Uni-President eyes betel-nut vendors

Uni-President Enterprises Corp (統一企業), the nation's largest food-and-beverage maker, is aiming to boost its bottomline by selling bottled tea, coffee and mineral water at betel-nut stands nationwide, an executive said yesterday.

"This year we've designated betel-nut booths as a major distribution channel to boost beverage sales," said Uni-President spokesman Simon Hung (洪士民).

In an effort to build ties with betel-nut retailers, Uni-President linked up with a tobacco distributor and formed a joint venture in April.

The tobacco distributor has experience in dealing with betel-nut sellers and so Uni-President can enter the niche easier, Hung said.

With an increasing number of traditional retail stores shutting down because of slow sales, Uni-President has been forced to look for new distribution channels.

"We set up a special division to work with betel-nut retailers in March last year and this year we decided to spin it off," said Lin Cheng-te (林政德), a manager at Uni-President's distribution group.

The joint venture will mainly focus on business in the greater Taipei area and Uni-President is expected to set up another seven similar subsidiaries in other parts of the country next year.

According to Lin, traditional retailers such as mom and pop's stores account for 45 percent of the company's total retail sales and the remaining 55 percent of sales come from conveniences stores, supermarkets as well as hypermarts.

"We have no choice but to contact new retailers since the market for existing distributors is nearly saturated," Lin said.

Based on an estimated 100,000 betel-nut booths around the country Uni-President expects to generate annual beverage sales of more than NT$3.6 billion.

Uni-President hopes to make NT$30 million sales from the chan-nel this year, Lin said.

One retail-market watcher said the betel-nut network has great potential.

"Betel-nut stands are major outlets, especially for energy drinks, sports drinks and coffee," said Desmond Wang (王道平), communications manager at ACNielsen Taiwan.

According to ACNielsen statistics, 85 percent of betel-nut stand visitors are men and more than 50 percent of customers are between ages of 25 and 39. Trucks and taxi drivers are major customers.

At least one market watcher noted that the new retail channel may have a negative impact on Uni-President since betel nuts been associated with mouth cancer.

"Uni-President had better be cautious and try not to arouse too much brand attention with betel-nut stands," said Kuo Cheng (郭貞), a professor in the advertising department at National Chengchi University.

She said low brand awareness would not hurt sales, since most people who frequent betel-nut stands to buy drinks are buying them there for the convenience, not for the brand.

Uni-President is also considering creating a brand name just for its beverages sold at betel-nut stands.

Prices of these products are expected to be lower than most Uni-President brand items, Lin said.