Vietnam Food and Drink Report Q1 2013

Despite the expected stuttering of the near-term consumer story in Vietnam, we remain optimistic about the country’s longer-term commercial potential. Our view is based on factors such as the country’s favourable demographic profile, with under-30s accounting for half of total population, and the immaturity of food, drink and mass grocery retail sectors. Added to that, urban consumers in particular are increasingly receptive to marketing and promotional initiatives, with premiumisation thus expected to remain one of the key drivers of consumer spending.

Headline Industry Data (local currency) ?? 2013 per capita food consumption growth = +6.4%; forecast compound annual growth rate (CAGR) to 2017 = +8.4% ?? 2013 alcoholic drink value sales = +12.5%; forecast CAGR to 2017 = +13.5% ?? 2013 soft drink value sales = +13.4%; forecast CAGR to 2017 = +13.7% ?? 2013 mass grocery retail sales = +11.1%; forecast CAGR to 2017 = +12.3%

Key Industry Trends Vietnamese Supermarkets Facing Strong Foreign Competition: According to Vu Vinh Pu, chairman of the Ha Noi Supermarkets Association, the increasing number of foreign retail outlets is compounding the economic hardships faced by domestic retailers. Domestic retailers FiviMart and Intimex have reduced their number of outlets and saw profits fall 5-10% in H211 compared with H111, which have partly been attributed to declining consumer purchasing power and partly to the presence of international wholesaler Metro Cash & Carry, French-owned Big C and Malaysian department store Parkson. Spirits Major Diageo Acquires Additional Stake in Vietnamese Halico: In June 2012, UK drinks group Diageo acquired an additional 10.6% stake in Vietnamese spirits firm Hanoi Liquor Joint Stock Company (Halico), raising its total equity to 45.5%. The move is in line with the firm’s strategy to increase its sales in emerging markets. Diageo is seeking to capitalise on the robust growth of the branded spirits sector in Vietnam. Diageo has earmarked Vietnam due to its rising population, rapidly growing middle class and Halico’s strong market standing in local premium spirits.

Key Risks To Outlook Downside Risks Prominent: Despite the country’s significant long-term potential as a consumer market, Vietnam’s near-term consumer outlook could be negatively impacted by growing uncertainties over unemployment in the manufacturing sector. Weaker-than-expected export growth can further compound this situation, especially as Vietnam’s consumer confidence levels are already severely dented.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Vietnam Food Industry SWOT

Vietnam Drink Industry SWOT

Vietnam Mass Grocery Retail Industry SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Asia Pacific Food & Drink Risk/Reward Ratings

Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q (score out of )

Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q

Vietnam Food & Drink Risk/Reward Ratings

Macroeconomic Outlook

Table: Economic Activity

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts, -

Canned Food

Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, -

Confectionery

Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, -

Pasta

Table: Pasta Volume Sales, Production & Trade – Historical Data & Forecasts, -

Dairy

Table: Dairy Volume Sales, Production & Trade – Historical Data & Forecasts, -

Drink

Alcoholic Drinks

Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, -

Hot Drinks

Table: Hot Drinks Volume Sales – Historical Data & Forecasts, -

Soft Drinks

Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, -

Table: Carbonates Volume Sales, Production & Trade – Historical Data & Forecasts, -

Mass Grocery Retail

Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts, -

Table: Grocery Retail Sales By Format (%)

Trade

Table: Trade Indicators – Historical Data & Forecasts, -

Chapter 5 - Food

Key Industry Trends And Developments

Regional Players Expanding Footprint

Foreign Brands Dominating Consumer Goods Industry

Rural Market Potential Attracting Manufacturers

Market Overview

Agriculture

Food Processing

Food Consumption

Chapter 6 - Drink

Key Industry Trends And Developments

Spirits Major Diageo Acquires Additional Stake In Halico

SMB Eyeing Regional Growth

Regional Brewers Spreading Their Wings Across Vietnam

Spirits And Soft Drinks Potential Attracting Investors

Coffee Potential Perking Up Sector Investments

Ready-To-Drink Tea Attracts Investment

Market Overview

Hot Drinks

Soft Drinks

Alcoholic Drinks

Beer

Chapter 7 - Mass Grocery Retail

Key Industry Trends And Developments

Metro Moving Forward In Vietnam

Vietnam A Stepping Stone To Achieve Regional Ambitions

Retailers Scouting For New Retail Locations

Market Overview

Table: Structure Of Vietnam’s Mass Grocery Retail Market By Estimated Number Of Outlets

Table: Structure Of Vietnam’s Mass Grocery Retail Market – Sales Value By Format (US$bn)

Table: Structure of Vietnam’s Mass Grocery Retail Market – Sales Value by Format (VNDbn)

Table: Average Sales Per Outlet By Format –

Chapter 8 - Competitive Landscape

Table: Key Players In Vietnam’s Food Sector

Table: Key Players In Vietnam’s Drink Sector

Table: Key Players In Vietnam’s Mass Grocery Retail Sector

Chapter 9 - Company Monitor

Food

Kinh Do

Unilever Vietnam

Nestlé Vietnam

Masan Consumer

Vietnam Dairy Products Joint Stock Company (Vinamilk)

San Miguel Pure Foods Vietnam Co Ltd

Drink

Hanoi Beer Alcohol Beverage Corp (Habeco)

Saigon Beer Alcohol And Beverage Corporation (Sabeco)

Carlsberg

Mass Grocery Retail

Metro Cash & Carry

Saigon Co-op

Chapter 10 - Demographic Outlook

Table: Vietnam’s Population By Age Group, - (‘)

Table: Vietnam’s Population By Age Group, - (% of total)

Table: Vietnam’s Key Population Ratios, -

Table: Vietnam’s Rural And Urban Population, -

Chapter 11 - Risk/Reward Ratings Methodology

Table: Rewards

Table: Risks

Weighting

Table: Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food & Drink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Vietnam (in Asia)