Vietnam’s beverage market enters new race
Updated at Tuesday, 15 May 2018, 10:32
The Hanoitimes - Vietnam’s beverage market continues to attract investors as its growth potential is three-fold higher than other Asian countries, industry insiders said.
Kido Group recently announced that it will penetrate into beverage market with herbal tea, heat relieving tea, milk tea, corn milk, and bottled green bean milk. Tran Le Nguyen, CEO of Kido Group, said Kido is completing procedures to cooperate with a Thai partner for the plan.
In the first stage, the Thai partner will produce products in Thailand while Kido distributes it in the Vietnamese market. In the second stage, Kido will build a factory in Vietnam. All products are made from safe and convenient materials for consumers. Products will have competitive prices compared to existing products in the market.
Vietnam’s beverage consumption is expected to grow at 6.66 percent per year
The Kido CEO did not hide the ambition that the group will earn billions of VND with the milk tea and beverage segments.
In March, Coca-Cola also launched to the market the coffee mixed Coca-Cola. Apart from the diversification of tastes, Coca-Cola adjusted and improved formulas in order to bring about healthy drinks to users’ health. Seizing the consumption trend in Vietnam, the giant has diversified its products with bottled fruit and tea drink named Fuzetea + and canned coffee named Georgia since last year.
Pham Nha Uyen Coca-Cola’s Indochina marketing director said with the goal of becoming a beverage brand for everyone, apart from launching a new appetite, Coca-Cola cut down on sugar and calories on many products.
Meanwhile, Suntory PepsiCo has also boosted up investment in Vietnam in the past four years with the investment capital equal to the total value accumulated in a decade ago. Currently, the company has five factories, 3,000 employees, along with 450 wholesale distributors and more than 1.1 million retailers via direct and indirect distribution channels.
Uday Shankar Sinha, CEO of Suntory PepsiCo Vietnam, said that Vietnam’s beverage market has attractiveness with investors from the United States, France and Japan. In some Asian countries, foreign investors expect the growth rate of the beverage market is at about 2 percent, but the Vietnam’s growth in recent years has always maintained at 6-7 percent.
Statistics of the Ministry of Industry and Trade show that Vietnam currently has more than 1,800 businesses operating in the beverage sector.
According to statistics of the Vietnam Association of Liquor, Beer and Beverage, each Vietnamese person consumes an average of more than 23 million liters of beverage each year and the number will continue to increase in the coming years.
Ly Kim Chi, chairwoman of the Food and Foodstuff Association of Ho Chi Minh City, said the country’s food and beverages sector has enjoyed strong growth in recent years, adding that the market is expected to maintain its high growth rate in the coming years and rank third in Asia.
Currently, food processing is one of the priority industries in the nation’s development plan, with initiatives to increase yield and the export value of agricultural and processed food products.
The Vietnamese food processing industry has been growing steadily at about 7 percent in the last five years. Annual food consumption value in the country was estimated to make up 15 percent of the GDP and the quantity also increases by approximately 10 percent per year, while beverage consumption grows at 6.66 percent per annum.
A report of Business Monitor International forecast that the growth speed of the food and beverage industry will maintain an annual dual growth of 10.9 per cent in 2017-2019 and consumption demand will focus on food and necessities, thanks to people’s increasing income and a trend of using high value products.