Margarine and spreads continues to dominate retail volume sales of butter and spreads in Vietnam due to its greater affordability compared to butter, a factor which is supported by dominant brands within the category such as Tuong an (Tuong An Vegetable Oil JSC) and Meizan (Cai Lan Oils & Fats Industries Co Ltd) which benefit from local production which allows them to maintain fairly stable unit prices. The leader’s strength lies in its wide, well-maintained distribution network and strong consumer awareness, while Cai Lan Oils & Fats Industries, which focuses on vegetable oil, shortening and frying fats, is its only substantial competitor but remains at a significant distance in terms of value share.
Demand for butter is dominated by foodservice in Vietnam, and therefore retail volume sales have been significantly impacted by the response to the pandemic including the closure of horeca establishments in terms of dine-in options, although some outlets have continued to offer takeaway or home delivery in an attempt to survive. While retail volume sales have seen stable demand, overall their presence is negligible due to their much higher price point.
Foodservice has been dramatically impacted by the response to the pandemic in terms of being unable to offer dine-in options to consumers, resulting in double-digit volume declines for both butter, and margarine and spreads. It is likely to continue to face a challenging environment during 2021 with another surge in virus cases, resulting in stricter measures having been introduced once again.
Educating consumers about the benefits of butter and spreads and its wider usage potential to expand the category’s target audience will be a key driver for category growth over the forecast period, although lingering effects of the pandemic for the country are likely to result in caution amongst players in terms of notable financial investment over the early part of the forecast period.
Westernisation is likely to continue to support a positive performance for butter and spreads over the forecast period. Not being a traditional packaged food in Vietnam, local consumers have gained greater awareness of its uses and applications through exposure to Western cuisine through foodservice, with urban consumers particularly influenced by this trend, encouraging them to search for butter and spreads in supermarkets and other modern grocery retailers.
International brands will continue to perform well within butter over the forecast period due to their dominance as a result of limited domestic production, a trend which is unlikely to change in the short term. The size of the category is not large enough to gain the attention of, and stronger investment by, leading local players such as Vinamilk.
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Understand the latest market trends and future growth opportunities for the Butter and Spreads industry in Vietnam with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Butter and Spreads research and analysis database.
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