Sweet and Savoury Snacks

Sweet and Savoury Snacks - Vietnam
Euromonitor International : Country Sector Briefing November 2010
Sweet and Savoury Snacks
Vietnam
List of Contents and Tables

Headlines ................................................................................................................................................................. 1 Trends ...................................................................................................................................................................... 1 Competitive Landscape .......................................................................................................................................... 1 Prospects .................................................................................................................................................................. 2 Category Data ......................................................................................................................................................... 3 Table 1 Sales of Sweet and Savoury Snacks by Category: Volume 2005-2010 ............................. 3 Table 2 Sales of Sweet and Savoury Snacks by Category: Value 2005-2010 ................................ 3 Table 3 Sales of Sweet and Savoury Snacks by Category: % Volume Growth 20052010 ................................................................................................................................... 3 Table 4 Sales of Sweet and Savoury Snacks by Category: % Value Growth 20052010 ................................................................................................................................... 4 Table 5 Extruded Snacks by Type: % Value Breakdown 2005-2010 ............................................. 4 Table 6 Sweet and Savoury Snacks Company Shares 2005-2009 .................................................. 4 Table 7 Sweet and Savoury Snacks Brand Shares 2006-2009 ........................................................ 5 Table 8 Sales of Sweet and Savoury Snacks by Distribution Format: % Analysis 2005-2010.......................................................................................................................... 6 Table 9 Forecast Sales of Sweet and Savoury Snacks by Category: Volume 20102015 ................................................................................................................................... 7 Table 10 Forecast Sales of Sweet and Savoury Snacks by Category: Value 2010-2015 .................. 7 Table 11 Forecast Sales of Sweet and Savoury Snacks by Category: % Volume Growth 2010-2015............................................................................................................. 7 Table 12 Forecast Sales of Sweet and Savoury Snacks by Category: % Value Growth 2010-2015.......................................................................................................................... 8 Summary 1 Other Sweet and Savoury Snacks: Product Types ............................................................. 8
Euromonitor International
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Vietnam
SWEET AND SAVOURY SNACKS IN VIETNAM

HEADLINES
Sweet and savoury snacks to register a growth rate of 14% in current value terms to reach sales of VND4,431.4 billion Increasing demand for indulgence food and a brighter economic outlook drive sales Fruit snacks to continue to experience most outstanding sales growth of 22% in 2010 Unit price increases at slightly lower rate than 2009 due to tougher competition Tan Tan Food & Foodstuff Co remains the leader with a 10% value share in 2009 Sweet and savoury snacks is predicted to grow at a CAGR of 6% in constant value terms over the forecast period
TRENDS
In 2010, the economy continued to show positive signs of recovery and consumers confidence in spending quickly came back. General demand for indulgence food and sweet treats grew fast due to improved living standards and higher disposable incomes, which further boosted the development of sweet and savoury snacks in Vietnam. The main consumer group for these products spanned a wide age range; from children and teenagers to youngsters and the middle-aged. While the adult group was loyal to the more traditional sweet and savoury snacks such as beef jerky and nuts, the younger generation was the major target of extruded snacks and chips/crisps. Initially evolved within urban areas, packaged sweet and savoury snacks continuously expanded to other regions to avoid intense competition and raise market penetration. Sales in 2010 posted slightly slower growth compared to the previous year. The main reason was that consumption in big cities, main sources of sector sales, was reaching maturity, particularly in some huge categories such as nuts and extruded snacks. Furthermore, market expansion to other regions, such as smaller towns and rural areas, was not fast enough to compensate the slowing down trend in big cities due to poor infrastructure and underdeveloped retail networks. Fruit snacks will experience the best performance in 2010 with sales growth as high as 22% to reach a value of VND106 billion. Apart from the fact that it is still a fairly niche, its healthy image also helped to push its growth over other categories. Fruit snacks typically use more natural ingredients and go through a less complicated manufacturing process, thus consumers usually think these products have more nutritive value and are healthier than other kinds of snack. Thus, as consumer health awareness rises, a trend seen in many packaged food products, fruit snacks won peoples favour over others. For fruit lovers, fruit snacks also offered the opportunity to enjoy fruits all year round without having to wait for the right season. In 2010, the most popular type of fruit snacks was dried jack fruit. Many other fruits and vegetables were also popular, such as yam and banana. Sweet and savoury snacks unit price in 2010 kept its upward movement, however at a slightly lower rate as compared to 2009. Since almost all products in this sector have close relationships with oil prices, a major ingredient in snack production, the cool down of oil prices in the global market as well as the local market during the year after its peak in 2008 and 2009 resulted in lower material costs, and thus made the sectors unit price in general, better controlled. Besides, the fact that competition between market players was intensifying due to the saturating market and lower inflation rate also contributed to less escalating of unit prices in general.
