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The promising market of the non-alcoholic beverage industry in Vietnam 2023

Vietnam's beverage market is becoming a potential and vibrant market. Not only is it a place of competition for "giants'' such as Suntory Pepsi, URC, and Coca-Cola but it also has the participation of large domestic corporations such as Tan Hiep Phat and Masan. This is a fierce race for sales and also sets a strong new trend for healthy beverages.



One of the reasons for the market's potential is that after the COVID-19 pandemic, the need for social connection has increased, especially the attention to choosing healthy drinks. This is clearly reflected in a recent study, sales of non-alcoholic beverages skyrocketed, with a figure of 33.2% in 2022 compared to 2021.


In the third quarter of 2023, most businesses selling alcoholic products such as beer recorded a decrease compared to the same period, while tea businesses such as Interfood (Wonderfarm brand) recorded an increase of 8% compared to the same period in 2022.


Revenue and profits of alcoholic beverages are lower than last year due to fierce competition in the market and lower consumer demand. In addition, the strict implementation of Decree 100 on raising awareness and behavior of traffic participants, creating an important motivation to prevent the harmful effects of alcohol is also the reason why alcohol consumption is lower.


Although Vietnam is not in the top 10 countries with the highest soft drink revenue, with an average consumption of 23 liters of bottled water/per person/year (report dated May 6, 2022, announced by the Vietnam Beer - Alcohol - Beverage Association), soft drinks have become an indispensable part of daily life. With nearly 2,000 production units, the market is witnessing creativity and diversity in products (many new flavors were launched: coffee-flavored Coke, yogurt-flavored water,...).


Products in the industry are also very diverse from carbonated water, tea, and energy drinks to fruit juice and mineral water,... and some more health-oriented products such as canned fermented tea, and zero-calorie soft drinks,... This is making the market more attractive than ever.


Suntory Pepsico

Suntory Pepsico Vietnam Beverage Company (SPVB) was born on December 24, 1991, with the name International Beverage Company (IBC). Pepsico officially entered the Vietnamese market in 1994 through a joint venture with IBC. In April 2013, the strategic alliance Suntory Pepsico Vietnam was born, combining Suntory Holdings Limited and Pepsico Inc. SPVB, a 100% foreign-owned company, that specializes in producing non-alcoholic beverages and mineral water.


Over many years of development, the brand has launched many different product lines from carbonated drinks, energy drinks, tea, coffee, and juice,... corresponding to 10 floating brands such as Pepsi, Sting, Tropicana, 7Up, Lipton,...


Suntory Pepsico's revenue recorded a continuous increasing trend in the period 2020 - 2022. Specifically, in 2020, the brand's revenue reached more than VND 17.2 trillion. This number went up slightly by 1% in 2021 and then climbed by 36.3% in 2022, standing at more than VND 23.7 trillion. Regarding profit after tax, in 2020, profit after tax was nearly VND 2.5 trillion. Its profit decreased by 7.8% in 2021. After that, profits in 2022 recorded an increase of 37.8% compared to 2021, peaking at more than VND 3 trillion.


Coca Cola

Coca-Cola is a famous international brand in Vietnam. Starting a business in Vietnam in 1994, with the goal of becoming a comprehensive beverage company, Coca-Cola constantly improves and provides diverse, quality beverages, including low-sugar and sugar-free products.


Coca-Cola's beverage brands in Vietnam include Coca-Cola, Sprite, Fanta, Minute Maid Nutriboost, Dasani, and many other products. With a focus on sustainable development, Coca-Cola shapes its business model to meet diverse consumer needs.


Coca-Cola has revenue of nearly VND 8 trillion in 2020. This figure climbed by 6% in 2021 and another 30.9% in 2022, peaking at more than VND 11.1 trillion. Regarding profit after tax, in 2020, its profit was recorded at nearly VND 840 billion. Its profit decreased by 100 billion VND in 2021 and then continued by 6.6% in 2022, reaching a profit of more than VND 680 billion.



