Carbonates in Vietnam

2020 IMPACT

Significant total sales declines seen in 2020 as COVID-19 puts pressure on demand

In general, the COVID-19 situation led to strong declines being seen in total volume sales of carbonates during 2020. Although retail volume sales increased in the category over the course of the year, substantial pressure came on demand for carbonates in the on-trade.

Corporate social responsibility programmes come to the fore as a marketing channel

Among the most notable changes seen in company activity in carbonates during 2020 was the strong focus of the category leaders on corporate social responsible for programmes. Throughout the year, the leading players in carbonates, including key names Coca-Cola Vietnam and Suntory PepsiCo Vietnam sought to give something back to the communities that form its core consumer base, with various social activities undertaken to support the relief efforts of the Vietnamese government to help the population overcome hardship due to the COVID-19 situation.

Low-calorie cola picks up sales as consumers look for healthier beverages

One important trend to have emerged from the COVID-19 pandemic is the stronger focus on health and wellness among many consumers. At the same time, consumers are becoming less interested in sugary beverages, with carbonates having been linked to a variety of lifestyle diseases, notably type II diabetes, heart disease and metabolic syndrome.

RECOVERY AND OPPORTUNITIES

The robust response to COVID-19 to support the recovery of carbonates sales

Over the forecast period, on-trade volume sales of carbonates are expected to recover strongly, while off-trade value sales are expected to remain consistently positive. The strong recovery anticipated in the category can be attributed mainly to the very good job done by the Vietnamese authorities to bring the COVID-19 situation under control during the second quarter of 2020.

Social responsibility and greater sustainability to become longer-term trends

The greater focus on corporate social responsibility programmes that was seen in carbonates during 2020 is expected to become more of a permanent trend in the category during the forecast period. Key players such as Coca-Cola Vietnam and Suntory PepsiCo Vietnam are likely to continue pursuing sustainable development activities in Vietnam as this represents an way for large companies to make a contribution to Vietnam’s development as well as to build strong brand equity and present themselves as responsible companies that are able to see things from the consumers’ perspective.

Health and wellness trend raises questions over the long-term viability of carbonates

The increasing importance of the health and wellness trend in Vietnam is expected to be a major influence on sales of carbonates in the country during the forecast period. In particular, consumers are becoming increasingly aware of the negative effects of over-consuming sugar, particularly the increase chance of type II diabetes and metabolic syndrome.