July 7, 2008
Independent Forecasts and Competitive Intelligence on Vietnam’s Food and Drink Industry Out Now
Research and Markets (http://www.researchandmarkets.com/research/d6a65e/vietnam_food_and_d) has announced the addition of the "Vietnam Food and Drink Report Q2 2008" report to their offering.
Yet another flurry of activity in Vietnam's fledgling, but high-growth beer market has been witnessed this quarter with almost all of the industry's leading players announcing growth plans. In BMI's newly published Q208 Vietnam Food & Drink Report, we examine exactly what is drawing investors to what remains a low return market at the present time, even if the long-term outlook for the industry is bright.
Since the turn of the year, Vietnam's beer industry has witnessed market leaders Sabeco and Habeco announce fund-raising initial public offerings (IPOs), only for Habeco to postpone its listing after Sabeco's ended up only 61% subscribed. Sabeco's performance was not, however, perceived to indicate weaknesses in the company or the beer industry itself; rather it was viewed as a consequence of general market weakness and low investor confidence. This take is certainly supported by the flood of external investment the beer industry has received of late.
February 2008, saw UK major Scottish & Newcastle (S&N) receive its first licence for a brewery construction in Vietnam, with Long An province the chosen site. The impact of this news should yet stretch to Carlsberg who looks set to acquire S&N's Vietnamese business as part of a post-takeover asset split with acquisition partner Heineken. With Carlsberg also looking likely to increase its 10% stake in Habeco, when the latter's second-round privatisation gets under way, Vietnam's beer competitive landscape could yet receive quite a shake-up. Add to this mix March's news that Asia Pacific Breweries (APB), Heineken's regional joint venture, had boosted output at its Hatay Brewery Limited by 50% in a bid to facilitate expansion and that Japan's Kirin was considering following up its Vietnamese soft drinks foray with the pursuit of a strategic partnership in the brewing sector, and Vietnam's beer market is suddenly more dynamic than ever before.
Attracting this investment and facilitating this dynamism are Vietnam's sound macroeconomic fundamentals, not to mention of course a bright outlook for beer consumption. BMI is forecasting volume sales growth of 61.1% in Vietnam's beer market to 2012, a figure that outstrips wider alcoholic industry volume growth of 60.4%. Underpinning this is an expectation that GDP will grow by 8.1% annually to 2012, supported by strong FDI inflows and in part by steady population growth of 7.1% to 92.7mn in 2012. Urbanisation will also serve to boost consumption across all consumer goods industries with BMI forecasting that Vietnam's urban population as a percentage of its whole will increase from 26.7% in 2005 to 43.2% in 2030.
Of course low existing spending levels, and a corresponding preference for premium beers, must be taken into consideration when pouring funds into Vietnam's beer industry. However, with the long-term promise of this market barely in question, no ambitious player can afford to be left behind.
Key Topics Covered:
-Food and Drink
-Food & Drink Ratings Appendix
- Saigon Co-op
- Metro Cash & Carry
- Vietnam Milk Joint Stock Company (Vinamilk)
- San Miguel Purefoods Vietnam Co Ltd
- Saigon Beer Alcohol and Beverage Corporation (Sabeco)
For more information visit http://www.researchandmarkets.com/research/d6a65e/vietnam_food_and_d