URC Vietnam

URC, founded by John Gokongwei in 1954, began as a family company and has now grown into a diversified conglomerate. The brand focuses on three main segments: consumer food, the agricultural product processing industry, and general goods.


URC has introduced products to the Vietnamese market since 2003 and currently has 5 manufacturing factories across Binh Duong, Quang Ngai, and Hanoi. Outstanding products such as C2 tea, Red Dragon energy drink, Cream-O cake, Jack & Jill Puff Corn snacks, and many other products of the brand have been launched in the domestic market and exported to many countries.


The brand's revenue recorded continuous growth for three years. In 2020, URC's revenue achieved nearly VND 5.3 trillion. Its revenue went up slightly by 2% in 2021 and continues to increase by 25.8% in 2022, reaching more than VND 6.7 trillion. Contrary to the increasing trend of revenue, the brand's after-tax profit stood at nearly VND 490 billion in 2020. By 2021, brand profit decreased by 50.8%, then continued to fall by 16.8%, reaching more than VND 200 billion in 2022.


Tan Hiep Phat

Tan Hiep Phat "stepped" into the beverage industry in 1994. At first, the business aimed to produce beer under the Laser brand but failed. By 2001, Tan Hiep Phat made a splash in the market and became widely known thanks to its Number 1 energy drink product.


After that, a series of Tan Hiep Phat products became known to consumers such as 0-degree green tea, Dr Thanh herbal tea, Juicie fruit juice, Soya soy milk,...


Tan Hiep Phat's revenue peaked at more than VND 3.8 trillion in 2022. Its revenue went up by 16.6% compared to 2021 but decreased by 22.1% compared to 2020. The brand's profits recorded a fall in the three-year downward trend. Specifically, the company had a profit of nearly VND 980 billion in 2020. This figure increased by 44.4% in 2021, then dropped by 6.3% in 2022, reaching more than VND 500 billion.


InterFood (Kirin Wonderfarm)

Interfood Joint Stock Company (Interfood), formerly known as Trade Ocean Exporters Private Company (Malaysia, 1977), is a brand mainly engaged in export activities. Trade Ocean successfully built its first factory in 1980 and moved to a new factory in 1991 to meet development needs.


After restructuring, Interfood was founded in 1991 and expanded to Vietnam, becoming a leading manufacturer in the bakery and beverage industry. In 2013, KIRIN became a strategic shareholder and focused on producing soft drinks under the WONDERFARM and ICE+ brands.


In 2022, InterFood Group's revenue is recorded at more than VND 1.7 trillion, a rise of 39.3% compared to 2021 but a drop of 12.8% compared to 2020. Brand revenue tends to change continuously. Specifically, in 2020, the brand's profit after tax reached VND 155 billion. This number decreased by nearly VND 30 billion in 2021. Then, it returned to a profit of more than VND 155 billion in 2022.


LAVIE

Nestlé Water is a corporation with 100 factories in 35 countries and 52 brands, meeting diverse customer needs. The company regularly conducts research to increase awareness of the important role drinking water plays in health. Environmental protection is a top priority, with improved packaging and reduced weight of plastic bottles (down 9%/liter since 2010).


The LaVie brand, a member of Nestlé Water since 1992, has continuously strived to develop for 25 years to provide the best products and services. In 2016, La Vie natural mineral water led the bottled water market share in Vietnam.


Lavie's net revenue and profit after tax fluctuate continuously each year in the period from 2020-2022. Specifically, in 2022 the brand's revenue reached more than VND 2.2 trillion, up 20% compared to the previous year but down 15.8% compared to 2020. The brand's after-tax profit from nearly VND 140 billion in 2020, then decreased to VND 75 billion in 2021 and climbed again to nearly VND 170 billion in profit in 2022.


SANEST Khanh Hoa

In 2011, the Bird's Nest Premium Beverage Factory started construction in Cam Ranh City. This is one of the modern, high-class factories in Southeast Asia in the field of bird's nest water production with a capacity of 15,000 products per hour. After many transformations, on November 16, 2017, the Company officially operated in the form of a Joint Stock Company and changed its name to Sanest Khanh Hoa Beverage Joint Stock Company.


