Sales of hot drinks in Vietnam registered a downturn in demand during the height of the COVID-19 crisis in 2020 and 2021. This was mainly due to a significant declines in foodservice sales, as pandemic-related restrictions forced the closure of all on-trade channels.
In 2022, hot drinks witnessed product innovation in both tea and coffee, both of which offered much potential for growth. In particular, instant standard coffee saw a rising number of new products and brands, many of which were made with Arabica beans, which are renowned for their delicate taste.
Nestlé Vietnam Co Ltd maintained its overall leadership of hot drinks in 2022, underpinned by its dominance in coffee and other hot drinks. The player is highly active in terms of marketing and advertising activity and also leads in product innovation in the industry.
During the height of the pandemic in 2020 and 2021, supermarkets and hypermarkets gained share at the expense of small local grocers, This was due to restrictions put into place by the Vietnamese government, which dictated that all retailers selling non-essential goods, including the majority of traditional retailers, had to close. The share accounted for by modern channels stabilised somewhat in 2022, however, following the ending of pandemic-related restrictions and a return to more normal shopping habits.
At the peak of the COVID-19 pandemic, the Vietnamese government implemented strict social distancing protocols in an effort to control the spread of the virus. This involved the closure of all educational institutions such as schools and universities as well as the mandated closure of all restaurants, bars and pubs.
Overall, hot drinks will maintain a positive performance over the forecast period, with only malt-based hot drinks expected to suffer a decline in volume terms. Growth will be led by the recovery of on-trade volumes, following the easing of social distancing measures, given the high vaccination rate across the country.
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This is the aggregation of Coffee, Tea, and Other Hot Drinks.See All of Our Definitions
This report originates from Passport, our Hot Drinks research and analysis database.
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