Jan 6th, 2012
Vietnam has a large and youthful population (84.4 m with 9.8% growth to 2020), of which 52.3% were under 30s. Its economy is forecast to grow fast between 5-6% in 2012. MNCs in food and beverage (F&B) like Nestle, Unilever, Kraft, DANONE, Heinz, San Miguel Corp, SabMiller, Scottish & Newcastle etc all are now paying much greater attention to Vietnam. A number of foreign players have invested in the Vietnamese market through equities acquisition (indirect investment) or manufacturing (direct investment). The below gives some indicative information about the trend and potential of F&B sector with forecast to 2015 according to Business Monitoring International, Trade Press and Company reports.
Food consumption in Vietnam is forecast to experience strong growth of 72.3%, equivalent to USD 23.5m in 2015. The rising affluence among Vietnamese consumers and an ongoing expansion of the country’s modern grocery retail are some key factors contributing to the impressive growth of F&B sector. Canned food sales are expected to increase by 29.4% in volume and 51.4% in value when people seek for cheaper option over restaurants and pay more attention to food origin and hygiene concerns. Confectionery sales will increase by 50.8%, and chocolate especially will be the highest growth sub-sector which sales are forecast to increase by 65.4%. The confectionery sector continues to be one of the most dynamic in Vietnam’s F&B industry, demonstrating enormous growth potential.
Alcoholic drinks are forecast to increase by 70.9% to 2015. Beer will be the main driver of sector growth and continue to dominate the alcoholic drinks sector, accouting for the vast majority of volume sales. The outlook for Vietnam’s alcoholic drinks industry remains very strong, as it continues to attract considerable interest from foreign investors. A number of industry majors such as Diageo, Asia Pacific Breweries, Carlsberg, Habeco and Sabeco. Sabeco led the market with 35%, followed by Habeco of 20% market share. APB (which owns Heineken, Fosters, Tiger brands) accounted for 18% and Carlsberg for 10% (figures of 2010). Hot drinks sales in Vietnam in value terms will increase by 79.2%. Vietnam’s sturdy economic growth over the next few years will continue to fuel demand for aspirational F&B such as coffee and tea. Soft drinks are forecast to increase by 33.3%. Although soft drinks’ growth rate is lower, value sales growth will be stronger at 53.6% in line with the emerging premiumisation trend. Intensified rivalry between the country’s major soft drinks players PepsiCo and The Coca-Cala Company which combined market share in soft drinks account for 88% is another key driver behind our bullish growth forecast for the sector.