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Cheese is becoming more popular in traditional Vietnamese foods
Cheese and cream cheese increased in popularity in 2018, on the back of the stronger prevalence of Western-style foods in Vietnam. Although cheese was not part of the traditional Vietnamese diet, it is increasingly being incorporated in traditional foods found in Vietnam, in both street food and in foodservice outlets – such as seafood with cheese flavour, milk tea with cheese jelly and sweet potato sticks with cheese condiments – and is therefore expected to see increasing demand.
The need for customisation to meet the tastes of Vietnamese consumers
Over the forecast period, cheese is expected to see growing demand due to its stronger presence in Vietnamese foods and increasing demand amongst consumers. However, although Vietnamese consumers are getting accustomed to the concept of cheese in food, their knowledge of the different varieties of products and brands available remains limited.
Spreadable processed cheese is the most popular type of cheese in Vietnam
Spreadable processed cheese accounts for the majority of value sales of cheese in Vietnam, with local manufacturers such as Vietnam Dairy Products and international players such as Bel Vietnam and Groupe Lactalis present in this category. Bel Vietnam, the leader in spreadable processed cheese, employs a wide range of diverse marketing activities to help to build consumer awareness of cheese in Vietnam.
Bel Vietnam dominates cheese throughout the review period
Owing to its brand La Vache Qui Rit and the top-of-mind awareness that they it has gained via numerous marketing efforts, Bel Vietnam remained the leader in cheese in Vietnam in 2018. Bel Vietnam offers a wide range of products, from spreadable processed cheese to packaged hard cheese, and targets different types of consumers within a particular category; for instance, in spreadable processed cheese, Bel Vietnam has La Vache Qui Rit for mass-market consumption and Belcube for babies.
Opportunities for other manufacturers
Over the forecast period, Bel Vietnam is expected to continue to perform well and maintain its leading position in cheese. Regardless, as awareness of cheese and its applications in Vietnamese cuisine grows, there will be opportunities for other manufacturers to secure positions in the market if they focus on creating products that are tailored to and marketed towards the preferences of Vietnamese consumers.
Consumer education and distribution will be key
Consumer education about cheese may be necessary to increase demand, and effective product distribution will also be key for many manufacturers to expand their presence in Vietnam. This will especially be the case for international players which may only have dedicated distributors in Vietnam, with no supporting marketing activities to boost product awareness.
Higher living standards drive the demand for drinking milk products
Vietnam underwent many changes in recent years. Currently, the mindset of society is on building the economy and on societal progression.
Opportunities and challenges in the forecast period
The Vietnamese economy is expected to continue to grow over the forecast period, which will improve the demand for all consumer goods. Drinking milk products, which are perceived as healthy and nutritious, are expected to see strong growth as consumers become more aware of the need to stay healthy.
The establishment of trust in drinking milk products
Manufacturers tried to establish trust in their products amongst their target consumers in 2018. The brand positioning and marketing employed by manufacturers varied, including: promotion of the use of clean materials and production methods to produce milk; Vietnam Dairy Products (Vinamilk) announced its plan to work together with different farms around Vietnam to improve their processing capabilities; TH Food Chain emphasised its ownership of a herd of cows to provide clean milk for its products; and FrieslandCampina Vietnam focused on its supply of milk from farms in the Netherlands.
Drinking milk products is fiercely contested, with domestic players leading
Domestic players led most categories within drinking milk products in 2018, such as TH Food Chain in fresh milk, Vietnam Dairy Products (Vinamilk) in shelf stable milk and Vietnam Soy Milk (Vinasoy) in milk alternatives. In each region in Vietnam, there are also various fresh milk brands that serve the local residents – such as Moc Chau and Long Thanh.
The challenge from international players will intensify the competition
International players such as FrieslandCampina Vietnam and Nestlé Vietnam are also attempting to establish themselves in the market. These international companies may not have the distribution or local knowledge of domestic companies, but could succeed in the long run nonetheless, owing to greater financial potential, economies of scale and more experience due to operating in several other markets.
Opportunities for new and existing players
Over the forecast period, manufacturers are expected to continue to raise awareness about drinking milk products amongst consumers, with an emphasis on product quality and health benefits. This will help to grow the market in terms of depth – the current volume of drinking milk products consumed in Vietnam is estimated to be only slightly more than half of the total unmet potential of the category.
The functional benefits of yoghurt appeal to health-conscious consumers
Vietnamese consumers believe that the consumption of yoghurt brings about diverse benefits, acting as a source of nutrition, as a food contributing to external beauty and as an aid to digestion. Over the review period, brands also helped to reinforce these beliefs with their marketing messages; for instance, Probi by Vietnam Dairy Products (Vinamilk) emphasised that its yoghurt helps to “increase body resistance” and TH True Yoghurt by TH Food Chain emphasised that its yoghurt can provide “helpful bacteria for digestion”.
More diverse demand, but a focus by manufacturers on the mass market
Awareness of yoghurt and its functional benefits, as well as its affordable price, is expected to continue to drive the strong growth of yoghurt and sour milk products over the forecast period. Consumer preferences in yoghurt are expected to become more diverse in terms of packaging and country of origin; for instance, yoghurt in larger pack sizes to appeal to value-conscious consumers, or Greek yoghurt.
