Overview and Prospect of Vietnam’s beverage market in 2022
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The Vietnamese beverage market has grown again after the Covid-19 pandemic. The forecast for beverage sales growth in the period 2022-2024 ranges from 4.3% to 4.8% when the economy returns to normal. The prospect of Vietnam’s beverage market is considered to be rich in potential in many small segments. |
Overview of Vietnam’s beverage market 2022
Supply situation of Vietnam’s beverage industry
+ Average production in 2022 will grow slightly compared to the same period in 2021. Total beverage production in 2022 in Vietnam is about 10 million liters.
Like other beverage products, in 2022, beverage production will face obstacles such as:
- The input costs suddenly increased: gasoline, plastic packaging, paper, aluminum prices, sugar, etc.
- Profit margins of manufacturing enterprises all decreased compared to the same period last year
However, a positive signal boosting beverage production is increased demand as operations begin to reopen. Social activities such as outdoor entertainment, restaurants, tourism, and hotels will reopen at the beginning of 2022. International tourism to Vietnam will be officially resumed on March 15, 2022. In addition, many major cultural and entertainment events took place, including the 31st SEA Games.
+ Importing Vietnamese soft drinks
– Vietnam’s beverage imports in 2022 will decline. Import turnover of carbonated soft drinks in 2022 will reach about 137 thousand USD, down about 14% compared to the same period in 2021. Import turnover of non-carbonated beverages in 2022 will reach about 67 thousand USD, down about 35% compared to the same period in 2021.
However, there are still positive signs promoting the growth of fruit juice imports. The average income of the people increased. According to the General Statistics Office, the per capita income in 2022 is estimated at 4.6 million VND/person/month, up 9.5% compared to 2021. Along with that is the demand for quality products for the consumer’s health increasing. Moreover, the variety of types and beautiful designs of imported products also promote import growth.
Demand situation of Vietnam’s beverage industry:
+ The situation of beverage consumption in Vietnam
- The demand for beverage consumption grew steadily after the Covid-19 pandemic when activities began over. Retail sales of soft drinks in 2022 will reach about 4.5 thousand liters, up about 5% over the same period in 2021.
- Vietnam’s beverage market is focused when the total market share of the 5 largest enterprises in 2022 is only about 57%.
- Pepsico maintains its leadership position in the beverage segment (by value). As for segments, Pepsico also leads in segments namely carbonated drinks, fruit juices, bottled water, and sports drinks.
- 2nd place in 2022 belongs to, Coca-cola Vietnam; which accounted for a large market share in the segments of carbonated drinks, bottled water, and fruit juices.
- Tan Hiep Phat and URC Vietnam lead in the Instant Tea segment while Red Bull ranks first in the energy drink segment.
Energy drinks are the most likely growth segment. The CAGR of energy drinks in the period 2017 – 2022 is estimated at 9.8%, followed by bottled water with a CAGR of 6.9%.
+ Export of Vietnamese beverage
Beverage exports escalated sharply. The export turnover of carbonated soft drinks in 2022 will reach about 44,000 USD, up roughly 42% compared to the same period in 2021. The export turnover of non-carbonated soft drinks will reach about 167 thousand USD, up about 42% over the same period of 2021.
Beverage prospect in 2023
The beverage has great potential in several small segments:
+ Bottled water: From Masan, the bottled water market in Vietnam, with a market size of VND 17.5 trillion in 2021, is forecasted to grow by double digits in the short and medium term. The reason comes from the declining quality of water sources in some regions, leading to a sharp increase in demand for safe and clean drinking water. Additionally, the majority of the population still lacks clean water, due to rapid population growth and urbanization. These are expected signals for the bottled water market to grow.
+ Nutritional product lines: Consumers’ criteria tend to choose products with healthy ingredients: fruit juices, and nutritious drinks (eg: bird’s nest…). With improved consumer income, this product line is expected to grow in the medium and long term.
+ Soft drinks: the product line is associated with the development of fast food chains as well as the development of entertainment – entertainment services (eg: watching movies…). Nestle Vietnam, with its Milo product line, is competing with Pepsi and Coca in the distribution of these channels. That has shown the diversification of the industry.
Forecast of beverage sales in the coming years
The forecast for growth in beverage sales in the period 2022-2024 ranges from 4.3% to 4.8% when the economy returns to normal: Outside dining is open as before the epidemic; boosted e-commerce is also a sales driver.
- Australian market – an opportunity for Vietnamese non-alcoholic beverage businesses
Following the direction of the Ministry of Industry and Trade and the Representative Agency in finding export opportunities, the Trade Office has implemented a program to promote Vietnamese non-alcoholic beverages in Australia. With the determination of Vietnamese businesses and joint efforts, Vietnamese non-alcoholic beverages have grown impressively in the Australian market.
Australia is a powerhouse in agriculture and agro-processing, including beverages. Despite that challenge, with the determination of Vietnamese businesses, and joint promotion efforts; Vietnamese non-alcoholic beverages – according to ITC, have achieved strong growth of up to 59% in turnover compared to the same period last year. It is continuing to exploit its great potential in the future.
- ION Alkaline ionized water, a Fujiwa brand manufactured by Vietnamese enterprises using Japanese technology, is very hot here – 4 containers equivalent to 160,000 bottles of ION water exported to Australia are sold in a short time.
- Betrimex’s Cocoxim coconut water brand is generating strong sales and impressions in the market.
- Diversity of bottled drinks: Mixed fruit and vegetable drinks grew by more than 50%, reaching a turnover of 564,000 USD. In particular, non-fermented fruit juice witnessed a growth of 57% to reach USD 7.9 million. Drinking water from pineapples grew by 203%, reaching 100,000 USD. Bottled drinks such as 0-degree Green Tea, Dr. Bars, and Oolong teas are consumed stably in Australia.
- For canned coffee, two brands, King Coffee and Meet More, are of great interest to consumers.
This is considered a potential market, an opportunity to expand beverage businesses.
Information about the market situation and prospects of Vietnam’s beverage industry is collected from the “Beverage INDUSTRY REPORT Q4/2022“ conducted by VIRAC. The full report will provide customers with in-depth macroeconomic analysis information and the situation of the beer – spirits – wine – beverage markets. In addition, VIRAC also offers some prospects, forecasts, and recommendations for businesses in the process of business and production.
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