US food and drinks giant PepsiCo this week announced plans to invest US$250m in Vietnam over the next three years. Here, with the help of Euromonitor’s Sweet and Savoury Snacks in Vietnam report, we take a look at the snacks market in Vietnam.
- Of all products within the sweet and savoury snacks category in Vietnam, chips/crisps registered the fastest volume growth rate in 2009, at 12%. This remains a relatively niche category which particularly targets teenagers and young people. These consumer groups are becoming more influential, increasing in number and developing more sophisticated demands. In addition, they are the groups which are most affected by advertising, with high exposure to media through various channels.
- Sales revenue in the chips/crisps category is also boosted by the level of activity of the two leaders – An Lac Co Ltd and PepsiCo Inc. An Lac has always been the leader in this category with two key brands, Zon Zon and Zich Zich, while PepsiCo has gained a stable position after just three years in the category with its Poca brand.
- The sweet and savoury snacks category in Vietnam has continued to develop, with an increasingly diverse range of products as well as increased competition. Local companies such as Tan Tan Food & Foodstuff Co (9.7% share), Tuyen Ky Co Ltd (7.6%), Kinh Do Corp (4.3%) and Bien Hoa Confectionery Corp (Bibica) (4.4%) still hold leading positions (7.3%). That said, some leading international companies are present, including Philippines-based Liwayway Food Industry Co Ltd with its Oishi brand.
- The global health and wellness trend is having a growing impact across all packaged food categories in Vietnam, and companies operating in sweet and savoury snacks are also paying more attention to this issue. Most of the big companies, including Tan Tan Food & Foodstuff Co, PepsiCo Inc and TM Vina Mit Ltd Co (Vinamit) are seeking to present their products as ‘fresh’, ‘natural’, ‘original’ or ‘healthy’. Another strategy that companies are increasingly following is to expand the product range, moving to a more upmarket position. The development of more premium products targeting higher income groups is expected to result in increased profitability and a better brand image.
- In general, sweet and savoury snacks in Vietnam are predicted to continue to perform well over the forecast period. The average per capita consumption of snacks is still lower than in neighbouring countries such as Thailand, Singapore or Taiwan. Improvements in disposable income and living standards will be the key driving force behind the growth in demand for snacks, along with evolving consumer lifestyles. The current recession will have a slight impact in that value growth will be slower at the start of the forecast period, before accelerating moderately. Constant value growth, however, will be substantially faster than the rate seen over the review period.
- Sales in sweet and savoury snacks are predicted to reach VND6.08bn by 2014 from VND3.90bn in 2009. Volume is expected to increase 46.4% over the same period.