Noodles in vietnam mar 2013

NOODLES IN VIETNAM
Euromonitor International
February 2013

N O O D L E S I N V I E T N A M P a s s p o r t I
© E u r o m o n i t o r I n t e r n a t i o n a l
LIST OF CONTENTS AND TABLES
Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape................................................................................................................ 2
Prospects ..................................................................................................................................... 3
Category Data .............................................................................................................................. 3
Table 1 Sales of Noodles by Category: Volume 2007-2012...................................... 3
Table 2 Sales of Noodles by Category: Value 2007-2012......................................... 4
Table 3 Sales of Noodles by Category: % Volume Growth 2007-2012..................... 4
Table 4 Sales of Noodles by Category: % Value Growth 2007-2012........................ 4
Table 5 Leading Instant Noodle Flavours 2007-2012................................................ 5
Table 6 Noodles Company Shares 2008-2012 ......................................................... 5
Table 7 Noodles Brand Shares 2009-2012 ............................................................... 5
Table 8 Sales of Noodles by Distribution Format: % Analysis 2007-2012................. 6
Table 9 Forecast Sales of Noodles by Category: Volume 2012-2017....................... 7
Table 10 Forecast Sales of Noodles by Category: Value 2012-2017.......................... 7
Table 11 Forecast Sales of Noodles by Category: % Volume Growth 2012-
2017............................................................................................................. 7
Table 12 Forecast Sales of Noodles by Category: % Value Growth 2012-2017 ......... 8

N O O D L E S I N V I E T N A M P a s s p o r t 1
NOODLES IN VIETNAM
HEADLINES
 Noodles in Vietnam to experience current value growth of 17% in 2012 reaching retail value
sales of VND20.1 trillion
 With increasingly busier lifestyles, noodles still has much room to expand and maintain its
important position as an alternative to other kinds of staple foods
 In terms of retail volume, cups/bowl instant noodles to score the highest growth rate of 9% in
2012
 Unit price of noodles continues to increase in 2012 due to inflation and rising price of raw
material
 With a 52% value share expected in 2012, Acecook Vietnam JSC remains the top player in
noodles
 Noodles in Vietnam is expected to see a constant value CAGR of 6% over the forecast period
TRENDS
 Increasingly busier lifestyles encourage more people to consume instant noodles as they are
easy to prepare and have a long shelf life. Specifically, instant noodles serves as the least
expensive and most convenient alternative to rice, bread and other food, because they can be
stored for a long time once bought. Furthermore, while a larger amount of people live in small
apartments, often without a kitchen, instant noodles are a good choice because they are easy
to store in a cupboard and save a trip to the shops.
 In 2011, noodles recorded slightly slower value and volume growth rates of 17% and 8%,
respectively. Despite its slower value and volume growth, noodles was still considered to hold
potential by both international and local manufacturers. Demand for noodles was attributable
to local companies’ greater investment and efforts in marketing communication and their
product diversification strategies as well. For instance, by running effective TVCs, pushing
store displays and pricing the product competitively, the new brand Kokomi from Masan Food
Corp, successfully penetrated the low-income segment with great acceptance from
consumers.
 Serving the purpose of convenient usage, cups/bowl instant noodles will continue to see the
fastest growth rate in term of retail volume. In 2011, cups/bowl instant noodles registered
volume growth of 9%. This is due to the fact that consumers’ purchasing power increased and
daily routines are more hectic, which is evident in the increasing number of city dwellers.
Cups/bowl instant noodles are a firm favourite with office workers and tourists as they are
easily carried around or consumed without any further need for containers.
 In 2012, the unit price of noodles will increase by 9% compared to 2011. It was mainly
because of the inflation rate and an increase in the price of raw materials. As the category is
highly competitive, the increased unit price does not come from the manufacturers’ intention
to increase profits. Instead, they want to keep their prices as competitive as possible.
 Regarding noodles flavours, seafood is most popular and a typical example is the sour and
spicy shrimp flavour of Hao Hao, manufactured by Acecook Vietnam JSC. Beef and Tom Yam
flavours are ranked second and third. While trying hard to keep the costs as low as possible,
local manufacturers put a great deal of effort into adding more ingredients, such as meat