COMPETITIVE LANDSCAPE
Tan Tan Food & Foodstuff Co successfully sustained its leading position in 2009, accounting for over 10% of sector value. The company was mainly present in nuts, which was certainly not the highest value category. However, Tan Tan successfully built up its position in nuts with a value share of 62%. Already
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with a very good reputation in the local market due to its long standing history, Tan Tan continued to gain share in 2009 as nuts continued to outgrow many other categories, such as extruded snacks and chips/crisps. One of the companies with fastest sales growth during the year was PepsiCo Inc, which posted over 41% growth rate in current value terms. The company has been present since 2006 with the family brand Poca, and positioned itself towards the mid-priced segment. PepsiCo was wise to put huge efforts into keeping its product prices stable for three consecutive years to support consumers through the economic crisis, and differentiate Poca from other two big competitors, Orion and Oishi. Since the end of 2008, PepsiCo stepped ahead in expanding its market coverage to new potential regions such as towns and smaller cities and cooperated with regional wholesalers to build up a strong distributing network. In general, the strong resources of a renowned international manufacturer, good business strategies and dynamic marketing activities helped PepsiCo Inc quickly gain the top position in chips/crisps. Sweet and savoury snacks in Vietnam is quite fragmented with participation of many small and medium manufacturers. Overall, domestic players took the bigger part of the total market share and continued to dominate the traditional categories such as fruit snacks, other sweet and savoury snacks and nuts. However, the competition between local and international manufacturers has quickly heated up. Since Vietnam holds great potential for this sector, foreign companies could not miss the opportunities to join in, starting with modern snacks like extruded snacks or chips/crisps. Take-over cases could not be avoided as in the case of Zich Zich and Zon Zon from An Lac Co Ltd losing share in extruded snack to newcomers PepsiCo and Orion. While local companies had experiences and deep understandings of local consumers taste, foreign players excelled in raising brand awareness and generating sales with their international reputation and strong marketing and PR activities. At the beginning of 2010, Kinh Do Corp conducted a nationwide marketing campaign for its newly launched Sachi Extreme Taste extruded snack. Given the increasingly competitive environment, this could be a wise move from Kinh Do to enhance its position in extruded snacks in particular, and in sweet and savoury snacks in general. Because the products target consumers are the young, active and dynamic consumers, the advertisements illustrated the products with playful images and emphasised its unique spicy flavours of chilli and wasabi. The promotion campaigns went out of the box in engaging with consumers and inviting them to make funny video clips featuring new Sachi products for the chance to win a Corby mobile phone and tickets to a party night. The unconventional marketing campaign promised success for Kinh Dos new Sachi products, and sparked off interesting counter activities from other big market players in the coming period.
PROSPECTS
Overall, it is expected that sweet and savoury snacks performance in Vietnam will be good given increasing consumer demand and improved living standards. People will consume all kinds of snacks and indulgence food in general. Due to the fact that per capita consumption for sweet and savoury snacks in Vietnam is still relatively low compared to neighbouring countries, the potential for market expansion in the near future is huge. Better economic condition will revive consumers confidence in spending which is another important factor to drive sales growth of this sector. During the forecast period, sweet and savoury snacks in Vietnam is predicted to post a CAGR of over 6% in constant value terms. Other sweet and savoury snack will grow at a slower rate compared to other categories due to the fact that market value is already very big and reaching maturity. Consumers, particularly the youth tend to shift their preference toward other modern snacks, such as extruded snacks and chips/crisps because of their enjoyable taste and dynamic advertising activities. The competition between key companies such as Kinh Do Corp and PepsiCo Inc will further cultivate development in the sector. Chips/crisps are expected to see the strongest growth in all categories with a CAGR of 11% in constant value terms over the forecast period. Chips/crisps, although still a fairly small category compared to extruded snacks and nuts, is increasing in popularity quickly due to its nice taste and modern image. Products in this category usually target urban, young and dynamic consumers, who like to indulge in snacks and treats. Moreover, the taste of these products is much more appealing to this target segment compared to traditional snacks such as fruits, nuts or beef jerky. In general, unit prices are expected to increase, however with growth rates varying across categories. Highly competitive categories such as crisps/chips and extruded snacks with participation of big
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international companies may experience higher price surges due to the additional marketing and advertising costs. Besides, the need to upgrade technology and the production system to introduce best quality products is another reason to explain the upward movement of unit prices over the forecast period. In the coming years, it may be more difficult for small and medium companies to compete against big players such as PepsiCo Inc, Liwayway Food Industry Co Ltd or Procter & Gamble Vietnam Ltd as these manufacturers are step by step building up their position, broadening their product portfolios as well as pushing vigorous advertising and promotions to attract consumers. The dominant position of domestic companies is more than ever threatened by the strong growth of international players.
