Executive Summary

Aug 2019
Prospects
Westernisation generates demand but growth is contingent upon tailoring marketing to Vietnamese interests and customs

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.

Online promotion of ways of using cheese with traditional Vietnamese food attracts attention, especially of younger consumers

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 remains most popular, particularly among children

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.

Competitive Landscape
Manufacturers must invest in marketing to grow in awareness and demand

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.

Marketing efforts in support of processed cheese see positive results

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.

With emphasis on Western food, foodservice remains main distribution channel

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.

Prospects
Flourishing economy enables health-conscious consumers to buy high-quality, nutritious food, including drinking milk products

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.

Increased awareness and affluence creates demand for greater variety of healthy functional products and invites expansion into rural communities

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.

TH Group and Vinamilk expand domestic milk production to meet demand

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.

Competitive Landscape
Messaging controversy concerning Milo and Ovaltine ends up boosting both

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.

TH Group launches major campaign to support its first line of nut milks

“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.

Leading players add organic shelf-stable milk to health and wellness lines

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.

Prospects
Yoghurt set to see unabated growth as consumers increasingly recognise its benefits

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.

Vinamilk reinforces perception that yoghurt has many uses for beauty care

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’s versatility inspires cooks and consumers to invent new serving methods

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.

Competitive Landscape
Vinamilk garnishes reputation for innovation with sticky rice/yoghurt blend

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.

FrieslandCampina, TH Food Chain and other players encroach on Vinamilk’s territory

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.

Popularity of drinking yoghurt reflected in a plethora of new product offers

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.

Prospects
Increased domestic consumption of coffee and tea boosts sales

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.

Traditional use, high awareness and wide distribution account for significantly high volume share of condensed milk

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.

Lack of competition and familiarity constrains growth of cream and coffee whiteners

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.

Competitive Landscape
Vinamilk benefits from ability to adapt and change

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.

Lacking competition in coffee whiteners, Nestlé expands its distribution rather than investing in innovation

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).

While traditional retailers lead, modern grocery retailers are rapidly gaining ground

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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Dairy in Vietnam

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Vietnam with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Vietnam, our research will save you time and money while empowering you to make informed, profitable decisions.

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?

Why buy this report?

  • 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

This industry report originates from Passport, our Packaged Food market research database.

Dairy in Vietnam - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Proliferating use of butter and spreads in foodservice outlets serving Western food continues to boost both volume and value sales
Butter benefits from growing trend of baking cakes at home to share with others
Growth of butter remains contingent on intensified promotion

COMPETITIVE LANDSCAPE

With wide brand awareness and little competition, Tuong An holds value share within margarine and spreads
Due to insufficient marketing, many consumers lack incentive to give butter a try
Foodservice channel continues to account for most sales of butter

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2014-2019
Table 2 Sales of Butter and Spreads by Category: Value 2014-2019
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2014-2019
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2014-2019
Table 5 NBO Company Shares of Butter and Spreads: % Value 2015-2019
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2016-2019
Table 7 Distribution of Butter and Spreads by Format: % Value 2014-2019
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2019-2024
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2019-2024
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2019-2024
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2019-2024

Cheese

HEADLINES

PROSPECTS

Westernisation generates demand but growth is contingent upon tailoring marketing to Vietnamese interests and customs
Online promotion of ways of using cheese with traditional Vietnamese food attracts attention, especially of younger consumers
Spreadable processed cheese remains most popular, particularly among children

COMPETITIVE LANDSCAPE

Manufacturers must invest in marketing to grow in awareness and demand
Marketing efforts in support of processed cheese see positive results
With emphasis on Western food, foodservice remains main distribution channel

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2014-2019
Table 13 Sales of Cheese by Category: Value 2014-2019
Table 14 Sales of Cheese by Category: % Volume Growth 2014-2019
Table 15 Sales of Cheese by Category: % Value Growth 2014-2019
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2014-2019
Table 17 Sales of Unprocessed Cheese by Type: % Value 2014-2019
Table 18 NBO Company Shares of Cheese: % Value 2015-2019
Table 19 LBN Brand Shares of Cheese: % Value 2016-2019
Table 20 Distribution of Cheese by Format: % Value 2014-2019
Table 21 Forecast Sales of Cheese by Category: Volume 2019-2024
Table 22 Forecast Sales of Cheese by Category: Value 2019-2024
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2019-2024
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2019-2024

Drinking Milk Products

HEADLINES

PROSPECTS

Flourishing economy enables health-conscious consumers to buy high-quality, nutritious food, including drinking milk products
Increased awareness and affluence creates demand for greater variety of healthy functional products and invites expansion into rural communities
TH Group and Vinamilk expand domestic milk production to meet demand

COMPETITIVE LANDSCAPE

Messaging controversy concerning Milo and Ovaltine ends up boosting both
TH Group launches major campaign to support its first line of nut milks
Leading players add organic shelf-stable milk to health and wellness lines

CATEGORY DATA

Table 25 Sales of Drinking Milk Products by Category: Volume 2014-2019
Table 26 Sales of Drinking Milk Products by Category: Value 2014-2019
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2014-2019
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2014-2019
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2015-2019
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2016-2019
Table 31 Distribution of Drinking Milk Products by Format: % Value 2014-2019
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2019-2024
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2019-2024
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2019-2024
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2019-2024

