VIETNAM BEVERAGE INDUSTRY IN THE FIRST MONTHS OF 2022

Beverage industry – Positive and negative signals in recent years

 

Before the COVID-19 pandemic, Vietnam’s beer – wine – beverage market was a market with great potential, making a positive contribution to socio-economic development. However, according to VIRAC‘s report, Vietnam’s beverage industry has suffered a loss in revenue since 2020, especially the beer industry that has been hardest hit after Decree 100 on prevention of harmful effects of alcohol on traffic. as the impact of the Covid-19 pandemic.

 

In the period of 2020 – 2021, the production – consumption indexes and beer consumption value both decrease. The time of Q2/2020 and the end of Q2 – Q3/2021 is considered the worst due to the social distancing policy, food service businesses have to close for a longer time than other businesses.

Beverage-industry-report

 

Clear signs of recovery

 

Total retail sales of consumer goods and services will always grow steadily until 2019. The growth rate in 2020 and 2021 will be slowed down due to the complicated situation of the COVID-19 epidemic. However, with the reopening of the economy, the total retail sales of consumer goods and services will grow again in 2022. This is the basis for the recovery of the beverage industry.

 

According to the World Bank, people’s income is improving with a forecast that Vietnam’s GDP in 2022 will increase by 5.5% compared to 2.58% in 2021, which is a favorable condition to help boost consumer demand. According to F&B industry statistics via Payoo payment platform, by the end of Q1/2022, this industry’s revenue has increased by one and a half times, the total number of transactions increased by 24% compared to Q4/2021. Ordering application GoFood said that in the first quarter of 2022, the number of F&B orders doubled compared to the same period in 2021.

 

Demand for beverages increases when tourism is completely reopened

 

The revival of the tourism industry after international flights were licensed for commercial purposes since Q1/2022, along with the series of 31 SEA Games events held in Hanoi, has led to a strong recovery of tourism activities. entertainment, accommodation and catering, in which the food and beverage industries such as beer and beverage have shown signs of growth again.

 

Regarding the beer market, in the first 3 months of the year, consumption reached about 1 billion liters with canned beer accounting for 65%.

 

Regarding the wine market, wine production in Q1/2022 increased by 2.3% compared to the same period in 2021. In terms of products, Wine from fresh fruit (especially from grapes) is still the domestic product line that is still the domestic product line. focus on production.

 

Regarding the beverage market, in Q1/2022 beverage output increased by 11.6% over the same period last year. Vietnamese people tend to consume imported fruit juices. Because: Firstly, the average income of people increases, the demand for better quality and healthy products increases; Secondly, imported products are diverse in types and beautiful designs.

 

Vietnam’s beverage industry has the opportunity to export to international markets

 

With 15 Free Trade Agreements signed, the latest is the Regional Comprehensive Economic Partnership (RCEP) which took effect from January 1, 2022, has been providing effective support to trade activities. Vietnam’s trade with many large markets.

 

Regarding the export and import markets of goods in the first 5 months of 2022, the United States is the largest export market of Vietnam with an estimated turnover of 46.7 billion USD. China is Vietnam’s largest import market with an estimated turnover of 49.6 billion USD.

 

Over the years, Vietnam’s beverage export has made many new strides and built a reputation in the international market. China is considered a very potential market for many Vietnamese products, including beverages. Vietnamese tea and coffee hold an important position in this market.

 

Negative signals

 

Beer prices up 30%

 

Due to the energy crisis in Europe and the conflict between Russia and Ukraine causing the price of input materials to skyrocket, for example, the main raw material for beer production, barley, has increased by 40-50%. other raw materials such as: cans, cans, accessories, chemicals… increased by 15% – 35% on average without any sign of cooling down and is expected to continue to increase in the near future. Moreover, gasoline prices are constantly increasing “hot”, transportation costs also increase, etc. In addition, competition is fierce between beer companies to gain market share. All of this leads to a lack of input supply and supply chain disruptions that drive up beer prices.

 

Alcohol of unknown origin affects consumers’ health

 

According to VIRAC’s report, currently, on the market, more than 70% of alcohol is cooked by a single individual. Alcohol of unknown origin, beyond the control of State management agencies, affects the health of consumers, the business environment, and especially causes loss of State budget revenue.

 

Some statistics show that the cause of poisoning cases leading to death or affecting the ability to work is due to the use of alcohol products of unknown origin, alcohol containing industrial alcohol methanol…

 

Vietnam’s beverage industry in the near future

 

Beverage industry – positive trend

 

Firstly, on Decree 100 (regulations on penalties for motorcyclists with alcohol content in their blood or breath), its influence and impact will gradually decrease when consumers voluntarily comply. for their own safety. Therefore, in the coming time, this decree will not be a core factor affecting developments in the beer market in Vietnam.

 

Secondly, thanks to the rapid expansion and implementation of the Covid-19 vaccination campaign, social activities such as outdoor entertainment, restaurants, tourism and hotels have reopened since the beginning. In 2022, it is expected that total revenue of the beverage industry will reach the highest growth rate of the year in the third quarter of 2022.

 

Beverage industry – negative trend

 

High inflation, input material prices are difficult to cool down in a short time, causing beer prices to continue to increase further in the future.

 

People tend to tighten their spending, especially on non-essential items such as beer and wine.

 

The tastes and requirements of consumers for food products in general and beverages in particular are increasingly demanding in terms of product quality, images and designs, packaging, etc.

 

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