitality industry needs in order to be effective. The areas and subcategories are illustrated in Figure 1. Analysing the incidents against the main category areas by level of management provides the data shown in Table 1.
This would equate to a unit cater- ing manager working for a contract catering company, an execu- tive chef, or the food and beverage manager of a small hotel. This would equate to the food and beverage manager of a large hotel with extensive restaurant, conference and banqueting facilities, or the manager of a small number of catering contracts. The analysis by managerial level, shown in Table 1. This was strongest in day-to-day operations and specialist knowledge but when it came to a crisis the junior managers were more likely to call in their unit or general manager.
Owners also get heavily involved in sorting out the crises that may occur within their businesses. Sector comparisons show that hotels and restaurants reported the heaviest emphasis on managing operations while employee catering had the lowest.
The area of managing the business included aspects of manag- ing business performance, managing projects, managing strate- gic decisions and managing legal complexity. Across the whole sample, this area was in third place behind personal skills and managing operations. This suggests that managers as a whole may be becom- ing more business oriented but only when they have reached a position of some seniority with an organization.
The managing people area covered managing individuals, managing teams, managing external contacts and managing per- sonnel administration.
It was therefore surprising that, given the labour intensity of many sectors of the industry and the natural importance given to this area, there were relatively few reported incidents in this area.
One explanation for this anomaly is that the interpersonal skills involved in managing people are not included in this section but are categorized as more generic per- sonal skills. Analysis across managerial level shows unit man- agers having the highest score in this area with junior managers and owners having low scores. The area of personal skills includes a range of generic or trans- ferable skills that cover making verbal or written presentations, training, interpersonal skills, using computers in management and self-development.
There were more incidents reported in this area than any other and most of these were in the interpersonal skills area, followed by making presentations and training. Using computers in business showed comparatively few incidents and incidents to do with self-development were sadly, for an indus- try that seemingly values training highly, very sparse. All levels of manager reported large numbers of incidents in the area of interpersonal skills, especially the junior managers who would be new to having to handle these situations.
This necessitates the devel- opment of an effective system of control for all areas concerned with the food and beverage function.
Working within these three broad policies of the establishment, the food and beverage department is then able to detail its objectives. First, they are involved in the planning process — setting object- ives, making decisions about which direction the organization should take, that is, formulating policies. Second, managers decide how these objectives should be achieved and by whom. This involves analysing tasks and assigning them to individuals or groups.
Third, managers are involved in staff motivation in such a way as to move the organization through them in the direction formulated at the planning stage, to achieve the stated objectives. Fourth, managers have a controlling function includ- ing the comparison of actual performance to that forecast at the initial planning stage and taking any necessary steps to cor- rect any deviation from agreed objectives. The controlling may be done by observation, by analysis of accounting records and reports or by analysis of recorded statistical data.
These four management functions — planning, organizing, motivating and controlling — can be translated into the func- tions of the food and beverage manager. Such policies would be decided at a senior level of management. Here food and beverage managers work in conjunction with the personnel department in producing job descriptions and appointing on-the- job trainers to help train new staff.
The motivation of the staff of the food and beverage depart- ment is an important function of food and beverage managers. Finally, there is the element of control in the food and bever- age department. This involves the checking of actual perform- ance against expectations or forecasts, and in the case of any wide deviations, to locate the problem area and rectify it, and to take whatever steps are possible to prevent the problem occur- ring again.
The functions of food and beverage managers in coordinating the food and beverage department are therefore numerous, and it is important that they should use all the tools of management available to them.
An organization chart should be produced showing the position of the food and beverage department within the context of the total establishment. An organization chart presents graphically the basic groupings and relationships of positions, and a general picture of the formal organization structure. In larger units, departmentalization becomes more apparent. In this example, the food and beverage manager has six sub- ordinate managers acting as departmental heads and then fur- ther levels of assistant managers and the operational teams themselves.
