Premium Beer Consumption in Vietnam More Than Doubled Between 2011 and 2016

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Premium Beer Consumption in Vietnam More Than Doubled Between 2011 and 2016

Premium Beer Consumption in Vietnam More Than Doubled Between 2011 and 2016
November 27
11:22 2017

A storm is brewing for discount brands selling lower-quality products as Vietnamese beer drinkers are increasingly picking up premium and superpremium products from shelves, with premium beer consumption rocketing to 10 million hectoliters in 2016, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report ‘Vietnam Beer and Cider Market Insights 2017 states that the volume of discount beer that includes Bia Hoi (a local unfiltered ‘homebrewed’ beer, popular in rural areas) has been steadily declining in Vietnam since 2011, which dropped to 3 million hectoliters of sale in 2016 from 3.5 million in 2011. On the other hand, premium beer jumped from 4,000 thousand hectoliters in 2011 to around 10,000 thousand hectoliters in 2016, clearly indicating the changing trend in the country. Though limited in share, sales of superpremium beer sales have more than tripled in 2016, from around 100 thousand hectoliters in 2011, driven by the rise in disposal income among Vietnamese.

Traditionally, beer has been the country’s favourite drink and its thirst for the beverage is not being quenched by other alcoholic beverages. Indeed, beer accounted for 95% of Vietnam’s total alcoholic beverage consumption in 2016.

Kevin Baker, Consumer Analyst at GlobalData, says: “Beer is considered to be more affordable than other alcoholic beverages and offers greater refreshment than spirits.”

Craft beer continued with its expansion in 2016, more prominently in urban hubs such as Ho Chi Minh City and Hanoi. Several new players forayed into the craft beer segment experimenting with unique fruit and herb flavours. Craft beer segment only accounts for 0.2% of the total market but it grew by 40% in 2016 and is expected to continue its growth trajectory.

Small brewers are developing their own outlets for distribution to cut down their dependence on existing channels, which are dominated by major manufacturers.

Baker adds: “An important trend seen in this market is the rise of beer clubs and growth in craft/microbreweries, both of which are indicative of increasing premiumisation.”

In 2016, the number of trademark beer clubs in Ho Chi Minh touched 60. The clubs have thrown open up a new avenue for investment, with new launches targeting niche demographics such as women, and premium beer consumers.

Baker notes: “The explosion of craft beer segment along with on-premise consumption will drive more small brewers to open their outlets in cities as traditional distribution channels are crowded with big brands. Beer clubs will provide a stable platform for consumers to experience new products and flavours.”

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