Demand for the largest value category within dairy products and alternatives, drinking milk products, has remained fairly stable throughout the pandemic in Vietnam, albeit recording slower volume growth rates compared to 2019. Restrictions on foodservice outlets however, have not resulted in a notable switch towards retail despite notable declining sales, with many of these establishments continuing to offer takeaway.
The competitive landscape of drinking milk products is likely to remain fairly consolidated amongst three leading players in 2021, Vinamilk, TH Food Chain JSC and FrieslandCampina Vietnam, with production levels remaining stable during the pandemic. Vinamilk and TH Food Chain in particular, continue to benefit from provenance, gaining further value share as the Vietnamese have strong national pride and often prioritise domestic good-quality products, in addition to the players’ investment in increasing manufacturing capacity over the review period.
The quality and innovation within drinking milk products in Vietnam is continuing to improve over time. Due to growing competition within the category, an increasing number of brands now prefer to use fresh milk instead of reconstituted ingredients.
Drinking milk products will continue to experience further stable demand over the forecast period, as many Vietnamese perceive milk to be a healthy addition to their diets due to its high nutritional content, supported by government campaigns and players’ marketing efforts. Heightened health awareness as a result of the pandemic is also likely to boost its positive perception, with products that are exposed to fewer processes likely to increase in popularity; for example, fresh milk will continue to outperform shelf stable in volume growth terms although its overall size will remain small due to the logistics of keeping it cool in a hot climate, therefore, limiting its distribution through the dominant traditional grocery retailers due to lack of refrigeration cabinets.
Health and wellness trends are likely to lead to an increasing number of health-conscious consumers searching for drinking milk products with reduced sugar content over the forecast period. While no-sugar options have not found favour with a wide audience due to concerns over flavour, reduced sugar variants make it easier for consumers to gradually adjust their preferences in terms of taste.
Local manufacturers are likely to continue to lead drinking milk products over the forecast period, as Vietnamese consumers prefer to support local businesses, a particularly relevant trend since the emergence of the pandemic, while domestic production ensures affordable prices. In addition to leaders Vinamilk and TH Food Chain, smaller producers including Nutifood Nutrition Food and Viet Nam VitaDairy Milk announced their commitment to the category at the end of the review period with long-term strategies by investing in dairy farms and increasing production standards.
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Understand the latest market trends and future growth opportunities for the Drinking Milk Products 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 Drinking Milk Products research and analysis database.
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