Heatwave boon for beverage makers

Consumption trends buoyed by weather patterns

Despite cost pressures from rising raw material prices, beverage companies are set to benefit from extremely hot weather as the global climate transitions towards El Niño, according to analysts.

Hotter and drier weather than usual, as the global climate shifts towards El Niño, is benefiting Thai beverage makers, even as they face cost pressures from prolonged geopolitical conflicts in the Middle East, analysts say.

Wetid Tangjindakun, an analyst at KGI Securities (Thailand), said the global climate is shifting from La Niña to neutral conditions in early 2026, with rising El Niño risks in the second half. This implies hotter and drier weather compared with the unusually wet and cool conditions in 2025 that weighed on consumption.

"We expect this transition to support demand recovery, benefiting Thai drink makers with stronger volume growth, as evidenced during the 2023 El Niño period," he pointed out.

Meanwhile, rising aluminium and polyethylene terephthalate (PET) resin costs pose downside risks to the industry.

Sugar costs are not a concern given a 14% year-on-year decline year to date, whereas aluminium prices, which have risen 22% year-on-year, as well as a spike in PET resins, pose a greater risk, noted Mr Wetid.

"While gas costs, which represent around 5% of direct costs, rose in the first quarter in line with higher pool gas prices, this should be offset by strong seasonal demand during a hotter than usual summer, spurring solid operating profit in the first six months of the year," he added.

According to KGI, the beverage industry is also feeling pressure from price competition, especially as the market remains highly price-sensitive amid weak domestic consumption.

Competition in Thailand's energy drink market has intensified since early 2026 after TCP Group reduced the price of Krating Daeng -- its flagship energy drink -- to 10 baht from 12 baht, putting downward pressure on the industry's average selling price and risking a contraction in market value this year, despite earlier expectations of a year-on-year recovery, Mr Wetid noted.

Nathakorn Sripufai, an analyst with LH Securities, shared a similar view, pointing out that extremely hot weather resulting from the full onset of the El Niño phenomenon, which may last until mid-2027, will be a major catalyst for a significant increase in sales of refreshing drinks, combined with the rising number of tourists and the Songkran festival.

The industry is weathering weak domestic purchasing power, due to high household debt and the cost of living, as well as potential disruptions in logistics and international trade.

"However, hot weather and strong tourism during the summer have led to increased sales, particularly in the alcohol-free and non-alcoholic beverage categories," Mr Nathakorn said.