FMCG Monitor August 2017
FMCG market is showing an early signal of rebound after low season.
FMCG consumption shows improvements
Key market highlights in August 2017 issues:
CPI in August 2017 is higher than last month due to the rising price of oil and health services. However, the average CPI in the first 8 months continues to be controlled under +4%. The Vietnam’s economy looks brighter despite challenges and is expected to improve further in the remaining months.
In short term, volume consumption picks up slightly in Urban 4 cities market and has been improved in Rural after falling into the 2017’s lowest growth. The market is showing an early signal of rebound after low season.
Volume consumption plays a driving role in sector performance. While Beverage is getting its momentum back, non Food sectors continue to shine bright, Dairy and Packaged Foods still post negative growth in this period. Consumers have recently reduced consumption in cooking aids, are they changing their cooking habit? Or spending more on eating out?
After a downturn in 2016, Soya Milk has recovered in both Urban 4 cities and Rural since the beginning of this year thanks to winning back consumers’ choice. Some key players aggressively pour cash into promotion heating up the market again, does it drive the category healing? And how far Soya Milk can grow amidst the tendency towards adopting more nutrition products?
In Urban 4 key cities, modern formats keep outgrowing traditional channels. Interestingly, Specialty Stores especially selling drinks and personal care items now lead the growth of traditional trade. It seems to meet individual needs consumers are heading more toward shopping places that offer a diverse range of product choices.
Spotlight of the Month – The importance of Fresh Foods!
Fresh Foods still represent the biggest spending in consumers’ wallet, however we are seeing changes in Fresh Food basket. Consumers now allocate more to fruits, vegetables and white meat (sea foods, fishes). Health concern may influence their shopping behavior not only in FMCG but also in Fresh Foods. Hence, prioritizing consumers’ wellbeing should be considered in order to drive further growth.
Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.
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