In this article we will discuss the state of the beverage industry in Cambodia, including its development, key players within the sector and the challenges faced.
We will also explore what will factor into the industry’s growth going forward and opportunities for investors. If you want more in-market information from the experts, view our dedicated cross-sector map of the business environment here, or get in touch with our expert team.
How has the beverage industry in Cambodia developed?
The Cambodian beverage industry began to develop rapidly in the early 2000s, driven by a number of factors including the country’s growing economy, increasing urbanization, and rising incomes.
One of the most significant developments in the Cambodian beverage industry was the launch of Angkor Beer in 2006. Angkor Beer quickly became the country’s most popular beer brand, and it is now exported to over 50 countries around the world.
Another important development was the entry of international beverage companies into the Cambodian market. In 2007, Coca-Cola opened a bottling plant in Cambodia, and PepsiCo followed suit in 2008.
The Cambodian beverage industry has continued to grow steadily over the past decade. The beer market in Cambodia was worth $1.03 billion in 2015 and is forecast to reach $2.20 billion by 2025, according to the data company Market Research. The report showed the average consumption per capita in value terms reached $67.42 in 2015.
Who are the main actors in the beverage industry in Cambodia?
The main actors in the Cambodian beverage industry include:
- Angkor Brewery
- Coca-Cola Cambodia
- PepsiCo Cambodia
- Cambodia Beverage Company (CBC)
- Khmer Beverage Company (KBC)
- Cambodiana Breweries Limited (CBL)
In just the last two years, Vattanac Brewery Ltd and Hanuman Beverages, joined a market already crowded with four major existing breweries: Cambrew, Khmer Beverages, Cambodia Brewery Ltd, and Ganzberg Brewery.
The two newcomers have collective investment worth more than $300 million (source)
What are the challenges faced by the beverage industry in Cambodia?
The Cambodian beverage industry faces a number of challenges, including:
- Competition from international beverage companies
International beverage companies have a significant presence in the Cambodian market, and they are able to offer a wide range of products at competitive prices.
- High taxes
The Cambodian government imposes high taxes on some beverages, which can make them less affordable for consumers (source). The current special tariffs on locally produced alcohol and tobacco products include a 30 per cent tax on all beers, 35 per cent on alcoholic beverages, and 20 per cent on various types of cigarettes.
- Limited infrastructure & production
The Cambodian beverage industry is hampered by limited infrastructure, such as poor roads and inadequate storage facilities, as well as a limited number of factories to produce goods needed in the beverage industry. However, this is changing as further investment and development enters the industry. (source)
How is the beverage industry in Cambodia expected to develop going forward?
The Cambodian beverage industry is expected to continue to grow in the coming years. This will be driven by a number of factors, including:
- Growing population
Cambodia’s population is expected to grow from 16.7 million in 2022 to 20 million by 2030. This increase in population will boost demand for beverages.
- Rising incomes
Cambodia’s incomes are expected to continue to rise in the coming years. This will give consumers more disposable income to spend on beverages. The Cambodia GDP per capita PPP is projected to trend around 5110.00 USD in 2024 and 5406.00 USD in 2025, according to Trading Economics.
- Increasing urbanization
Cambodia is becoming increasingly urbanized, with more and more people moving to cities. This will lead to increased demand for beverages, as city dwellers tend to consume more beverages than rural dwellers. The share of urban population in Cambodia increased from around 21% to over 25% between 2012 and 2022, with the share continuously increasing. (source)
What is the size of the Cambodian Beverages eCommerce market in 2023?
The Cambodian Beverages eCommerce market is predicted to reach US$44.8 million by 2023 and accounts for 36.8% of the Food & Beverages eCommerce market in Cambodia. It is expected to increase over the next few years.
The expected compound annual growth rate for the next four years (CAGR 2023-2027) will be 8.9%, resulting in a projected market volume of US$63.1 million by 2027. The Beverages eCommerce market is a sub-market of the Food & Beverages market.
In the Cambodian Beverages retail market, the online share is 2.1% and will increase by an average of 6.0% to 2.6% by 2027.
