Beer investors and useful information

Beer investors in Vietnam – The rapid development of the economy and population growth rate of Vietnam has created an opportunity for the strong growth of FMCG industry, the most prominent is the alcohol industry accounted for 94% of total consumption of Alcoholic beverages and 31% of the total Beverages market.

The market share of the beer industry pie is still the largest slice of Sabeco, Heineken, Habeco, etc. Recently, the information that the government gradually divest two “big” beer companies which are Habeco and Sabeco makes more foreign investors want to find their places in this fertile land.

In the context of the Trans-Pacific partnership agreement (TPP) and the ASEAN Trade in Goods agreement (ATIGA) in preparation to enter into force stage, more opportunities for foreign investors are opened up. In parallel, there are still some difficulties regarding the legal conditions for the establishment of beer companies in Vietnam and the pressure to compete with major brands in this industry.

Let’s go with Kizuna through some extremely useful information about the Vietnamese beer market, the opportunity to join a large, attractive playground that is also challenging, as well as the difficulties and advantages of legal procedure when establishing brewing company in the Vietnamese market.

Overview of the beer industry in Vietnam

According to the latest statistics from Kirin Beer University Report, Vietnam had the highest growth of beer production in the world with a total amount of global beer production reached 188.64 billion liters in 2015 (-1.1% yoy) led Asia for 7 years in a row. Consumption was also impressive when reached 3.80 billion liters in 2015 (by Heineken – beerworkers.org), increased 4.40% yoy, ranking 11th beer consumption in the world and Asia’s top 3 after China and Japan. However, sales figures mentioned above are still not commensurate with the growth in manufacturing output, reflecting the level of competition in the market is rising steadily.

In general, through the reported data, the attractive market share of the beverage industry are still in the hands of the leading giants such as Sabeco accounting for 40.59%, Heineken 21.44%, Habeco  19.64%, Carlsberg 6.74%.

Opportunities to split this large pie

In ancient times, the betel is considered the beginning of a story, but today alcohol is used for opening all meetings. Therefore, the beer industry is currently considered highly profitable sector and is the dream of many domestic enterprises as well as foreign investors looking for growth opportunities.

With the analysis of data on demographics such as population growth, aging population level, and the structure remains highly concentrated population in the age of 15- 54 (61.91%), Vietnam is still an attractive sales market not only in the consumer goods industry in general but also the beer industry in particular.

However, the market share of the beer industry is not really allocated evenly together with the divestment in two major pillars in the industry which are Sabeco and Habeco has opened up opportunities for not only domestic firms but also foreign investors to be involved in the production of alcohol in the Vietnamese market. And this market will be hotter in the context of the Trans-Pacific partnership agreement (TPP) and the ASEAN Trade in Goods agreement (ATIGA) is gradually effect will create more favorable conditions for foreign enterprises.

Difficulties when joining

Opportunity to enter the Vietnamese beer market is becoming the central point of many big investors, but there are still many factors that can become barriers to foreign beer investors.

Firstly, regulations of selling prices and taxes have caused many difficulties for enterprises. Moreover, for the sustainable development, the Ministry of Industry and Trade has issued more stringent control and management regulations of domestic production and foreign products.

When the trade agreements become effective means that the market will become more intense competition. At the same time, the establishment of a beer company in Vietnam is still difficult because the legal procedures are always a matter of concern. The secure solution is that investors must pay attention to is finding a good location with support services such as legal, establishment licenses, personnel administrative procedures. And Kizuna is considered one of the few units that can support the enterprises, investors to establish a beer company in Vietnam parallel with available rental serviced factory. Currently, Kizuna has 4 beer companies including Pasteur Street, Alkemia, Winking Seal and So Belgium, so we understand the necessary legal procedures and have certain qualifications in this sector.

In conclusion, brewery investors overseas who are intending to seek opportunities for development in the beer industry in the Vietnamese market, let’s seize opportunities quickly and find the best supporting units to get a firm and safe step when joining this industry.

Beer Investors – According to Marketing Department (Kizuna JV Corporation)