Some units are, of course, too small to adopt anything like this type of organization structure. In this instance, the proprietor would also operate as the control department, monitoring all incoming and outgo- ing revenues and costs, but overall the same main activities still have to be covered. It is also important to supplement the organization chart with a job description.
College education, hotel or business administration degree preferred. To prepare quarterly forecasts and business-achieved reports for each Food and Beverage operating department. To coordinate the development, interpretation and implementation of hotel policies, operating procedures and training programs, manuals, directives, menus, work schedules, rules and regulations for the food and beverage staff and personnel.
To maintain up-to-date records on food and beverage staff personnel attendance, appearance, standards, work and vacation schedules, labor costs, payroll, absenteeism, turnover and disciplinary action. To approve the employment and termination of food and beverage staff. To coordinate the selection, purchasing, storage, inventorying, maintenance and usage of all related food and beverage supplies and equipment.
To handle all guest comments in the food and beverage area. To obtain maximum revenue results from the utilization and appearance of the food and beverage areas.
To maintain current prices and approved purveyors listed based on quality, service and cost of all related food and beverage items for requisitioning purposes, store inventories, cost control procedures and forecasts. The ability to aid each Department Head in giving the necessary training to their staff and to assist them in it.
To develop and maintain effective communications between all operating departments. To respond properly in any hotel emergency or safety situation. To perform other tasks or projects as assigned by hotel management. Tasks are broken down into a care- ful sequence of operations and timed. They are particularly use- ful in training new employees and for lower-grade jobs, but have a limited application at the supervisory and management level.
In general, the main responsibilities and objectives of the food and beverage department may be summarized as follows: 1. Identify where there are any differences between the two?
Why might these differences exist? These are the major responsibilities and objectives of a food and beverage department. Other minor objectives do become impor- tant during the day-to-day running of the department, but these often tend to deal with sudden crises or short-term problems and would be too numerous to mention.
Constraints on food and beverage management The management of food and beverage departments has been described as the most technical and complex in the hospitality industry. They originate outside the organiza- tion and for this reason internal action can rarely solve the prob- lem adequately, although pro-active management may help to reduce their impact. Some of the major external pressures affect- ing the food and beverage function are listed below.
One key factor for all food and beverage managers is to understand their customers, the trends in the eating our market and the nature of the meal experience they need to provide. The customer is present at the time of both production and service.
In manufacturing the customer is not present during the production process. The customer is not involved in the creation of manufactured prod- ucts and there may be a considerable time lag between produc- tion and service. For all these reasons, the time that the customer spends in the operation and what happens to them during that time is of particular importance. However, any feelings customers may have when they arrive at the restaur- ant, and when they leave, should also be taken into account and included as part of the total meal experience.
The series of events and experiences customers undergo when eating out may be divided into those tangible aspects of the product, that is, the food and drink, and those intangible aspects such as service, atmosphere, mood, etc. See Chapter 11 for a fur- ther discussion of tangibles and intangibles in food and bever- age operations. These two components of the meal experience have also been labelled primary and secondary products or core and peripheral elements but although differing in descriptive terms, the under- lying concept is the same.
It is the appreciation of the different components by the caterer that is important; the tangible and the intangible aspects must be integrated together to present a total product to the customer. Pine and Gilmore argue that in order to differentiate your operation in an era of high competition and the increasing commoditization of service there is a need to provide the cus- tomer with a memory of an experience that they can take away with them rather than just a good product or service.
It could be argued that many restaurants have been in this business for a long time, but some operations are taking it even further. That could call for low lighting, green tea, worry stones on the tables and a relaxed mix of instrumental music.
Those wishing to generate team-building and brainstorm for new projects might consider a joint cooking session, bowls of almonds reputed to be brain food and even board games. Kimpton Hotels began its Signature Meetings initiative last year and now allows clients to customize by selecting from a menu of items and services. They can select fruit smoothies, organic coffee and tea or whole- grain cereals for breakfast, and add fun foods including Pop-Tarts, Lucky Charms, macaroni cheese and hot dogs.