pieces to the soup sachet, with a view to upgrading the quality of instant noodles and make
them into more of a meal.
 By the end of 2011, independent small grocers still accounted for 73% of total sales value of
noodles, despite the rapid development of hypermarket and supermarket chains. However,
the immigration of people from rural areas and the surge of the younger generation make
supermarket and hypermarkets more and more popular for this category due to their wide
offer and availability.
COMPETITIVE LANDSCAPE
 As one of the first instant noodles manufacturers in Vietnam, Acecook Vietnam JSC
maintained its leading position in 2011 and 2012. This is thanks to its incessant efforts in
strengthening the existing brands, namely Hao Hao and Hao 100, which are already popular
among Vietnamese consumers. With continuous product line extensions with an emphasis on
flavours and multibrand strategies, Acecook Vietnam can meet the various demands of
different consumer segments.
 In 2011, Masan Food Corp recorded the biggest increase in value sales thanks to the
company’s focus on branding and market penetration strategies. Non-stop marketing activities
for the existing premium brand, Omachi as well as for the new brand, Kokomi play a crucial
role in enhancing consumers’ awareness and preference, which in turn drove retail sales. The
company also targets the low income segment with a very low introduction price, for example,
VND3,000 per Kokomi pack.
 While Masan gained success with tailoring its marketing strategies for each product, Asia
Food Industry Co Ltd was popular for its social responsibility activities. For example, the
company delivered the message of helping underprivileged children. When consumers buy
each packet of Gau Do instant noodles, the company will donate VND10 to a fund for
underprivileged children.
 With better consumer knowledge and brand awareness, local manufacturers still hold the
majority share of sales, leaving approximately 6% for foreign instant noodles manufacturers.
International players usually focused more on the quality of the food and rely mainly on
modern trade channels. Few marketing activities are exhibited by these foreign players.
 Kokomi manufactured by Masan Food Corp serves as a successful case of new product
development, as the brand targets low-income consumers with the right market penetration
pricing strategies. At the same time, its message of ‘Soi Mi Dai’ (Chewy Strand of Noodle)
helps to draw customers’ awareness and encourage the purchase decision.
 Inarguably, Vietnam’s TVC television channel is the most used communication channel as
instant noodles generally serve the mass market. Nevertheless, the players in this market are
fighting for display space in each grocery store because they believe in the ‘first moment of
truth’, which refers to the instant the consumers interact with a brand for the first time. The
interaction at that time is instantaneous, decisive and can be inflective for the brand.
 Under the current Vietnamese stagnant economy, economy brands seem to cater for the
market better than the premium brands do. Kokomi, with the cheap price message, is a typical
example. Nonetheless, as consumers’ living standards are upgraded, premium brands stand
a very good chance of growing, such as Omachi, Mi De Nhat, Mi Cung Dinh, etc. Foreign
brands which have better quality instant noodles are increasingly popular, especially in the
modern trade channels.

PROSPECTS
 Higher living standards mean that consumers are more willing to buy instant noodles with
higher quality. Premium brands with truly enhanced quality would be easily accepted in the
market as consumers demand products which taste better and have more nutritional value.
 Over the forecast period, noodles is expected to see constant value and volume CAGRs of
6% and 5%, respectively. The forecast period volume CAGR is slower than the review period
volume CAGR. This is due to increasing market saturation and health awareness in eating
habits. There are already many brands dominating the market and the annual growth rate
over the forecast period, consequently, would certainly not be as promising as before, unless
there is a breakthrough or innovation in this product category. Specifically, manufacturers’
efforts to upgrade the nutritional value of instant noodles in the years to come may act as a
brake to the diminishing growth rate.
 Cups/bowl instant noodles is expected to produce the best performance among the noodle
categories. Unnecessary high prices is the main factor preventing the growth of this category.
However, as disposable income is increasing annually, price would no longer be a problem
because usage convenience would be a bigger concern for consumers. Moreover, a higher
number of Vietnamese go picnicking or travel at weekends, which further supports the
consumption of cups/bowl instant noodles.
 As previously mentioned, instant noodles with better quality and ingredients are inarguably
the future trend. In order to make it happen, more investment in research and development
activities and better quality raw materials would add up to a higher unit price level. Therefore,
it is expected that the unit price level will increase gradually over the forecast period.
 Independent small grocers will continue to serve as the main distribution channel over the
forecast period, as a larger proportion of the Vietnamese population lives in rural areas
without the presence of modern trade distribution channels. Conversely, in big cities or urban
areas, supermarkets or hypermarkets are preferred as consumers can buy many products at
one time and at the same place for a better price compared to that of grocers.
 Apart from the instant noodles manufacturers’ exploitation of health issues in communication
materials, many articles have raised their voice about the health problems related to eating
this kind of food. Hence, companies will probably not just compete on price, but also in terms
of product quality and new innovation. Even higher investment in R&D will be exhibited over
the forecast period. Also, creative branding strategies will help the companies to differentiate
themselves from others. Gau Do chose a very different but successful brand strategy during
the 2011 and 2012 period. Products targeting a specific niche market are also expected
during the forecast period.
 Over the forecast period, products with added nutrition value, such as DHA, vitamins, or
omega and removed unhealthy substances, such as trans-fat, oil or salt, are expected to be
present in the market, which could educate customers about a new way of consuming instant
noodles. Also, the ‘one size fits all’ period may have come to an end, as customised product
offerings with extensive marketing support are expected to take up the market share of the
brands serving the mass market. Omachi and Kokomi have clearly succeeded in targeting the
predefined customer segment with the right approaches.
CATEGORY DATA
Table 1 Sales of Noodles by Category: Volume 2007-2012
'000 tonnes