CATEGORY DATA
Table 1 tonnes 2005 Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks
Source:
Sales of Sweet and Savoury Snacks by Category: Volume 2005-2010
2006 1,255.2 9,750.0 492.3 4,301.4 6,191.1 21,990.0
2007 1,437.2 10,820.0 571.0 4,912.7 6,841.1 24,582.1
2008 1,616.9 11,793.8 639.6 5,502.2 7,456.8 27,009.3
2009 1,810.9 12,796.3 713.1 5,997.4 7,904.3 29,221.9
2010 2,039.1 13,756.0 798.7 6,597.1 8,339.0 31,529.9
1,057.0 8,710.0 413.7 3,728.0 5,679.9 19,588.6
Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources
Table 2 VND billion
Sales of Sweet and Savoury Snacks by Category: Value 2005-2010
2005 Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks
Source:
2006 120.8 996.6 46.4 357.1 958.2 2,479.1
2007 144.9 1,205.9 57.0 442.8 1,054.0 2,904.7
2008 173.2 1,423.0 70.7 540.2 1,191.0 3,398.2
2009 204.4 1,636.4 87.4 648.3 1,322.1 3,898.5
2010 242.2 1,857.3 106.1 771.5 1,454.3 4,431.4
98.2 824.4 37.1 290.3 879.1 2,129.1
Table 3 % volume growth
Sales of Sweet and Savoury Snacks by Category: % Volume Growth 2005-2010
2009/10 Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels 12.6 7.5 12.0 10.0 -
2005-10 CAGR 14.0 9.6 14.1 12.1 -
2005/10 TOTAL 92.9 57.9 93.1 77.0 -
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Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks
Source:
5.5 7.9
8.0 10.0
46.8 61.0
Table 4
Sales of Sweet and Savoury Snacks by Category: % Value Growth 2005-2010
% current value growth 2009/10 Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks
Source:
2005-10 CAGR 19.8 17.6 23.4 21.6 10.6 15.8
2005/10 TOTAL 146.6 125.3 186.1 165.7 65.4 108.1
18.5 13.5 21.5 19.0 10.0 13.7
Table 5 % retail value rsp
Extruded Snacks by Type: % Value Breakdown 2005-2010
2005 Potato-based snacks Prawn & seafood crackers Rice Crackers Vegetable Crackers Others Total
Source:
2006 30.0 20.0 25.0 15.0 10.0 100.0
2007 28.0 20.0 27.0 16.0 9.0 100.0
2008 28.0 20.0 30.0 16.0 6.0 100.0
2009 27.0 21.0 30.0 16.5 5.5 100.0
2010 26.0 21.0 29.5 17.0 6.5 100.0
40.0 20.0 15.0 15.0 10.0 100.0
Table 6 % retail value rsp Company
Sweet and Savoury Snacks Company Shares 2005-2009
2005 8.5 5.4 10.3 5.3
2006 8.7 5.9 9.6 5.3
2007 9.2 6.6 8.5 4.9
2008 9.7 7.3 7.6 5.0
2009 10.3 8.2 7.6 5.0
Tan Tan Food & Foodstuff Co Liwayway Food Industry Co Ltd Tuyen Ky Co Ltd Special Aquatic Jointstock Co (SEASPIMEXVIETNAM) Triko Foods Co Kinh Do Corp Bien Hoa Confectionery Corp (Bibica) Ken Ken (Vietnam) Food Manufacturing Co Ltd Cholon Investment & Import-Export Co (CHOLIMEX) PepsiCo Inc Kim Phong Co
4.1 2.8 3.9 5.2 2.9
3.6 3.1 4.7 5.3 2.6
3.6 3.8 4.6 3.8 2.5
4.2 4.3 4.4 3.5 2.5
4.8 4.8 4.2 3.8 2.5
2.9
0.8 2.9
1.6 3.0
1.9 2.7
2.4 2.2
