Despite the slowdown in investments on the back of the global financial crisis, the Vietnamese drinkssector continues to attract investments from international players. As discussed in BMI's recentlypublished Vietnam Food & Drink Report for Q210, a number of major global brewers recently announcedfresh investments into the country's beer sector, as competition continues to heat up.In November 2009 Danish brewing giant Carlsberg announced plans to acquire the remaining 50% stakein Central Vietnam's Hue Brewery as part of its objective to strengthen its position in the Vietnamesebeer market. Carlsberg had originally purchased a 50% stake in the Vietnamese brewery in 1994 througha preliminary agreement with Hue People's Hue Committee. This most recent acquisition will provideCarlsberg with a stronger presence in Central Vietnam where Hue is the market leader through its Hudabrand. As Vietnam's beer market grows, in line with the country's rapid economic development, anationwide presence is becoming an essential requirement for the leading players. Demand is no longercoming out of the two major urban centres of Hanoi and Ho Chi Minh City, as incomes and tourismlevels are rising in city centres across the country. If a brewer is to fully exploit the country's attractivebeer market, it must have access to more than two or three profitable cities, hence this move by Carlsberg.This was followed by the announcement in late December by Japanese brewer Sapporo that it hadacquired a 65% stake in Kronenbourg Vietnam, the Carlsberg and Vietnam National TobaccoCorporation (Vinataba) 50:50 joint venture (JV). The US$25.4mn deal will see Sapporo take fullownership of Carlsberg's stake and 15% of Vinataba's interest. Sapporo has already confirmed that theconstruction of a new brewery will be among its first priorities upon completing the acquisition. Thisinvestment in capacity expansion will be important if Sapporo is to compete effectively in Vietnam. Thelocal beer market is very competitive, with market leaders already established in Saigon Beer Alcoholand Beverage Corporation (Sabeco) and Hanoi Beer Alcohol and Beverage Corporation (Habeco),while several powerful multinationals, including Heineken's JV Asia Pacific Breweries, as well asCarlsberg, have also already emerged as major players.Bearing in mind the competitive business environment, Sapporo has been moderate in its market shareaims, with the new JV targeting just 3% of the market by 2019, and yet even this will require significantfinancial support given the sums its rivals are also pumping into local growth. Given the vast potential ofthe local market, it is easy to see why. Vietnam is considered to be one the world's highest-potential beermarkets, with growth fuelled by economic expansion and a growing tourism sector. With competition setto increase further as the market continues to open up to foreign investors, those brewers already presentin the market can be expected to ramp up investment levels in order to secure a strong foothold.

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Vietnam Food and Drink Report Q2 2010
Published on February 2010
Report Summary
Despite the slowdown in investments on the back of the global financial crisis, the Vietnamese drinks
sector continues to attract investments from international players. As discussed in BMI's recently
published Vietnam Food & Drink Report for Q210, a number of major global brewers recently announced
fresh investments into the country's beer sector, as competition continues to heat up.
In November 2009 Danish brewing giant Carlsberg announced plans to acquire the remaining 50% stake
in Central Vietnam's Hue Brewery as part of its objective to strengthen its position in the Vietnamese
beer market. Carlsberg had originally purchased a 50% stake in the Vietnamese brewery in 1994 through
a preliminary agreement with Hue People's Hue Committee. This most recent acquisition will provide
Carlsberg with a stronger presence in Central Vietnam where Hue is the market leader through its Huda
brand. As Vietnam's beer market grows, in line with the country's rapid economic development, a
nationwide presence is becoming an essential requirement for the leading players. Demand is no longer
coming out of the two major urban centres of Hanoi and Ho Chi Minh City, as incomes and tourism
levels are rising in city centres across the country. If a brewer is to fully exploit the country's attractive
beer market, it must have access to more than two or three profitable cities, hence this move by Carlsberg.
This was followed by the announcement in late December by Japanese brewer Sapporo that it had
acquired a 65% stake in Kronenbourg Vietnam, the Carlsberg and Vietnam National Tobacco
Corporation (Vinataba) 50:50 joint venture (JV). The US$25.4mn deal will see Sapporo take full
ownership of Carlsberg's stake and 15% of Vinataba's interest. Sapporo has already confirmed that the
construction of a new brewery will be among its first priorities upon completing the acquisition. This
investment in capacity expansion will be important if Sapporo is to compete effectively in Vietnam. The
local beer market is very competitive, with market leaders already established in Saigon Beer Alcohol
and Beverage Corporation (Sabeco) and Hanoi Beer Alcohol and Beverage Corporation (Habeco),
while several powerful multinationals, including Heineken's JV Asia Pacific Breweries, as well as
Carlsberg, have also already emerged as major players.
