By David South, Development Challenges, South-South Solutions
SOUTH-SOUTH CASE STUDY
For many decades, strong American and multinational food brands have penetrated markets in the South. This is a global business success story for those companies, but the downside has been the marginalizing of local alternatives. This not only reduces wealth-creating opportunities for local entrepreneurs, but also leads to products like sugary soda pops (http://tinyurl.com/yzwal98) pushing aside healthier, local alternatives like tea.
But one company in Indonesia has been pioneering a healthy local drinks empire while also seeing off aggressive foreign rivals. Teh Botol Sosro, a tea drink in Indonesia bottled by family-owned business Sosro, was not only the first bottled tea brand in the country, but also in the world, it claims. The company started bottling the jasmine-flavoured black tea drink in the 1970s.
The Indonesian company has shown that it is possible for local flavours to beat powerful international brands like Coca Cola in the battle for drinkers’ palates. While Coca Cola has tried to sell many bottled tea drinks in the Indonesian market, they have not been able to push aside the local product, The Teh Botol Sosro. Brewed by the Sinar Sosro company, it has captured 70 percent of the non-carbonated drinks market.
It is a drink of cool, black, sweetened tea with a hint of jasmine. Invented by the Indonesian family of Sosrodjojos, Sosro (http://www.sosro.com/) was founded in central Java in the 1940s.
Culturally, Indonesians have either coffee or tea with their meals. The brand’s marketing slogan plays on this: “Whatever you eat, you drink Teh Sosro.”
The company has aggressively fought off competition not only from local rivals, but also from Coca Cola’s Frestea brand and Pepsi Cola’s Tekita. The company stayed sharp in its business strategy, never letting a rival product take hold. Just as a rival would introduce a new product, Sosro would reply with a new drink attuned to Indonesian tastes. This ability to not be complacent about the company’s success, and to use its knowledge of local tastes to always outsmart foreign competition, has kept the company where it is today.
Sosro pioneered bottled drinking tea with its launch in 1970 and started with a dried tea only distributed in Central Java.
The journey to cold, bottled tea is an amusing one. The company first wanted to promote its tea in Jakarta, the capital, by having public tastings. But by brewing the tea on the spot, the too-hot tea took too long to drink for impatient Jakartens. The solution was to not brew the tea on the spot, but instead to brew it off-site and deliver to markets in big pans on trucks. But the bad roads made this a bit of a mistake as well: the tea would spill on the journey.
The ‘aha’ moment came when the idea arose to store the brewed tea in bottles. The bottles were eye-catching and have evolved in design over the years.
The drink now comes in various packages, from a returnable glass bottle (220 ml) to a Tetra Pak (1 litre, 250 ml, and 200 ml) and a 230 ml pouch.
The Botol Sosro (http://www.sosro.com/teh-botol-sosro.php) is not the company’s only product: it also brews Fruit Tea, The Botol Kotak and S-Tee. The economic benefits of these popular brands stay local, as Sosro gets the tea from PT Gunung Slamet, which operates three tea estates covering 1,587 hectares in Indonesia.
1) Just Food is a web portal packed with the latest news on the global food industry and packed with events and special briefings to fill entrepreneurs in on the difficult issues and constantly shifting market demands. Website: http://www.just-food.com
2) Brandchannel: The world’s only online exchange about branding, packed with resources, debates and contacts to help businesses intelligently build their brand. Website: http://www.brandchannel.com
3) Small businesses looking to develop their brand can find plenty of free advice and resources here. Website: http://www.brandingstrategyinsider.com
4) Growing Inclusive Markets, a web portal from UNDP packed with case studies, heat maps and strategies on how to use markets to help the poor. Website: http://www.growinginclusivemarkets.org
5) Tea Genius: A website from Taiwan packed with information on tea, its health benefits and rituals. Website: http://www.teagenius.com/
As cited in Export Now: Five Keys to Entering New Markets by Frank Lavin and Peter Cohan (Wiley).
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