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Vinabico Confectionery JSC Vinamit JSC Haiha - Kotobuki JV Co Phong Hien Co Procter & Gamble Vietnam Ltd Trang An Confectionery Co Tecaworld Food Processing Joint Venture Co Orion Food Vina Co Ltd An Lac Co Ltd Tuong Lai Co Viet Hoa Co Tai Tai Co Zerky Co Orex Co Four Seasons (Vietnam) Co Ltd Nhat Anh trading Pt Enterprise Dong Nai Food Agricultural Product Processing & Import Export Co Lubico Biscuit Enterprise Chipsgood Vietnam Co Ltd Nha Be Import Export Co TM Vina Mit Ltd Co (Vinamit) Hanh Dung Co Ltd Vitafood - Viettan Co Ltd Kinh Do Food Processing & Construction Ltd Co Vinabico - Kotobuki JV Others Total
Source:
1.7 2.3 2.8 0.7 0.8 1.5
1.8 2.6 2.5 0.9 0.9 1.5
2.1 2.3 2.5 1.2 1.0 1.5
2.1 1.9 2.1 2.2 1.5 1.3 1.6
2.1 2.1 1.9 1.9 1.7 1.6 1.4
1.7 2.1 1.2 0.5 1.3 0.8 0.4 0.4 0.4
0.6 1.6 1.9 0.9 0.5 0.8 1.0 0.4 0.4 0.4
0.9 1.4 1.8 0.8 0.5 0.7 1.1 0.4 0.4 0.4
1.1 1.3 1.4 0.6 0.6 0.6 0.7 0.5 0.4 0.4
1.2 1.2 1.0 0.7 0.7 0.5 0.5 0.5 0.4 0.4
0.2 0.1 1.5 0.4 0.4 27.4 100.0
0.2 0.1 0.1 1.6 0.4 0.4 26.0 100.0
0.2 0.1 0.1 1.7 0.4 0.2 26.2 100.0
0.2 0.1 0.0 0.4 0.1 25.9 100.0
0.2 0.1 0.0 24.2 100.0
Table 7 % retail value rsp Brand Tan Tan Oishi Tuyen Ky New Choice Jelly Bibica Sachi Seaspimex
Sweet and Savoury Snacks Brand Shares 2006-2009
Company Tan Tan Food & Foodstuff Co Liwayway Food Industry Co Ltd Tuyen Ky Co Ltd Triko Foods Co Bien Hoa Confectionery Corp (Bibica) Kinh Do Corp Special Aquatic Jointstock Co (SEASPIMEXVIETNAM) Ken Ken (Vietnam) Food Manufacturing Co Ltd Cholon Investment & Import-Export Co (CHOLIMEX) PepsiCo Inc
2006 8.7 5.9 7.4 3.6 4.7 2.4 3.7
2007 9.2 6.6 6.5 3.6 4.6 3.3 3.4
2008 9.7 7.3 5.8 4.2 4.4 3.8 3.5
2009 10.3 8.2 5.8 4.8 4.2 4.2 3.6
Ken Ken Cholimex
4.5 2.6
3.1 2.5
2.7 2.5
2.9 2.5
Poca
0.8
1.6
1.9
2.4
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Kim Phong Vinabico Vinamit Bim Bim Phong Hien Pringles Teppy NikNak
Ostar Tuong Lai Zon Zon Viet Hoa Tai Tai Kinh Do Zerky Orex TenTen Jelly Tri ky 2 Donafood
Zich Zich Lubico Chipsgood Tecaworld
Nhabexim Vinamit Hanh Dung Jelly Pota-chi Sachi Vinabico-Kotobuki Others Total
Source:
Kim Phong Co Vinabico Confectionery JSC Vinamit JSC Haiha - Kotobuki JV Co Phong Hien Co Procter & Gamble Vietnam Ltd Trang An Confectionery Co Tecaworld Food Processing Joint Venture Co Orion Food Vina Co Ltd Tuong Lai Co An Lac Co Ltd Viet Hoa Co Tai Tai Co Kinh Do Corp Zerky Co Orex Co Four Seasons (Vietnam) Co Ltd Nhat Anh trading Pt Enterprise Dong Nai Food Agricultural Product Processing & Import Export Co An Lac Co Ltd Lubico Biscuit Enterprise Chipsgood Vietnam Co Ltd Tecaworld Food Processing Joint Venture Co Nha Be Import Export Co TM Vina Mit Ltd Co (Vinamit) Hanh Dung Co Ltd Vitafood - Viettan Co Ltd Kinh Do Food Processing & Construction Ltd Co Vinabico - Kotobuki JV
2.9 1.8 2.6 2.5 0.9 0.9 1.3
3.0 2.1 2.3 2.5 1.2 1.0 1.3
2.7 2.1 1.9 2.1 2.2 1.5 1.3 1.5
2.2 2.1 2.1 1.9 1.9 1.7 1.6 1.3
0.6 1.9 1.1 0.9 0.5 0.7 0.8 1.0 0.4 0.4 0.4
0.9 1.8 1.0 0.8 0.5 0.5 0.7 1.1 0.4 0.4 0.4
1.1 1.4 0.9 0.6 0.6 0.5 0.6 0.7 0.5 0.4 0.4
1.2 1.0 0.8 0.7 0.7 0.6 0.5 0.5 0.5 0.4 0.4
