Cheese is not a traditional food in Vietnam; it has only appeared in conjunction with increased interest amongst Vietnamese in Western lifestyles and Western food. Westernisation, which is linked by many with a free spirit and personal independence, is significantly attractive to Vietnamese people, especially the youth.
Using spreadable processed cheese and other processed cheese on crackers as a snack has become very popular in Vietnam. However, in the absence of major efforts on the part of manufacturers to promote the use of other types of cheese, it has also become common to see new ways of using cheese with traditional Vietnamese food, with this covered by bloggers on social media and on various websites devoted to food lovers.
Spreadable processed cheese continued to account for the majority of value sales of cheese Vietnam, and international players such as Bel Vietnam and Groupe Lactalis and the local player Vinamilk maintained their lead in this category in 2019. The fact that consumer awareness cheese in general is not strong challenges the expansion of other types of cheese in retailing channels.
Within Vietnam, there has been a lack of marketing activity to build consumer awareness of cheese in general. Indeed, Vietnamese people know cheese as a Western food, but they do not know much about its nutritional content and have had little opportunity to taste food that has been prepared with cheese.
Only the manufacturers of processed cheese have been investing much in marketing cheese in Vietnam, in 2019 the efforts of all three leading players in spreadable processed cheese seem to have paid off as all of them increased their value sales, in both processed and spreadable processed cheese by double digits over the year. Bel Vietnam promoted La Vache Qui Rit in television commercial, visible on YouTube, which showed consumers enjoying the cheese on crackers and with fruit in various settings and Vinamilk has various promotion programmes including online support of its Phô Mai processed cheese.
Except for spreadable processed cheese, which is predominantly sold in independent small grocers and supermarkets, respectively, the foodservice channel is still the key channel for cheese. The foodservice channel also saw the highest value growth over the review period, as currently, cheese is most popular in Western food restaurants, cafés and bars and bakeries.
Vietnam’s GDP growth continued to be high and all aspects of the country’s economy continued to flourish in 2019. This is reflected in double-digit growth of drinking milk products, as the improved standard of living boosted milk consumption per capita in 2019 by the highest percentage seen over the review period.
Vietnamese consumers today are more knowledgeable and aware of their choices. In general, the average educational level of the population improved over the review period, and especially urban citizens are quite knowledgeable about food safety and food nutrition.
Recognising that the Vietnamese have strong national pride and usually prioritise choosing domestic good-quality products over imports, as well knowing the need for domestic supplies of raw milk to meet local demand, TH Group and Vinamilk both continue to expand domestic production. After starting its first high-tech dairy and dairy processing project applying high technology in Nghe An province in 2009, TH Group is now is implementing ambitious plans to capitalise on what it achieved in creating a dairy facility that meets international standards.
In March 2018, Milo (Nestlé Vietnam) began an impressive communication campaign, which both reinforced and improved the brand’s leading position in flavoured milk drinks, especially in the segment of barley cacao drinks, in 2019. Nestlé’s television commercial “Nhà vô d?nh làm t? Milo”, meaning “Champions made by Milo” was a huge success; it attracted more than 25 million views on YouTube.
“Other” milk alternatives, especially various kinds of dairy- and gluten-free nut milks, have been performing well since they first began appearing in the Vietnamese market in 2016. Amongst the most successful players in this category so far have been Thailand-based Simple Foods (137 degrees) and Woongjin Food (Morning Rice brand), which is now owned by the Taiwanese food giant Uni-President Enterprises.
New product development in shelf-stable milk was focused on adding health and wellness benefits in 2018-2019. Indeed, after successfully competing with organic fresh milk during the review period the three leading players – TH Food Chain, Vinamilk and FrieslandCampina Vietnam – now offer organic shelf-stable milk in recognition of its great potential in Vietnam.
Retail value and volume growth of yoghurt continued to rise by double digits in Vietnam in 2019, as it had throughout the review period. Vietnamese consumers continue to believe that 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.
As the Vietnamese economy is stably growing, average income has improved, and most essential needs such as for food and accommodation can now be met, many consumers can better afford to act on their interest in beauty and health. In terms of yoghurt, Vietnamese consumers already believe that it can be used for beauty care; moreover, recent efforts by the leading yoghurt player Vinamilk have done much to reinforce this perception.
Yoghurt is so widely available, affordable and enjoyed in Vietnam that consumers as well as foodservice operators have been finding inventive new ways to enjoy and serve yoghurt in – or on top of – food. Amongst the many snacks and dishes utilising yoghurt that have been observed in Vietnam are yoghurt with a topping, such as frozen yoghurt with fruit, chocolate, or crushed nuts; and yoghurt as a topping, such as cupcakes with yoghurt and chocolate or fruit topping and donuts with a yoghurt glaze.
Vinamilk continued to hold the dominant share within yoghurt and sour milk drinks overall in 2019 on the strength of its product innovation, strong distribution network and strong investment in marketing activities including television commercials and in-store promotion. As its products are widely distributed nationwide, Vinamilk receives positive feedback from consumers and retailers.
While remaining the dominant player within yoghurt in 2019, Vinamilk faced tougher competition, particularly from FrieslandCampina and TH Food Chain within the drinking yoghurt and plain yoghurt landscape. Nutifood Nutrition Food also gained value share in plain yoghurt at Vinamilk’s expense over the year.
Drinking yoghurt saw the strongest value growth within yoghurt and sour milk products again in 2019, and all the major players saw double-digit value growth in this category over the year. Not only are Vietnamese increasingly demanding drinking yoghurt for its on-the-go convenience but they also are responding to well to the plethora of new product offers that players such as FrieslandCampina Vietnam (with brands Yomost and Fristi), Vinamilk (with brands Susu and Probi) and TH Food Chain (with TH True) put forth.
Growth of domestic consumption of tea and coffee in Vietnam has positively affected the “other” dairy category. Indeed, coffee whitener, condensed milk or cream is mainly used for making drinks and food related to tea and coffee.
Strong consumer awareness, wide distribution and long tradition account for the significant consumption of condensed milk in Vietnam. Condensed milk has long attracted Vietnamese people, and it is a product that older generations, particularly, have loved since childhood.
Beyond the fact that cream and coffee whiteners have not traditionally been consumed in Vietnam, the main reason why these two categories remain so small is partially due to a lack of competition. Anchor cream by Fonterra Brands (Vietnam) and Coffee-mate coffee whiteners by Nestlé Vietnam are amongst the few products available in their respective categories.
Vinamilk continued to dominate ““other” dairy in 2019 on the strength of its leading position in condensed milk, by far the best-selling “other” dairy product in Vietnam. Having offered little by way of product innovation over the year other than introducing a wider variety of pack types and sizes, the company can easily rely on its strong brand awareness, robust distribution network and numerous marketing activities to maintain its lead in this category.
There has been a lack of momentum in developing sales of coffee whiteners in Vietnam, and over the review period volume growth of the category has remained moderate and stable. Moreover, until recently it was hard to find many brands in this category except for Coffee-mate (Nestlé Vietnam Ltd).
Independent small grocers and other grocery retailers in the traditional channel continue to account for the large majority of “other” dairy sales, although modern grocery retailers – supermarkets, hypermarkets and convenience stores – expanded throughout the review period and all of these channels increased their value share of “other” dairy by double digits between 2014 and 2019. Condensed milk is carried everywhere, with coffee whiteners available to a lesser extent and cream presence largely restricted to modern retailers that have refrigerated display compartments.
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This industry report originates from Passport, our Packaged Food market research database.