Food & Hotel Vietnam is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726

Vietnamese beverage enterprises consider exploiting the niche market

25/10/2022

The beverage industry is a lucrative niche that international companies exploit, with a scope of approximately to USD 6 billion. Vietnamese companies still have an opportunity to expand nevertheless, if they take advantage of specialized markets and offer unique products that meet consumers’ needs.

The attraction of the beverage market

The report of the Ministry of Industry and Trade shows that the average Vietnamese consumes only 23 liters of soft drinks per year, much lower than the world’s 40 liters per year.

A representative of  market research group Euromonitor International (UK) informed that Vietnam is a country with a young population, with the age group of 15 – 54 accounting for nearly 62.2%, so there is a high demand for different types of water. Beverages. In the period 2017 – 2019 before the outbreak of the Covid-19 epidemic, the annual growth rate of Vietnam’s beverage industry was up to 6-7%/year, while countries such as France, and Japan… were only about 2 years.

It is forecasted that by 2025, the revenue of Vietnam’s beverage industry will reach nearly 6 billion USD, with an average growth of 6.3% per year, so it is very attractive to foreign investors.

Consumers buy Oh Fresh freshwater products at supermarkets

Realizing the strong growth potential of the beverage market, with the ambition to dominate the market, many foreign enterprises are pouring money into direct production investment, or buying shares of Vietnamese enterprises.

At the end of 2017, ThaiBev (Thailand’s largest beverage company) spent 5 billion USD to acquire a 53.59% stake in Saigon Beer – Alcohol – Beverage Corporation (Sabeco). Through the purchase of shares in Sabeco, the Thai people indirectly dominate more than one-third of Vietnam’s beer market.

Similar to Saigon Beverage Joint Stock Company – Tribeca with soy milk products, after a period of the joint venture with Uni-President (Taiwan), has continuously suffered losses, so it had to sell 43.6% shares to partners. joint venture.

Before that in 2001, through the acquisition of Vietnamese enterprises, Coca-Cola became a 100% foreign-owned enterprise. Similarly, in 2002, Pepsi Vietnam also acquired all shares of the International Beverage Joint Venture (IBC). Through the acquisition of Vietnamese enterprises to join the joint venture, Coca-Cola’s products now occupy over 41% of the market share, while PepsiCo accounts for 22.7%.

Talking about the reason why the beverage market share falls into the hands of foreign enterprises, Chairman of the Vietnam Beer – Alcohol – Beverage Association (VBA) Nguyen Van Viet stated that most of them are small-scale Vietnamese enterprises, not With enough financial capacity, 52% use outdated technology, equipment, and machinery, 38% on average, 10% are modern, only 2% use high technology in the beverage production process.

“Not only that, Vietnamese enterprises lack links, are relationship-heavy, rely heavily on, slow to adapt to international business practices and FTAs… This is an opportunity for foreign businesses to encroach Vietnam market” – Mr. Nguyen Van Viet analysis.

Focus on exploiting the niche market

Although the beverage market is being dominated by foreign enterprises, however, President of the Vietnam Marketing Association Tran Hoang said that currently, Vietnamese consumers are reducing the use of carbonated drinks, gradually switching to soft drinks. thirst for organic origin is beneficial for health. Therefore, Vietnamese enterprises should produce Vietnamese-specific fruit juices such as herbal tea without gas. “This is a niche market for Vietnamese businesses to develop if they know how to exploit this market,” said Mr. Tran Hoang.

Consumers buy Vinamilk’s apple juice products at supermarkets

To exploit the niche market, some Vietnamese businesses have launched natural products to the market. Recently, Traphaco Joint Stock Company launched Traphaco Boganic herbal tea. Traphaco’s representative said that this beverage is not only sold at 20,000 retail pharmacies nationwide but also at grocery stores, supermarkets, and convenience stores.

“Vietnam is a country with a tradition of agriculture, qualified to supply raw materials for the production and processing of non-carbonated beverages such as fruit juices, fruit milk, herbal teas, etc. opportunities for Vietnamese enterprises to exploit and produce beverage products capable of competing with foreign goods.” – VAB Vice President Chu Thi Van Anh

Similarly, at the end of 2021, Vibev Company (a joint venture between Vinamilk and Kinh Do Group Joint Stock Company) officially launched two Oh Fresh branded beverage products on the Vietnamese market. General Director of Vibev Food & Beverage Joint Venture Co., Ltd. Mai Xuan Tram shared that the company aims to hold the number one position after 5 years of operation in terms of market share in the fresh beverage industry with an output of 150 million VND. bottles/year (equivalent to more than 2,000 billion VND).