0.5 0.2 0.1 0.2
0.4 0.2 0.1 0.2
0.4 0.2 0.1 0.1
0.3 0.2 0.1 0.1
0.1 1.6 0.4 0.4 30.6 100.0
0.1 1.7 0.4 0.2 30.3 100.0
0.0 0.4 0.1 30.0 100.0
0.0 28.4 100.0
Table 8 % retail value rsp
Sales of Sweet and Savoury Snacks by Distribution Format: % Analysis 2005-2010
2005 Store-Based Retailing Grocery Retailers Supermarkets/Hypermarkets Discounters Small Grocery Retailers Convenience Stores Independent Small Grocers Forecourt Retailers Other Grocery Retailers Non-Grocery Retailers Health and Beauty Retailers Other Non-Grocery 100.0 100.0 17.7 52.1 0.1 52.0 30.2 -
2006 100.0 100.0 18.0 52.5 2.5 50.0 29.5 -
2007 100.0 100.0 18.3 52.7 3.5 49.2 29.0 -
2008 100.0 100.0 18.5 53.5 5.0 48.5 28.0 -
2009 100.0 100.0 19.0 54.0 5.5 48.5 27.0 -
2010 100.0 100.0 19.5 54.5 6.0 48.5 26.0 -
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Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total
Source:
100.0
100.0
100.0
100.0
100.0
100.0
Table 9 tonnes
Forecast Sales of Sweet and Savoury Snacks by Category: Volume 2010-2015
Source:
2011 2,263.3 14,718.9 878.6 7,091.9 8,755.9 33,708.7
2012 2,501.0 15,675.6 957.6 7,588.4 9,150.0 35,872.6
2013 2,751.1 16,616.2 1,034.2 8,081.6 9,516.0 37,999.1
2014 3,012.5 17,447.0 1,106.6 8,566.5 9,849.0 39,981.6
2015 3,268.5 18,144.9 1,162.0 9,037.6 10,144.5 41,757.5
2,039.1 13,756.0 798.7 6,597.1 8,339.0 31,529.9
Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources
Table 10 VND billion
Forecast Sales of Sweet and Savoury Snacks by Category: Value 2010-2015
Source:
2011 270.1 1,996.6 117.3 844.7 1,519.7 4,748.4
2012 299.8 2,136.4 128.4 916.6 1,586.6 5,067.7
2013 331.2 2,275.2 139.3 985.3 1,654.8 5,385.9
2014 364.4 2,411.7 149.8 1,049.3 1,724.3 5,699.5
2015 399.0 2,544.4 159.5 1,112.3 1,793.3 6,008.4
242.2 1,857.3 106.1 771.5 1,454.3 4,431.4
Table 11 % volume growth
Forecast Sales of Sweet and Savoury Snacks by Category: % Volume Growth 2010-2015
2014/15 Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks 8.5 4.0 5.0 5.5 3.0 4.4
2010-15 CAGR 9.9 5.7 7.8 6.5 4.0 5.8
2010/15 TOTAL 60.3 31.9 45.5 37.0 21.7 32.4
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Source:
Table 12
Forecast Sales of Sweet and Savoury Snacks by Category: % Value Growth 2010-2015
% constant value growth 2010-15 CAGR Chips/Crisps Extruded Snacks Fruit Snacks Nuts Popcorn Pretzels Tortilla/Corn Chips Other Sweet and Savoury Snacks Sweet and Savoury Snacks
Source:
2010/15 TOTAL 64.7 37.0 50.3 44.2 23.3 35.6
10.5 6.5 8.5 7.6 4.3 6.3
Summary 1 Product type Jelly
Other Sweet and Savoury Snacks: Product Types
Meat/Seafood/Poultry Jerky, Scratchings and Dried snacks Seed snacks

Source: Trade press, Company research, Store checks, Trade interviews, Euromonitor International estimates
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Euromonitor International : Country Sector Briefing November 2010

List of Contents and Tables