FMCG Monitor September 2018
Ice cream: hot item this summer in Rural Vietnam
Key market highlights in September 2018 issues:
Vietnam’s economy looks bright in the first 7 months of 2018, posting a GDP growth of 7.08% (YTD June), with positive economic indicators. The country is growing more attractive to foreign investment and the local consumer demand continues showing a robust growth, strongly in fresh foods, home appliances, and vehicles.
FMCG slows down in Urban 4 key cities in both Q1 and Q2’2018 yet there’s a recovery signal by July. In Rural, the market continues to grow sustainably.
The slowdown of FMCG market in Urban 4 cities is due to lower consumption rate of Dairy and Packaged Foods, driven by the major must-have categories such as Liquid Milk and cooking aids (Taste Enhancer, Fish Sauce, Soya Sauce) while other developing categories like Tonic Food Drink, Functional Drinking Yoghurt, Ketchup, Chili sauce... continue to grow healthily. In Rural, Dairy, Beverages and Personal Care enjoy good growth in both value and volume consumption while Packaged Foods and Home Care are under-performing.
While FMCG grows at 5.2% in Rural Vietnam, Ice cream achieved double-digit growth rate and enjoyed the highest reach to end consumers this summer in Rural. Significant seasonality movements are observed in Central and especially North where ice-cream penetrated twice as much as other regions. On the contrary, ice-cream is being bought all year round in South Rural and starts penetrating into more families in 2018. At the result, consumers display different shopping habits and preferences in each region. A cell–approach strategy with relevant consumer insight is needed in order to capture this short-term sales push opportunity.
Modern Trade is making good progress in Urban 4 Cities, Hypermarket & Supermarket achieves a stronger growth vs. the previous quarter. Mini-format (minimarkets & convenience stores) keeps its momentum with double-digit growth rate benefiting mostly to processed foods, instant noodle, sauces, and biscuits… In Rural, small street shops are still key to reach Rural shoppers and drive growth, especially in deep Rural areas.
Spotlight of the Month – Future growth: The New Seniors
Vietnam population is still young yet starts aging and consumers are facing more health issues. The New Seniors is the group expected to boom with highest organic growth in the next decades. With higher income, greater health-consciousness and time rich for self-indulgence when retiring, this group promises high ROI for manufacturers and retailers to target to. Functional Adult Milk Powder comes back to strong growth rate despite the decline of other Milk Powder formats in the recent years. However, the category still possesses a huge opportunity to develop further by answering to the different health needs that Vietnamese consumers are concerned.
Urban 4 cities include Ho Chi Minh, Ha Noi, Da Nang and Can Tho.
*Follow links on the right side of this page to download full reports and press releases in both English and Vietnamese.