is part of the Informa Markets Division of Informa PLC
This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Vietnam’s shifting and dynamic environment is reflected in a young population, changing consumer attitudes, greater mobility, growing wealth, and urbanisation. All of the factors contribute to changes in consumer wants and needs, with health considerations topping the list.
It is well known that Vietnam is a lucrative market for alcoholic beverages, beer in particular, however, a noticeable shift has occurred showing that there is a growing market for healthy soft drinks.
Value sales of naturally healthy beverages rose by 12% to reach US $4.9 billion in 2019. Projected to continue to rise, health consciousness among Vietnamese consumers is a key driver of naturally healthy beverages, with tea and fruit/ vegetable juices leading the way.
Although there is a growing demand for these products, there are some considerable inhibiting factors. Affordable, fresh fruit juice and fresh green tea are common in Vietnam, particularly in marketplaces in rural areas. This reduces demand for packaged beverages in these areas, meaning attention is better directed to urban areas.
Growing consumer demands for convenience in urban areas is a big driver for packaged naturally healthy beverages. Buying ready-to-consume juice is much easier and less time consuming than making freshly squeezed or brewed beverages at home. It is also important to consider who the demographic targets are in urban areas. Men are responsible for the highest out-of-home beer consumption, whereas women are more drawn to healthy drinks such as juice, smoothies, and milk. As out-of-home consumption continues to grow, there is an opportunity to appeal to the sensibilities of both groups, perhaps by providing lower-calorie and lower-alcohol beer, and by promoting the health benefits of juice and milk beverages
Vietnamese consumers are increasingly more concerned about health, hygiene, and food safety. 76% of Vietnamese consumers want to know everything that goes into their food, while 89% are willing to pay more for foods that claim health benefits. All of these are key factors in shaping the growing packaged food and snacking segments.
In 2019 the snack foods segment grew by 21% in Vietnam, which is three times the industry average. There are no signs of slowing down, with value sales set to rise at a current value CAGR of 12% to reach US $1.3 billion in 2024. The Vietnamese government is active in promoting locally grown food, which led domestic companies to dominate naturally healthy packaged food in Vietnam in 2019.
With continued education and consciousness among the Vietnamese population, packaging is key. Research has shown that Vietnamese consumers connect white or transparent packaging with fresh and natural products. Clean labels are also important to promote transparency in ingredients and the processing chain.
While domestic industries are currently favoured in this segment, rising disposable incomes will encourage some consumers to trade up to international brands that are perceived to be higher quality. Appealing to this sense of value, quality and in some cases luxury, is important, but above all establishing trust and promoting food safety is key in the Vietnamese market.
Although dairy products are not historically common in the Vietnamese diet, milk has become hugely popular. This is connected to the health conscious attitude of Vietnamese consumers, as illustrated by a report in 2015 where Vietnamese consumers ranked health as their most important concern behind only their job and the economy.
Beyond milk, other dairy products have been gathering momentum in Vietnam including yoghurt. In Vietnam, yogurt has long been considered a wholesome choice, and there are many angles to explore in this segment. Given many Asian consumers find it difficult to digest lactose, the market for lactose-free milk has a lot of potential. The promotion of probiotic yoghurts and dairy products is also significant. In 2018, 36% of all yoghurt drinks launched globally had probiotic claims, with a growing interest among Asian consumers in dairy products, this is a key time to explore and promote probiotic claims.
Dairy and yoghurt products are best aimed at the younger, urban population. By leveraging the natural benefits of yoghurt products and presenting them in smaller packaged portions, companies can appeal to increasingly health-conscious Vietnamese consumers and allow them to indulge in guilt-free snacking.
There is also the opportunity to connect to online opportunities. For example, as the Vietnamese avocado smoothie starts to gain recognition internationally thanks to viral videos on social media platform Tik Tok, there is an opportunity to replace the traditional condensed milk with other healthier milk products to offer up a twist on a local favourite. By harnessing the power of digital media and pivoting to healthier options, the dairy market in Vietnam is definitely fresh with opportunity.