Bearing in mind the competitive business environment, Sapporo has been moderate in its market share
aims, with the new JV targeting just 3% of the market by 2019, and yet even this will require significant
financial support given the sums its rivals are also pumping into local growth. Given the vast potential of
the local market, it is easy to see why. Vietnam is considered to be one the world's highest-potential beer
markets, with growth fuelled by economic expansion and a growing tourism sector. With competition set
to increase further as the market continues to open up to foreign investors, those brewers already present
in the market can be expected to ramp up investment levels in order to secure a strong foothold.
Table of Content
Executive Summary ..5
SWOT Analysis .....6
Vietnam Food Industry SWOT ....... 6
Vietnam Drink Industry SWOT ...... 7
Vietnam Food and Drink Report Q2 2010 Page 1/5

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Vietnam Mass Grocery Retail Industry SWOT ........... 8
Business Environment ....................................9
BMI's Core Global Industry Views ..... 9
Table: BMI's Core Views For The Food & Drink Industry ................................... 9
Asia Pacific Business Environment Ratings ...... 10
Table: Asia Pacific Food & Drink Business Environment Ratings Q2 2010 ......... 12
Vietnam Food & Drink Business Environment Rating .. 13
Macroeconomic Outlook ................................14
Table: Vietnam ' Economic Activity ............ 16
Food .........17
Industry Forecast Scenario ............... 17
Food Consumption 17
Table: Food Consumption Indicators ' Historical Data & Forecasts .................. 18
Canned Food ........ 19
Confectionery ........ 19
Table: Value/Volume Sales of Selected Food Subsectors - Historical Data & Forecasts ............ 21
Trade .................... 22
Vietnam Food & Drink Trade Indicators ' Historical Data & Forecasts ............. 23
Industry Developments ...................... 24
Market Overview ....... 27
Agriculture ............ 27
Food Processing ... 28
Food Consumption 28
Drink ........29
Industry Forecast Scenario ............... 29
Alcoholic Drinks ... 29
Alcoholic Drinks Indicators ' Historical Data & Forecasts ................................ 30
Coffee .................... 30
Hot Drink Value Sales ' Historical Data & Forecasts . 31
Soft Drinks ............ 31
Soft Drinks Indicators ' Historical Data & Forecasts .. 32
Industry Developments ...................... 33
Market Overview ....... 37
Soft Drinks ............ 37
Alcoholic Drinks ... 37
Mass Grocery Retail 39
Industry Forecast Scenario ............... 39
Table: Vietnam MGR Indicators ' Value Sales by Format ' Historical Data & Forecasts ......... 41
Grocery Retail Sales by Format - Historical Data & Forecasts (%) .................... 41
Industry Developments ...................... 42
Market Overview ....... 44
Structure of Vietnam's Mass Grocery Retail Market by Estimated Number of Outlets ................ 46
Table: Structure of Vietnam's Mass Grocery Retail Market ' Sales Value by Format (US$mn) . 46
Table: Structure of Vietnam's Mass Grocery Retail Market ' Sales Value by Format (VNDbn) . 46
Average Sales per Outlet by Format ' 2008 47
Competitive Landscape .................................48
Table: Key Players in Vietnam's Food & Drink Sector ' 2008 ............................ 48
Table: Key Players in Vietnam's Mass Grocery Retail Sector ' 2008 .................. 49
Company Analysis ...... 50
Food ..................... 50
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Masan Food .......... 50
Vietnam Dairy Products Joint Stock Company (Vinamilk) .................................. 51
San Miguel Purefoods Vietnam Co Ltd ........ 52
Drink ..................... 53
Saigon Beer Alcohol and Beverage Corporation (Sabeco) .................................. 53
Carlsberg .............. 54
Mass Grocery Retail .................... 55
Metro Cash & Carry .................... 55
Saigon Co-op ........ 56
Appendix .57
Country Snapshot: Vietnam Demographic Data ........... 57
Section 1: Population ................... 57
Table: Demographic Indicators, 2005-2030 57
Table: Rural/Urban Breakdown, 2005-2030 ........... 58
Section 2: Education and Healthcare .......... 58
Table: Education, 2002-2005 ...... 58
Table: Vital Statistics, 2005-2030 58
Section 3: Labour Market and Spending Power ....... 59
Table: Employment Indicators, 1999-2004 .. 59
Table: Consumer Expenditure, 2000-2012 (US$) .... 59
BMI Food & Drink Methodology .....................60
Food & Drink Business Environment Ratings .. 60
Ratings Methodology . 60
Ratings Overview ....... 60
Ratings System ...... 60
Indicators .............. 60
Limits Of Potential Returns .......... 61
Risks To Realisation Of Potential Returns ... 62
Weighting .............. 63
Weighting .............. 63
BMI Food & Drink Industry Glossary .............. 64
Food & Drink ....... 64
Mass Grocery Retail .................... 64
BMI Food & Drink Forecasting & Sourcing .... 66
How We Generate Our Industry Forecasts .. 66
Sourcing ................ 67
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