Other Hot Drinks in Vietnam

2020 IMPACT

A strong shift to the retail channel is noted as on-trade sales plummet

Although the COVID-19 pandemic had a particularly negative impact on sales of other hot drinks in the on-trade channel during 2020, the presence of the COVID-19 pandemic in Vietnam boosted off-trade sales of other hot drinks over the course of the year. The main reason for the major decline seen in on-trade sales of other hot drinks was the nationwide quarantine lockdown that was implemented in Vietnam for six weeks between the middle of March and the end of April.

Emergence of RTD versions of leading brands puts pressure on sales

Demand for other hot drinks has been under pressure since at least 2017 due to the emergence of ready-to-drink (RTD) versions of some of the category’s leading brands. These RTD formats of products such as Milo and Ensure are classified by Euromonitor International under flavoured dairy drinks, rather than soft drinks or hot drinks and for this reason the increasing consumer interest in RTD formats of other hot drinks brands have undermined sales of non-alcoholic drinks generally.

The marketing focus shifts due to the pressures created by COVID-19

One of the most important impacts of the COVID-19 crisis on the operations of the leading players in other hot drinks during 2020 was that it motivated them to shift their focus away from new product development and the marketing of these new products and towards ensuring that their distribution networks were robust enough to ensure a consistent supply of their products on retail shelves. Indeed, with demand for the hot drinks shifting significantly from the on-trade to the off-trade over the course of the year, making sure that products and brands are always available in as many retail outlets as possible was seen as crucial to success.

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