The threat to drinking yoghurt from juice and milk
Product combinations involving juice and milk became increasingly popular in 2018; such as Vfresh by Vietnam Dairy Products (Vinamilk) and Nutriboost by Coca-Cola Beverages Vietnam. These juices with milk are positioned as fresh and nutritious beverages, which are similar attributes that consumers demand for when they choose drinking yoghurt.
Vietnam Dairy Products continues to lead yoghurt and sour milk products
In 2018, a large proportion of value sales of yoghurt and sour milk products in Vietnam continued to come from plain yoghurt. Plain yoghurt has been habitually consumed by Vietnamese consumers over a long period of time, and its application is wide, especially in freshly-made drinks.
Despite the strong position of Vietnam Dairy Products (Vinamilk) over the review period, it started to suffer strong competition from brands such as TH True Yoghurt and Dutch Lady, as these competitors offer yoghurt with different benefits. Also, Nutifood Nutrition Food is a fast-emerging competitor with its spoonable yoghurt product range, with a wide distribution network in traditional trade channels and intensive price promotions to encourage product adoption by both retailers and consumers, which will inevitably lead to brand awareness and sales.
Vietnam Dairy Products is expected to maintain its lead
Over the forecast period, Vietnam Dairy Products is expected to continue to lead both plain yoghurt and yoghurt and sour milk products, due to habit persistence in terms of yoghurt consumption, as well as strong brand awareness, distribution and marketing. However, the extent of its lead will depend on how successful competitors are in creating demand for flavoured and functional yoghurt.
Coffee and tea drive demand in other dairy
Over the review period, coffee, milk tea and smoothies were popular amongst Vietnamese consumers, and the number of coffee shops and milk tea chains increased. In addition, more Vietnamese consumers want to enjoy these drinks not only outside of the home, but also at home for personal use, for family gatherings and when chatting with friends.
Product taste is the biggest factor in consumer choice in other dairy
Other dairy products in Vietnam are mainly used as ingredients for consumers to make their own drinks. Although they are used in addition to the drink, they are an indispensable element.
Communication will be key
Over the forecast period, improvements in the standard of living will continue to drive the growth of other dairy. However, manufacturers must be particularly careful to communicate the benefits of their products to consumers.
Historically, Vietnam Dairy Products (Vinamilk) had a strong positioning with its brands Ong Tho and Ngoi Sao Phuong Nam, which catered to consumers who needed to improve their overall health; for instance, address malnutrition. However, as Vietnamese society and consumers’ requirements evolved over time, Vinamilk also changed its brand positioning to match these demands.
Little competition in cream and coffee whiteners
Cream is set to see the strongest growth in other dairy in the forecast period. However, similar to coffee whiteners, the actual size of the cream category in value terms is small in comparison with the total value of other dairy.
Opportunities in the forecast period in cream and coffee whiteners
Over the forecast period, as coffee and tea are expected to grow, the use of cream and coffee whiteners for at-home consumption is also expected to increase. There is potential in these categories, and manufacturers which can build awareness of their brands to establish top-of-mind awareness whilst educating consumers about the uses of such products will be well-positioned to take advantage of this growth.
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The Dairy in Vietnam market research report includes:
Analysis of key supply-side and demand trends
Detailed segmentation of international and local products
Historic volumes and values, company and brand market shares
Five year forecasts of market trends and market growth
Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
What is the market size of Dairy in Vietnam?
What are the major brands in Vietnam?
How has the economic downturn impacted sales performance given its staple food status?
Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
How are volatile farmgate prices for milk impacting retail prices and sales performance?
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Track key industry trends, opportunities and threats
Inform your marketing, brand, strategy and market development, sales and supply functions
Packaged food continues to perform strongly in 2018
Manufacturer investment helps to offset increasing maturity of larger categories
Competitive environment remains crowded but relatively consolidated
Boom in convenience stores impacts positively on packaged food distribution
Innovation and increased competition will support positive market performance
Sales to Foodservice
Packaged food volume sales to foodservice continue to rise as Vietnamese consumers eat out more frequently Large foodservice chains increasingly turn to international packaged food suppliers
Food safety concerns exert growing influence over foodservice choices of Vietnamese consumers Overlap between retail and foodservice increasingly visible in 2018 Foodservice outlets in downtown locations focus on improving interior design and service quality
Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018 Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018 Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023 Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 5 Sales of Packaged Food by Category: Volume 2013-2018 Table 6 Sales of Packaged Food by Category: Value 2013-2018 Table 7 Sales of Packaged Food by Category: % Volume Growth 2013-2018 Table 8 Sales of Packaged Food by Category: % Value Growth 2013-2018 Table 9 GBO Company Shares of Packaged Food: % Value 2014-2018 Table 10 NBO Company Shares of Packaged Food: % Value 2014-2018 Table 11 LBN Brand Shares of Packaged Food: % Value 2015-2018 Table 12 Penetration of Private Label by Category: % Value 2013-2018 Table 13 Distribution of Packaged Food by Format: % Value 2013-2018 Table 14 Distribution of Packaged Food by Format and Category: % Value 2018 Table 15 Forecast Sales of Packaged Food by Category: Volume 2018-2023 Table 16 Forecast Sales of Packaged Food by Category: Value 2018-2023 Table 17 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023 Table 18 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023
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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.