Kantar Worldpanel Dairy Talk
Ho Chi Minh City, Vietnam - Kantar Worldpanel, the global market leader in consumer panels, held their Kantar Worldpanel Dairy Talk on May 8th, 2013, at Sheraton Saigon Hotel. Kantar Worldpanel’s clients and invited guests were treated to an exclusive session designed as a platform to capture the current trends of consumption habits and inspire them to make well-informed decisions within dairy market. The event was structured into two main parts, including the landscape of current Vietnamese consumer behaviours towards FMCG (Fast Moving Consumer Goods) and a journey to explore the milky opportunities in dairy market.
1. Vietnam Consumer Pulse – A country between challenges and opportunities
2012 casts a shadow on Vietnamese economy with a low GDP growth – the lowest in the last decade, soaring bad debts levels, stagnant production and low demand. However, there are still bright spots in the overall picture, which might pave the way for a rebound in 2013 and years to come. For instance, inflation rate, which has been a persistent woe of the economy, is well curbed at 9.2% over 2012, significantly lower than the average rate of 18.7% in 2011. The local currency VND has also held its value with a stable exchange rate with US dollar and the country has achieved a trade surplus for the first time in two decades, which helps create conditions to increase foreign currency reserves. Besides, tremendous opportunities are still waiting in the long run with the entrance of international players and the further investment of many current players in Vietnam market.
In terms of retail landscape, Street Shops still remains the most popular FMCG shopping place, but Modern Trade has surpassed Wet markets to become the second most popular channel. In urban 4 cities, Modern Trade has reached 18% of market value, with fast development at double digits year-on-year growth. Modern Trade also speeds up by attracting more rural households, though still very small in this area (2% market value). Today, 85% urban population and 24% of rural population go shopping at Modern Trade at least once per year.
Vietnamese consumers are becoming more and more sophisticated. As consumers are now money rich yet time poor, they are seeking for Convenience in shopping and product usage. In addition, they are more concerned about Health issues, and willing to pay more for products that are good for health or offer added valued benefits. Not only that, Vietnamese consumers are looking forward to new product launches that can satisfy their needs betters. Hence, in the latest year, these 4 Vietnamese consumer trends are being reported by Kantar Worldpanel which are Speed and Convenience, Health and Wellness, From Basic to Added Value, and Innovation.
2. Vietnam Dairy Market – The milky opportunities
Driven by real demand, Vietnam dairy market has been shining within the SEA region. Even in tough economic conditions, the dairy market blossoms with double-digit growth in both Urban and Rural. Dairy plays the most important part in FMCG wallet of urban families, and grows the fastest in rural recently. In the next 3 years, Dairy is expected to become more essential for Vietnamese consumers, especially in Rural where it still stays at the third position in the FMCG basket. Besides the increased health concern of Vietnamese consumers, the wider availability of fridges in-home will also help facilitate the development of this sector.
In such a turbulent market, the huge consumer base and high shopping traffic offer great opportunities for different dairy products to approach their consumers. Over 80% of urban households and half of rural families shop for Dairy every month. Like in many food products, Traditional Trade is crucial for Dairy, in which Street Shops account for two third of the market value. However, Hypermarkets and Supermarkets should not be ignored in Urban as being the second most popular shopping destination and obtaining faster growth rate, while Wet markets contribute over one third of the market value in Central and South Rural. Around 50% of dairy purchases are combined with other FMCG products, mostly in packaged foods such as instant noodle, cooking oil and sugar. In addition, the mega bulky shop and up-trading trends are also practiced in Dairy by both urban and rural consumers. For instance, the consumers are shopping more packs of liquid milk and cup yogurt, or going for bigger pack sizes of milk powder in a shopping trip. More premium products with added-value benefits, such as fortified liquid milk, beauty cup yogurt or probiotic drinking yogurt, are attracting more and more shoppers as the consumer needs become diversified. Although households with kids are still core, mature families are emerging with higher demand for dairy, especially functional and specialized products.
While manufacturers observe great development potentials in various dairy categories, moving from mass to segmentation and understanding the changes in your target consumers’ needs and behaviours will be the key to success in Vietnam dairy market.
Downloadable summary slides and other materials are available at the links on the right side of this page.