2007 2008 2009 2010 2011 2012
Chilled Noodles - - - - - -
Frozen Noodles - - - - - -
Instant Noodles 274.2 293.0 321.3 345.1 372.8 400.9
- Cups/Bowl Instant 11.2 12.6 13.8 15.1 16.4 17.8
Noodles
- Pouch Instant Noodles 263.0 280.4 307.5 330.0 356.4 383.1
Plain Noodles 1.8 1.9 2.0 2.2 2.3 2.4
Snack Noodles - - - - - -
Noodles 276.0 294.9 323.4 347.2 375.1 403.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2 Sales of Noodles by Category: Value 2007-2012
VND billion
2007 2008 2009 2010 2011 2012
Instant Noodles 8,601.1 10,154.2 12,169.1 14,383.8 17,058.3 20,028.3
- Cups/Bowl Instant 637.4 796.8 940.2 1,128.3 1,365.2 1,667.3
Noodles
- Pouch Instant Noodles 7,963.7 9,357.4 11,228.8 13,255.5 15,693.1 18,361.0
Plain Noodles 29.4 34.0 38.7 43.8 50.0 58.6
Noodles 8,630.6 10,188.1 12,207.8 14,427.5 17,108.4 20,086.9
Table 3 Sales of Noodles by Category: % Volume Growth 2007-2012
% volume growth
2011/12 2007-12 CAGR 2007/12 Total
Chilled Noodles - - -
Frozen Noodles - - -
Instant Noodles 7.5 7.9 46.2
- Cups/Bowl Instant Noodles 8.5 9.7 58.5
- Pouch Instant Noodles 7.5 7.8 45.7
Plain Noodles 4.0 5.5 30.8
Snack Noodles - - -
Noodles 7.5 7.9 46.1
Table 4 Sales of Noodles by Category: % Value Growth 2007-2012
% current value growth
2011/12 2007-12 CAGR 2007/12 Total

Snack Noodles - - -
Noodles 17.4 18.4 132.7
Table 5 Leading Instant Noodle Flavours 2007-2012
ranking
2007 2008 2009 2010 2011 2012
Seafood 2 1 1 1 1 1
Beef 1 3 2 2 2 2
Tom Yam 4 4 4 3 3 3
Chicken 3 2 3 4 4 4
Pork 5 5 5 5 5 5
Table 6 Noodles Company Shares 2008-2012
% retail value rsp
Company 2008 2009 2010 2011 2012
Acecook Vietnam JSC 52.7 51.0 50.8 50.5 51.5
Masan Food Corp 1.6 10.0 11.8 14.2 16.5
Asia Food Industry Co Ltd 13.4 12.2 12.1 11.8 12.1
VIFON - Vietnam Food 7.5 6.0 5.5 5.4 5.4
Industries Joint Stock Co
Saigon Vewong Joint 4.9 4.9 4.9 4.9 5.1
Venture Co
Colusa Miliket 4.2 3.6 3.5 3.4 3.3
Foodstuff JSC (COMIFOOD)
Thien Huong Food Co 4.6 3.6 3.2 2.9 2.6
Uni-President Vietnam 1.2 - - - -
Co Ltd
Miliket Food & - - - - -
Foodstuffs Enterprise
Colusa Food Processing - - - - -
Enterprise
Acecook Vietnam Co Ltd - - - - -
Others 9.9 8.7 8.2 6.9 3.5
Total 100.0 100.0 100.0 100.0 100.0
Table 7 Noodles Brand Shares 2009-2012
% retail value rsp
Brand Company 2009 2010 2011 2012
Hao Hao Acecook Vietnam JSC 17.9 18.2 18.5 19.8
Vina Acecook Acecook Vietnam JSC 21.1 20.7 20.2 19.4