What are the opportunities for investors and businesses in the beverage industry in Cambodia?
There are a number of opportunities for investors and businesses in the Cambodian beverage industry. These include:
- Investing in existing beverage companies: There are a number of well-established beverage companies in Cambodia that are looking for investment to expand their operations.
- Launching new beverage brands: There is still room for new beverage brands to enter the Cambodian market. Investors and businesses can look to launch new brands that cater to the specific needs and preferences of Cambodian consumers.
- Investing in the beverage supply chain: The Cambodian beverage industry is hampered by limited infrastructure and a lack of skilled workers. Investors and businesses can look to invest in the beverage supply chain to help address these challenges.
What can be learnt from regional examples and applied to the beverage industry in Cambodia?
Thailand’s beverage industry is one of the most developed in Southeast Asia. The country is a major producer and exporter of beverages, including bottled water, beer, carbonated soft drinks, and fruit juices. Thai companies have been successful in exporting their products to international markets, including China, Vietnam, and the United States.
Lessons from Thailand’s Beverage Industry:
- Focus on innovation: Thai companies have been successful in innovating new products and packaging solutions. For example, they have developed new types of bottled water that are more convenient and portable.
- Emphasize quality control: Thai companies have a strong reputation for quality control. They have implemented strict quality control measures to ensure that their products meet international standards.
- Invest in brand development: Thai companies have invested heavily in brand development. They have created strong brand identities that resonate with consumers.
Indonesia’s Beverage Industry
Indonesia’s beverage industry is another example of a successful regional industry. The country is home to a number of large and well-established beverage companies, such as Coca-Cola Indonesia and PT Indofood Sukses Makmur Tbk. These companies have a strong presence in the domestic market and are also expanding into international markets.
Lessons from Indonesia’s Beverage Industry:
- Build strong distribution networks: Indonesian companies have strong distribution networks that reach all corners of the country. This has been essential for their success in the domestic market.
- Develop effective marketing campaigns: Indonesian companies are known for their effective marketing campaigns. They use a variety of marketing channels to reach their target markets.
- Adapt to local preferences: Indonesian companies have been successful in adapting their products to local preferences. For example, they have developed new flavors of beverages that are popular with Indonesian consumers.
What can we apply regional lessons to Cambodia?
Businesses and investors in Cambodia can learn valuable lessons from the success of Thailand’s and Indonesia’s beverage industries. By focusing on innovation, quality control, brand development, distribution networks, marketing, and local preferences, Cambodian businesses can increase their chances of success in the domestic and international markets.
In addition to these general lessons, there are also specific regional examples that can be relevant to Cambodian businesses. For example, Thai companies have been successful in exporting their products to neighboring countries like Laos and Myanmar. Cambodian businesses could follow a similar strategy and focus on exporting their products to neighboring countries like Vietnam and Thailand.
Indonesian companies have been successful in developing new products that cater to the needs of lower-income consumers. This could be a valuable strategy for Cambodian businesses, as a significant portion of the Cambodian population is still considered to be low-income.
What are the key takeaways for investors in the beverage industry in Cambodia?
The Cambodian beverage industry is a growing and dynamic industry with a number of opportunities for investors and businesses. The industry faces a number of challenges, such as competition from international beverage companies and high taxes. However, these challenges can be overcome by investors and businesses who are willing to invest in the industry and innovate to meet the needs of Cambodian consumers.
For businesses and investors to move into this space, they should seek local experts within the market. Get in touch with Aquarii for more information about how we can help navigate entry and development within the beverage industry in Cambodia and beyond.
- Euromonitor International, “Cambodia: Food & Beverage Market Research Reports & Analysis
- Mordor Intelligence, “Cambodia: Carbonated Soft Drinks Market Analysis, Size, Trends, Consumption, Opportunities, Challenges and Forecast – WM Strategy”
- Mordor Intelligence, “Cambodia: Non-Carbonated Soft Drinks Market Analysis, Size, Trends, Consumption, Opportunities, Challenges and Forecast – WM Strategy”
- UK-ASEAN Business Council, “Webinar: Opportunities and Challenges in Cambodia’s Food & Beverage Industry”