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FOCUS: THE BEVERAGE SECTOR IN VIETNAM

In a recent article for the Hanoi Times, Linh Pham analyzed a study produced by the EU-Vietnam Business Network (EVBN) on the beverage industry in Vietnam. In this article, the journalist points out that beverage consumption in Vietnam is on the rise with an annual increase of 6%-8%, reaching 81.6 billion liters in 2016, and is projected to hit roughly 109 billion liters by 2020”.

Linh Pham highlights for example that Vietnam is the biggest beer market in Southeast Asia. The journalist explains: “by 2020, it is estimated that each Vietnamese will consume over 42 liters of beer per year”. The beer market is also supposed to be opened for any new player that is seeking of coming in, “as the Vietnamese government is seeking to reduce its participation in Sabeco and Habeco, two major breweries in Vietnam, which respectively hold 46% and 14.8% of the total beer market share.”

Sabeco is Vietnam’s leading beer producer. Its main brands are Saigon Beer – the leading brand name in Vietnam beer industry and 333 Beer. Saigon Beer has over than 140 years and has been exported to 38 around the world, according to the website of the company. Habeco is the third-largest beer company in Vietnam and is especially known for its brand Hanoi Beer.

Other categories are also gaining weight on the market. Soft drinks (juice, bottled water, ready-to-drink tea/coffee) and fizzy soft drinks are also on the rise for example. The journalist wrote: In 2015, volume sales of soft drinks (juices, bottled water, ready-to-drink tea/coffee) and fizzy soft drinks in Vietnam reached 2.4 billion liters and 1.1 billion liters, respectively. By 2020, the sales of each sector are estimated to be 3.3 billion liters and 1.5 billion liters, respectively”.

Other categories are also gaining weight on the market. Soft drinks (juice, bottled water, ready-to-drink tea/coffee) and fizzy soft drinks are also on the rise for example. The journalist wrote: In 2015, volume sales of soft drinks (juices, bottled water, ready-to-drink tea/coffee) and fizzy soft drinks in Vietnam reached 2.4 billion liters and 1.1 billion liters, respectively. By 2020, the sales of each sector are estimated to be 3.3 billion liters and 1.5 billion liters, respectively”.

Coffee remains the one that Vietnamese drink the most. As a reminder, Vietnam is the second world’s exporter of coffee, mostly Robusta. But fizzy drinks like cola or energy drink are also widespread, as a big part of the population is young. According to Vietnam Report’s consumer survey, Pepsi (Fizzy soft drink), Trung Nguyen (Coffee) and Vinamilk (Milk) were among the top 10 most popular brands in Vietnam in 2019 in the food and beverage sector.

Finally, wine and spirits. Linh Pham points out that consumption is concentrated in urban centers. Most of the distilled beverages consumed in the country are vodka and Red wine is the most common wine. A report published in 2017 by the British Business Group Vietnam explained, “Western expatriates and tourists remain the biggest consumers of wines and spirits in Vietnam, although domestic drinking habits have also been changing in line with higher consumer incomes and greater exposure to Western cultures. There is a shift of consumption habits from cheap beer and whiskies to quality wines at reasonable prices. Starting from a very low level, the Vietnamese wine market has exploded, with hotels, restaurants, and retailers now offering a wide variety of wines from around the world.” Red wine accounts for around 60% of the wine sold in the country and comes most of the time from France or Italy.

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