In fact, over the past time, Vietnamese businesses have launched many natural products, of tea alone, there are dozens of types, from green tea to milk tea, chrysanthemum tea, peach tea, corn silk tea, and tea. Passion fruit, strawberry tea, squash tea, red ginseng tea, apple-flavored red tea… Even some foods that used to be processed by hand and sold at sidewalk stalls are now upgraded to become bottled water, such as jelly water, fresh coconut water, and orange juice…

Talking about the way to develop Vietnamese beverage products that can compete with foreign goods, VAB Vice President Chu Thi Van Anh stated that Vietnamese businesses must be quick to grasp new consumer trends, building flexible production and business strategy with fluctuations in the market, thereby improving competitiveness in the beverage industry.

“Currently, the income level of consumers is increasing, beverage businesses need to focus on investing in research and development of high-end healthy product lines to catch up with the consumption market in this segment” – Ms. Chu Thi Van Anh suggested.

The opinion of experts and management agencies shows that to maintain the beverage market share, Vietnamese businesses need to step up to understand the needs of consumers, thereby offering suitable products. Promote connection of production and distribution systems, and reduce intermediaries, thereby reducing production costs.

Source: Kinh te Do thi

Food & Hotel Vietnam 2022 promises to bring diverse experiences regarding the ecosystem of reputable suppliers and potential buyers in the Food & Beverage, Hotel & Resort, Restaurant, Bakery and Food Service industries. The exhibition is a platform to meet and connect, thereby extending endless business opportunities. Additionally, Food & Hotel Vietnam 2022 is also a fascinating playground for the chef and barista community with a series of programs and competitions such as Vietnam Culinary Challenge and Vietnam Barista Competition.

Food & Hotel Vietnam 2022
Exhibition date: 07 – 09 December 2022
Opening hours: 9:00 – 17:00 daily
Venue: Saigon Exhibition & Convention Center (SECC), District 7, Ho Chi Minh City, Vietnam
Contact information:
Tel: +84 28 3622 2588
Email: [email protected]
Website: www.foodnhotelvietnam.com
Facebook: www.facebook.com/FoodnHotelVietnam 
Share this post

Must Read

PRODUCTS EXHIBITION
05/04/2022

You may be interested in

31/08/2023
Sustaining its leading position in the Vietnamese tourism industry, Ho Chi Minh City remains a top travel destination
The Ho Chi Minh City Tourism Department is the main organization driving the tourism industry,...
17/08/2023
Advancing connectivity to elevate Phu Quoc into an exceptional international destination. 
The comprehensive master plan for Phu Quoc city, Kien Giang province, until 2040 defines the...
17/08/2023
Vietnam and South Korea actively stimulate and exchange tourists
In 2023, during the Year of Korean Tourism, efforts will be made to enhance connections between...
17/08/2023
Vietnam’s tourism industry demonstrates significant potential for expansion and advancement.
The Deputy Minister of Culture, Sports, and Tourism in Vietnam, Doan Van Viet, has acknowledged...
17/08/2023
Visa advantage is “great news” for Vietnam tourism 
The Asia-Pacific Tourism Association (PATA) welcomes visa facilitation policies for international...
08/08/2023
The hotel market in Ho Chi Minh City has recovered by more than 92%
According to Savills’ report, in the first half of 2023, Ho Chi Minh City welcomed the...
08/08/2023
Vietnam welcomed over 1 million international visitors in July 2023.
July is the first month that the tourism industry welcomed over one million international visitors...
08/08/2023
Vietnam businesses benefit from tourism recovery
HANOI: The strong recovery of tourism has helped businesses in the industry prosper. However,...
20/07/2023
Nearly 5.6 million international visitors come to Vietnam in first half
Vietnam welcomed nearly 5.6 million international visitors in the first half of this year,...
08/06/2023
Vietnam has 103 restaurants honored by the Michelin Guide.
Michelin Guide has honored 103 restaurants/food stalls, including 4 prestigious Michelin-starred...

Subscribe to Our eNewsletters

    captcha
    BOOK A STAND