Other Hot Drinks in Vietnam

PROSPECTS

Nestlé’s RTD version of Milo attracts consumers seeking convenience, to the detriment of malt-based hot drinks in powder format

Malt-based hot drinks continued to register negative performance in 2019. It posted a higher decline in retail volume growth and slower value growth than what was seen in the previous year despite the rising trend of health and wellness in the country.

“Other” plant-based hot drinks set to continue posting double-digit growth as health and wellness trends keep boosting demand

Over the review period, demand for plant-based hot drinks increased due to greater awareness, despite the negative performance of malt-based hot drinks. “Other” plant-based hot drinks continued to attract consumers in 2019 thanks to the increasing health and wellness trend.

Supplement nutrition drinks also pose a challenge, as consumers with more disposable income also look to them for more convenience

Due to their convenience as well as nutritional aspects, supplement nutrition drinks such as Ensure are competing with and have limited the growth rate of “other” hot drinks despite the fact that Ensure and similar supplement nutrition drinks have higher pricing. Players place greater emphasis on convenience when targeting consumers with growing disposable income, and this has benefited sales of Ensure and others, somewhat to the detriment of this category.

COMPETITIVE LANDSCAPE

Dynamic marketing activity helps Nestlé maintain its lead

Nestlé Vietnam with its famous malt-based hot drinks brand Milo maintained its dominance in “other” hot drinks in 2019, thanks to its strong brand reputation and dynamic marketing activity. For example, the company and Barcelona Football Club work together towards a meaningful goal, helping children to raise awareness about the importance maintaining a healthy and active lifestyle through sports and by participating in physical activities.

International players dominate due to having stronger resources, wide distribution and dynamic marketing activity

International players such as Friesland Campina Vietnam, Nestlé Vietnam and Gold Roast Vietnam continued to dominate other hot drinks in 2019, due to strong their strong financial resources, wide distribution network and dynamic marketing activity. Second-ranked Vinacafe Bien Hoa is the only truly competitive domestic player in this category.

Most domestic players compete with lower prices and by targeting suburban and rural areas

Domestic players are struggling to gain more traction in this category and are content instead to compete with international brands with lower pricing and by targeting suburban and rural areas to avoid tough competitive markets such as Ho Chi Minh City and Hanoi. However, Vinacafe Bien Hoa is an exception due to its strong position in “other” hot drinks, where it dominates “other plant-based hot drinks.

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