BMI's Executive Summary

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The last quarter of 2007 saw foreign direct investment continue to flood into Vietnam's food and beverage sectors; notable events from the three-month period including South Korean giant Lotte Confectionery's acquisition of a 30% stake in local snack food producer Bibica and Japanese conglomerate Sojitz Corporation's purchase of a 25% interest in food and drink importer and distributor Huong Thuy Corporation. These investments have been backed up by sustained inflows into the country's organised grocery retail and alcoholic drinks industries.

Much of the motivation for this investment is obvious; BMI is forecasting sales growth in Vietnam's mass grocery retail sector of a phenomenal 121.8% to 2012, while value sales in the alcoholic drinks industry are forecast to increase by a healthy 46.9% over our five-year forecast period. However, while certain consumer goods industries are experiencing exceptional growth, this is not being felt across the board. Overall food consumption in Vietnam is set to increase by just 13.5% to 2012 – a very low rate for such a high-growth economy – and annual per capita food consumption is set to stand at just US$61.52 in 2008, a consequence of Vietnam's poorer rural communities which reduce the impact of higher-spending urban groups.

As a result of this still acute poverty in parts of the country – not to mention Vietnam's under-developed infrastructure and a still fairly regulated operating environment in spite of the imminence of WTO accession – Vietnam falls in just 12th place out of 14 Asia Pacific markets analysed in BMI's new Food and Drink Business Environment Ratings. The country's position reflects both the limits and the risks that must be considered when investing in Vietnam's food and beverage market.

However, in spite of these risks investors continue to flock to Vietnam, with many viewing the country as one of the few viable, truly explosive long-term growth opportunities still left in what is a fast-crowding global market. With less risky emerging markets now looking fairly mature, particularly to latecomers, expansionary multinationals are increasingly willing to take greater risks in search of long-term opportunities.

Contents

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Chapter 1 – Business Environment

Retail Business Environment Rankings

Table: Asia Pacific Business Environment Rankings

SWOT Analysis

Vietnam Food & Drink Industry SWOT

Macroeconomic Analysis

Table: Vietnam - Economic Activity

Chapter 2 – Retail

Regional Overview – Private Labelling in Asia Pacific

Table: Assessment Of Private Label Qualities – By Region

Table: Leading Private Label Categories By Market Share & Annual Growth Rate

Industry Forecast Scenario

Table: Vietnam MGR Indicators Value Sales by Format – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Structure of Vietnam's Mass Grocery Retail Market by Number of Outlets

Table: Structure of Vietnam's Mass Grocery Retail Market – Sales Value by Format (US$mn)

Table: Average Sales per Outlet by Format (US$mn) - 2005

Chapter 3 – Food & Drink

Regional Overview – Dairy in Asia

Table: Per-Capita Dairy Consumption (kg) & Consumption Growth In Selected Asian Markets

Table: Milk Production (000 tonnes) & Production Growth In Selected Asian Markets

Table: Dairy Production (000 tonnes) Forecasts In Selected Asian Markets

Industry Forecast Scenario

Table: Food Consumption Indicators – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Table: Vietnam Agricultural Sub-Sector Production – Historical Data

Chapter 4 – Tobacco

Industry Forecast Scenario

Table: Cigarette Value/Volume Sales – Historical Data & Forecasts

Industry Developments

Company Developments

Market Overview

Chapter 5 – Competitive Landscape

Key Players

Table: Key Players in Vietnam's Mass Grocery Retail Sector – 2005

Table: Key Players in Vietnam's Food & Drink Sector – 2005

Regional Company Case Studies

Key Players

Table: Key Players In Australia’s MGR Sector – 2005

Table: Key Players In Australia’s Food & Drink Sector – 2005

Asia Pacific Regional Company Case Studies

AEON in Asia Pacific

Table: AEON Five-year Financials (JPYmn)

Table: Speciality Store Network (as at February 20 2006)

Coca-Cola Amatil in Asia Pacific

Table: Coca-Cola Amatil Five-Year Financials

Table: Coca-Cola Amatil Market Share By Country And By Beverage Sub-sector – As At Year-End 2005

Table: SPC Ardmona Market Share By Product Category

Heineken In Asia Pacific

Table: Heineken – Brands Distributed In The Asia Pacific Region

Table: Contribution Of Asia Pacific Region To Heineken 2005 Financial Performance

Kraft In Asia Pacific

Table: 2005 Kraft Global Facts

Company Analysis

Groupe Bourbon

Saigon Co-op

Metro Cash & Carry Vietnam

Vietnam Dairy Products Corporation (Vinamilk)

San Miguel Purefoods Vietnam Co Ltd

BMI Forecast Modelling

How We Generate Our Industry Forecasts

Retail Industry

Sources

Competitive Landscape for Asia Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of Asain Food Sources

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BMI's Asian Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: