Promising prospect of beverage market

Both domestic and foreign investors are striving to gain a leg up on competition for a greater market share.  

In their eyes, Vietnam has huge potential for beverage industry to develop in the long run. Since September, Taiwan’s Uni-President Group—the largest shareholder of Tribeco Saigon—has assumed responsibility for Tribeco’s trademark, always considering it worthwhile to expand business operations with a focus on five key commodities such as instant noodles, snacks, flavouring powder, seafood, and now beverages. Similarly, Vedan has recently launched Thien Tra product line on the market.

Coca Cola has decided to invest US$300 million in developing new brands.  PepsiCo Vietnam and Suntory (Japan) have agreed to set up a joint venture in the beverage sector. Suntory will buy 51 percent of PepsiCo Vietnam’s shares. PepsiCo’s popular brands include Pepsi Cola, 7-UP, Sting, Mirinda, Tropicana, Twister, Lipton, and Aquafina.

With the new joint venture taking shape, PepsiCo will be responsible for marketing those brands. Since entering Vietnam in 1994, PepsiCo has invested US$500 million in the beverage sector. One of its five factories, located in Bac Ninh province’s VSIP industrial park is considered the PepsiCo system chain’s largest project in Asia with a total investment capital of US$73 million. The new joint venture with Pepsi-Co Vietnam marks Japanese brand Suntory’s official entrance into the Vietnamese market.

According to statistics from the Vietnam Alcohol, Beer, and Beverage Association Vietnamese people annually consume dramatically less bottled water and non-alcoholic beverages than their Philippine neighbours. As per capita income continues to rise and living standards improve, the beverage sector is expected to see its revenue growing by 20 percent per year.

Tan Hiep Phat Company has a design capacity of 1 billion litres per year across a wide range of products. Recently, Tan Hiep Phat began construction on two beverage factories with a total capacity of 1.550 million litres per year in Quang Nam and Ha Nam provinces.

In mid August this year, Quang Ngai Joint Stock Company inaugurated a Vinasoy soya factory in Bac Ninh province’s Tien Son industrial park. The first phase of the factory will enter operation in May 2013 with a design capacity of 1 billion canned products per year.

The project is one of the five largest soya factories in the world. Quang Ngai Sugar Joint Stock Company has launched two beverage trademarks—Fami and Vinasoy. Vinasoy already claims 80 percent of soya milk market shares and ranks fourth in the globe in terms of packaged soya products with a total revenue of VND1,200 billion in 2011. The company aims to earn around VND2,000 billion in revenue from these two trademarks.

The non-alcoholic beverage market includes commodities like carbonated soft drinks, green tea, mineral water, fruit juice, and milk. Consumer demand for these products is growing but with different tastes.

Dozens of trademarks owned by both local and foreign companies—such as Real Leaf (Coca Cola), Vfresh (Vinamilk), Lipton Pure Green (Pepsi), C2 (URC), and Anatu (Bidirco) are still struggling hard to corner the beverage market.