Omni Hotels launched a similar campaign — dubbed Sensational Meetings — earlier this year. They offer wheat grass shots, juice shots in test tubes, almonds in bright bowls, chocolate with mandarin orange, wild sweet orange vitamin C tea, sparkling pom- egranate drink and use brightly coloured table linen and pens with bright inks in an environment scented with lemon.
They offer green tea with jasmine, dark chocolate with lavender, apple cinnamon macaroons and also provide worry stones and blue table linen in an environment scented with lavender, juniper and aloe. Before customers set out to any operation for a meal, they may already have decided on the type of meal they want or feel would be most suitable for that particular occasion.
Equally, people decide to go to a restaurant for no other reason than to dine with friends. For those people who eat out infrequently, may be two or three times a year, the celebration of a special occasion is the most important reason. As the number of meal occasions per year rises, to over four times a year, there is a corresponding increase in the variety of reasons given, for example, to social- ize with friends and relatives, as a treat for self or spouse, as a change from eating at home, etc.
Generally speaking, the level of restaurant chosen will depend on the level of business being conducted, so that the more import- ant and valued the business, the more expensive and up-market will be the restaurant. Business lunches and dinners are still the most common, although working breakfasts and afternoon teas are also common. A working couple arriving home may decide to eat out rather than prepare something at home; they do not wish to travel far, nor do they want an elabor- ate meal, so they choose a local pub, pizzeria or Thai restaurant.
A family out shopping at the weekend decide to have lunch in a fast-food operation in the high street. A long-distance commuter has a meal onboard a train knowing that he will arrive home late that evening. Housewives out shopping decide to stop for a snack in a shopping centre food court. All of these are typical examples of convenience eating away from home. They are convenient sometimes in terms of location, sometimes speed, because of the limited amount of time a cus- tomer has for a meal, and very often a combination of the two.
These facilities are also often attractive because of their convenient locations. Generally speaking, the higher the disposable income, the higher the trade-off level.
If they thought the meal was likely to cost more then they would trade-off the meal experi- ence at a restaurant for a meal at home, or perhaps a cheaper take-away meal.
Once customers have decided on the type of meal they want, they will start to accumulate differ- ent expectations and anticipations. The analysis of who the customers actually are is also necessary information, not only for caterers in general, operational management in par- ticular, but also for marketing management. The size and distri- bution of the eating out market is illustrated in the Table 1.
Much less growth has been seen in ethnic restaurants and in dining in hotels. The analysis of those who eat out can be done in many ways. For example, it can be done by age, by gender, by socio-economic class and by the frequency of eating out — whether once, twice, or three or more times a week.
Note: some historical data has been revised a excl. An example of an analysis of the types of establishment visited and frequency of visit based on a sample of 2, adults aged 15 and over is shown in Table 1. This does not preclude the smaller-size establishment from undertaking systematic research studies, although the sample size is likely to be smaller and the time available to do so is restricted. Italian, vegetarian Other ethnic 11 28 18 15 9 7 2 restaurant e.
July Table 1. Research of this nature to understand the needs of the customers should always be ongoing, and not just of an occasional nature.
Food and drink The type of food and drink that people choose to consume away from home depends on a number of factors which are of particu- lar concern to food and beverage managers. British restaurants appear to be more skewed towards an older clientele while pizza and pasta are skewed in the opposite direction. Variety in menu choice The type of menu offered by an establishment and the variety of menu choice should also enhance the total meal experience.
At the lower level of the market the choice of menu items in a restaurant is usually fairly limited for a number of reasons. First, price. Second, the amount of time taken to consume meals at this level of the market may vary between half an hour and one hour, but will rarely exceed this.
Proportionately, little of this time is spent studying the menu choice. Third, it may be sug- gested that customers frequenting this lower level of the mar- ket may be uncomfortable if presented with a very large menu selection and may therefore prefer a more limited, but still var- ied menu choice. In these establishments which encourage a luxury meal experience, the minimum amount of time customers usually spend on a meal is one and a half hours, and may often be three hours, depending on the size of the group and the occasion.
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