Other Dairy

HEADLINES

PROSPECTS

Increased domestic consumption of coffee and tea boosts sales
Traditional use, high awareness and wide distribution account for significantly high volume share of condensed milk
Lack of competition and familiarity constrains growth of cream and coffee whiteners

COMPETITIVE LANDSCAPE

Vinamilk benefits from ability to adapt and change
Lacking competition in coffee whiteners, Nestlé expands its distribution rather than investing in innovation
While traditional retailers lead, modern grocery retailers are rapidly gaining ground

CATEGORY DATA

Table 36 Sales of Other Dairy by Category: Volume 2014-2019
Table 37 Sales of Other Dairy by Category: Value 2014-2019
Table 38 Sales of Other Dairy by Category: % Volume Growth 2014-2019
Table 39 Sales of Other Dairy by Category: % Value Growth 2014-2019
Table 40 Sales of Cream by Type: % Value 2014-2019
Table 41 NBO Company Shares of Other Dairy: % Value 2015-2019
Table 42 LBN Brand Shares of Other Dairy: % Value 2016-2019
Table 43 Distribution of Other Dairy by Format: % Value 2014-2019
Table 44 Forecast Sales of Other Dairy by Category: Volume 2019-2024
Table 45 Forecast Sales of Other Dairy by Category: Value 2019-2024
Table 46 Forecast Sales of Other Dairy by Category: % Volume Growth 2019-2024
Table 47 Forecast Sales of Other Dairy by Category: % Value Growth 2019-2024

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Yoghurt set to see unabated growth as consumers increasingly recognise its benefits
Vinamilk reinforces perception that yoghurt has many uses for beauty care
Yoghurt’s versatility inspires cooks and consumers to invent new serving methods

COMPETITIVE LANDSCAPE

Vinamilk garnishes reputation for innovation with sticky rice/yoghurt blend
FrieslandCampina, TH Food Chain and other players encroach on Vinamilk’s territory
Popularity of drinking yoghurt reflected in a plethora of new product offers

CATEGORY DATA

Table 48 Sales of Yoghurt and Sour Milk Products by Category: Volume 2014-2019
Table 49 Sales of Yoghurt and Sour Milk Products by Category: Value 2014-2019
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2014-2019
Table 51 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2014-2019
Table 52 Sales of Flavoured Yoghurt by Flavour: Rankings 2014-2019
Table 53 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2015-2019
Table 54 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2016-2019
Table 55 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2014-2019
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2019-2024
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2019-2024
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2019-2024
Table 59 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2019-2024

Packaged Food in Vietnam - Industry Overview

EXECUTIVE SUMMARY

Food safety concerns, expanded distribution, and improved disposable income are among a host of reasons why packaged food sales were thriving in 2019
Premium products not only perform well, but often drive growth of entire categories
In a highly fragmented market, the top 15 players and the artisanal value shares account for the lion’s share of market value sales
Convenience store expansion beyond major urban areas continues to boost demand for packaged food brands and products given more exposure
There are myriad reasons to be optimistic about continued strong value growth

FOODSERVICE

Sales to Foodservice
In an intensely competitive environment packaged food players strive to increase volume sales and brand image
International packaged food providers to foodservice, especially to major chains, have advantages by having global partnerships and in view of concerns over food safety and demand for higher-quality ingredients
Smaller independent foodservice players such as street stall operators tend to purchase their cooking ingredients from retailers/wholesalers rather than from manufacturers
Consumer Foodservice
Improved economy and societal/lifestyle changes drive Vietnamese to eat out more often
Street food is a popular tradition that continues to attract locals as well as tourists, driven by articles on the internet touting its many delights and delicacies
Foodservice restaurants entice younger, more adventurous consumers with various decorations and themes
Category Data
Table 60 Foodservice Sales of Packaged Food by Category: Volume 2014-2019
Table 61 Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 62 Forecast Foodservice Sales of Packaged Food by Category: Volume 2019-2024
Table 63 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2019-2024

MARKET DATA

Table 64 Sales of Packaged Food by Category: Volume 2014-2019
Table 65 Sales of Packaged Food by Category: Value 2014-2019
Table 66 Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 67 Sales of Packaged Food by Category: % Value Growth 2014-2019
Table 68 GBO Company Shares of Packaged Food: % Value 2015-2019
Table 69 NBO Company Shares of Packaged Food: % Value 2015-2019
Table 70 LBN Brand Shares of Packaged Food: % Value 2016-2019
Table 71 Penetration of Private Label by Category: % Value 2014-2019
Table 72 Distribution of Packaged Food by Format: % Value 2014-2019
Table 73 Distribution of Packaged Food by Format and Category: % Value 2019
Table 74 Forecast Sales of Packaged Food by Category: Volume 2019-2024
Table 75 Forecast Sales of Packaged Food by Category: Value 2019-2024
Table 76 Forecast Sales of Packaged Food by Category: % Volume Growth 2019-2024
Table 77 Forecast Sales of Packaged Food by Category: % Value Growth 2019-2024

SOURCES

Summary 1 Research Sources