Big brewers spend big to grab Vietnam market share

By Thi Ha   September 16, 2016 | 08:00 pm GMT+7
Big brewers spend big to grab Vietnam market share
Men drink beer at a restaurant in Hanoi. Photo by Reuters/Kham

With a thriving street-side cafe and bar culture, young population and rising middle class, Vietnam is luring top brewers.

With a thriving street-side cafe and bar culture, young population and rising middle class, Vietnam is luring brewers such as Heineken from the Netherlands and Sapporo and Asahi from Japan.

Japanese brewer Sapporo, which arrived in Vietnam in 2010, said the company has established connections with about 2,000 restaurants, outlets and beer clubs. Sapporo said the the cost of financing is considerable though it didn't reveal the figure.

Sapporo is widely considered as having the most aggressive spending program among existing brewers in the country's beer market.

Besides sponsoring the street-side bars, the Japanese company employed about 700 promotional staffs in 2015.

In addition, the company also hires an additional 6-10 people to welcome and introduce products at every major event.

Meanwhile, Heineken Vietnam Brewery Ltd. (VBL) has been spending hundreds of billions of VND (VND1 billion is equivalent to US$45,000) on establishing connections. VBL has enjoyed strong growth and has continued to increase its production in the country.

President of Heineken in Asia Pacific Frans Eusman said the company is pouring money into Vietnam, its second most profitable market behind Mexico. In 2015, the company raked in trillions of VND in profit.

The third largest beer company in Vietnam - Saigon Beer-Alcohol-Beverage JSC - commonly known as Sabeco, also spent nearly VND1.3 billion on promotional activities last year, an increase of 43.2 percent compared to 2014.

A Sabeco official said beer companies are happy to spend a large amount of money on promotions at restaurants, bars and clubs because that's where the demand comes from. 

Vietnam is the number one market in Southeast Asia for beer consumption, and the profits outweigh promotional costs, he said.

According to a recent report released by the Vietnam Beverage Association (VBA), Vietnamese people drank more than 3.4 billion liters of beer in 2015, a 40 percent increase from 2010, putting the country in the top 10 global consumers of alcohol.

Sabeco is the country’s largest brewer by sales and claimed 40 per cent of the market last year, followed by Heineken and Habeco with 20 per cent each, according to Nguyen Van Viet, chairman of the VBA.

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