Issue 36

Fifty six years after the Khao Shong Coffee founder discovered coffee beans in a national park in southern Thailand, this family-run business is expanding overseas after achieving success at home.

Euromonitor reported in July 2015 that Thailand’s coffee-drinking culture is growing with more coffee chains and a wider range of coffee products for consumers. Consequently demand for raw coffee beans in the country is continually on the up, with the Department of Internal Trade forecasting that in 2015 the total demand for beans will reach 80,000 tonnes, a 6.66% increase on 2014.

 Khao Shong Coffee, one of Thailand’s domestic brands, is evolving to keep up with coffee drinkers’ needs.

“Khao Shong started almost 60 years ago when my grandfather found some beans scattered in Khao Kra Shong National Park in Trang province,” says Ariya Chiralertpong, deputy managing director of Khao Shong Coffee. “Back then not many people knew that we could grow coffee in Thailand.”

Starting from a small coffee shop in front of the national park, the family established an instant coffee production plant in Bangkok in the late 1970s.

Since Chiralertpong stepped in to manage the business three years ago, she has been working on expanding the brand while looking into new innovations.

“I graduated with a PhD in Food Science so I’m more focused on research and development,” she says. “[One] challenge is how to expand product lines and create new innovations. With R&D, we want Thai people to be able to experience coffee in many forms.”

Chiralertpong believes that Thai people are now more educated about coffee and the coffee-drinking culture, but that the instant coffee market remains huge due to its lower price. She adds that Khao Shong’s main product is the three-in-one instant coffee made using Robusta coffee beans.

“When the Robusta coffee beans are grown in Thailand they have a stronger and unique taste,” she says, adding that although many people prefer Arabica beans for fresh coffee, Robusta beans are better for instant coffee. “Arabica beans cannot undergo the thermal processes involved in instant-coffee making without losing significant amount of natural coffee flavour compounds that are important for the aromatic scent and give the sensory character of real coffee.”

Exporting coffee is very much part of Khao Shong’s business model. “We now export to 15 countries like Myanmar, China, ASEAN and Middle East countries, though we are very much a local brand,” says Chiralertpong. “We’re the only instant coffee brand that’s truly a Thai brand. Many foreigners who visit Thailand would buy our products as souvenirs.”

Learning the choices of different customers is crucial to success. “Each culture has different preferences,” she says. “Now the market is wider, and we have learned that the Far East market, such as the Chinese, doesn’t like coffee that is too strong so we’ve been listening to feedback from our customers.”

The latest product from Khao Shong is canned coffee, which creates new questions to be answered. “The distribution channels [for canned coffee] are very different from the three-in-one so we’re working on that,” she says.

Two years ago the company launched eco-friendly ‘Coffee Tree’ skincare and spa products made from coffee bean by-products. Containing caffeine, Chiralertpong says that these can increase blood circulation and decrease cellulite.

Looking into the future, Chiralertpong thinks the ASEAN Economic Community (AEC) will be great for all industries. “The opening of the AEC will be good for business because the import of raw materials will cost less so production costs will decrease. Overall, it will be easier to expand business into neighbouring countries,” says Chiralertpong, “In the end, I think the people who will benefit the most are consumers.”

For more information, visit www.khaoshong.com.

Words by Sirinuch Borsub