Hao 100 Acecook Vietnam JSC 10.0 9.8 9.6 10.1
Gau Do Asia Food Industry Co Ltd 8.4 8.5 8.5 9.3
Omachi Masan Food Corp 2.9 5.2 6.4 8.0
Tien Vua Masan Food Corp 7.1 5.6 5.5 5.7
A-One Saigon Vewong Joint 4.9 4.9 4.9 5.1
Venture Co
Hello Asia Food Industry Co Ltd 3.8 3.5 3.2 2.8
Colusa Colusa Miliket 3.1 2.9 2.8 2.6
Vi Huong Thien Huong Food Co 3.6 3.2 2.9 2.6
Tao Quan Acecook Vietnam JSC 2.1 2.2 2.2 2.2
Ngon Ngon VIFON - Vietnam Food 2.0 1.8 1.8 1.9
Kokomi Masan Food Corp - - 1.4 1.9
Tu Quy VIFON - Vietnam Food 1.4 1.3 1.3 1.3
Oh Ngon Masan Food Corp - 0.9 0.9 0.9
Vifon VIFON - Vietnam Food 0.9 0.9 0.9 0.9
Miliket Colusa Miliket 0.5 0.6 0.6 0.6
Hao 100 Acecook Vietnam Co Ltd - - - -
Hao Hao Acecook Vietnam Co Ltd - - - -
Vina Acecook Acecook Vietnam Co Ltd - - - -
Colusa Colusa Food Processing - - - -
Enterprise
Miliket Colusa Food Processing - - - -
Enterprise
Chin-Su Masan Food Corp - - - -
Miliket Miliket Food & - - - -
Foodstuffs Enterprise
Vua Bep Uni-President Vietnam - - - -
Co Ltd
Others 10.3 9.7 8.4 4.8
Total 100.0 100.0 100.0 100.0
Table 8 Sales of Noodles by Distribution Format: % Analysis 2007-2012
% retail value rsp
2007 2008 2009 2010 2011 2012
Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0
- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0
-- Supermarkets 1.2 2.5 3.9 6.4 6.8 7.6
-- Hypermarkets 0.3 0.7 1.3 2.5 3.2 4.3
-- Discounters - - - - - -
-- Small Grocery 81.9 80.2 78.4 75.0 75.5 72.9
Retailers
--- Convenience Stores 0.8 0.8 0.9 0.5 0.2 0.0
--- Independent Small 81.1 79.4 77.6 74.5 75.3 72.8
Grocers
--- Forecourt Retailers - - - - - -
-- Other Grocery 16.5 16.6 16.4 16.1 14.5 15.3
Retailers
- Non-Grocery Retailers 0.0 0.0 0.0 0.0 0.0 0.0
-- Health and Beauty - - - - - -
Retailers

-- Other Non-Grocery - - - - - -
Retailers
Non-Store Retailing - - - - - -
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing - - - - - -
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 9 Forecast Sales of Noodles by Category: Volume 2012-2017
'000 tonnes
2012 2013 2014 2015 2016 2017
Instant Noodles 400.9 429.2 455.4 478.6 498.5 514.2
- Cups/Bowl Instant 17.8 19.3 20.8 22.4 23.9 25.5
Noodles
- Pouch Instant Noodles 383.1 409.9 434.5 456.3 474.5 488.8
Plain Noodles 2.4 2.4 2.5 2.6 2.6 2.7
Noodles 403.3 431.7 457.9 481.2 501.1 516.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 10 Forecast Sales of Noodles by Category: Value 2012-2017
VND billion
2012 2013 2014 2015 2016 2017
Instant Noodles 20,028.3 21,685.6 23,212.6 24,582.2 25,719.4 26,629.0
- Cups/Bowl Instant 1,667.3 1,800.7 1,935.7 2,071.2 2,195.5 2,305.3
Noodles
- Pouch Instant Noodles 18,361.0 19,884.9 21,276.9 22,510.9 23,523.9 24,323.8
Plain Noodles 58.6 60.9 63.1 65.0 66.6 67.9
Noodles 20,086.9 21,746.6 23,275.7 24,647.1 25,786.0 26,697.0
trade sources
Table 11 Forecast Sales of Noodles by Category: % Volume Growth 2012-2017
% volume growth
2016/17 2012-17 CAGR 2012/17 Total

Snack Noodles - - -
Noodles 3.2 5.1 28.2
trade sources
Table 12 Forecast Sales of Noodles by Category: % Value Growth 2012-2017
% constant value growth
2012-17 CAGR 2012/17 TOTAL
Chilled Noodles - -
Frozen Noodles - -
Instant Noodles 5.9 33.0
- Cups/Bowl Instant Noodles 6.7 38.3
- Pouch Instant Noodles 5.8 32.5
Plain Noodles 3.0 15.9
Snack Noodles - -
Noodles 5.9 32.9
trade sources

Noodles in vietnam mar 2013

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