SANEST Khanh Hoa's revenue in the period from 2020 to 2022 recorded a slight growth. In 2020, brand revenue reached nearly VND 1.7 trillion. In the next two years, revenue increased slightly by about 6%, fluctuating around VND 1.8 trillion. The brand's profit after tax tends to decrease in 2021 and 2021, from more than VND 80 billion to VND 70 billion. Then, its profits went up again in 2022, standing at nearly VND 95 billion.



Trung Nguyen Legend

Trung Nguyen Coffee is one of the leading famous brands in Vietnam. Born in 1996, Trung Nguyen has brought the best Robusta coffee beans in the world, bringing millions of delicious cups of coffee every day to users.


Currently, Trung Nguyen is presented in more than 60 countries around the world such as the USA, Canada, Russia, UK, Germany, Japan, China, ASEAN,... and is well received by consumers. Coffee products that Trung Nguyen is distributing include instant milk coffee, roasted coffee, creative coffee, weasel coffee,...


In three years, Trung Nguyen Legend's revenue and profit after tax recorded an increasing trend. In 2022, the company's revenue reached nearly VND 6.2 trillion. Its revenue was up 38.5% compared to 2021 and up 46.6% compared to 2020. Regarding profit after tax, in 2020, profit after tax was recorded at nearly VND 130 billion. This figure rose sharply by 336.7% in 2021 then declined by 22.8% in 2022, standing at more than VND 430 billion.


VinaCafé Bien Hoa

Vinacafé Bien Hoa, formerly Coronel Coffee Factory established in 1969, is the leading team producing instant coffee in Vietnam. After converting from a state-owned enterprise to a joint stock company, the brand changed its name to Vinacafé Bien Hoa Joint Stock Company on December 29, 2004.


The company's two famous brands are Vinacafé and Wake-Up, accounting for 41% of the instant coffee market share. Vinacafé BH always leads in quality, enhances production automation, and maintains instant coffee as its main product while expanding its reputation in the international market.


In 2020, Vinacafé Bien Hoa's revenue peaked at nearly VND 3 trillion. The brand’s revenue decreased by about 24% in the next two years, reaching more than VND 2.2 trillion. Vinacafé Bien Hoa's profit after tax also tends to fall. Specifically, the brand's profit in 2020 and 2021 tends to decline to nearly VND 300 billion. Then, in 2022, brand profits continue to go down by more than VND 100 billion, standing at nearly VND 320 billion.


TNI KING Coffee

TNI KING COFFEE (Trung Nguyen International), headquartered in Singapore, was established in 2008 by Ms. Le Hoang Diep Thao - Co-founder of Trung Nguyen Group.


In October 2016, the premium coffee brand King Coffee was introduced for the first time in the United States and quickly dominated the markets of the United States, Korea, China, Singapore, Australia, and India and returned to Vietnam. The products range from instant to roasted, each product is the embodiment of endless diligence and passion.


For three years, TNI KING Coffee's revenue tended to drop sharply. Specifically, in 2022 the brand's revenue only reached more than VND 200 billion, down 82.5% compared to the previous year and down 86.5% compared to 2020. This is also the brand that achieved negative after-tax profit in 2022, negative by more than 100%. billions dong. Meanwhile, two years ago, the brand's profit still achieved a positive level of VND 30-50 billion.


With the emergence of more and more new products and the push for diversity in market segments, the Vietnamese beverage market is expected to experience a period of strong growth in the coming years. Therefore, brands are actively preparing for the "battle" in the future, where quality products combined with communication strategies will be deployed creatively to attract customers to use the products. Therefore, careful research on the market's weaknesses and strengths becomes extremely important to build effective campaigns for businesses.


Source: Vietdata's 2022 Vietnamese Non-Alcoholic Beverage Market Report





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