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Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic packaged food and beverages still have extremely low presence in Vietnam. However, the category has shown an impressive CAGR of 54.7% for the period 2018-21, and it is expected to grow at a CAGR of 4.7% for the period 2022-25.
  • Growth in organic packaged food was led almost exclusively by organic baby food, with an increase in the value of 39.8% in 2021.
  • Sales of organic beverages were negligible in 2021, primarily due to higher per-unit prices and limited distribution. However, demand is expected to rise steadily due to an increasing number of health-conscious consumers.
Market Trends
  • Better for you carbonates received customer attention in 2021 due to marketing efforts made by major players in the category, such as PepsiCo and Coca-Cola Beverages Vietnam. PepsiCo Vietnam sponsored the TV game show, Rap Viet, to promote Pepsi Zero Calories; the event reached a record number of viewers.
  • Consumers have shown interest in fortified functional beverages with vitamin C. Vitamin C is preferred to boost the immune system against the Covid-19 virus. Therefore, the higher demand led to the development of new products such as Justnet Bird’s Nest with Vitamin C and Twister Passion Fruit & Apple with additional vitamin C in July 2021.
Competitive Landscape
  • Vietnam Dairy Products JSC (Vinamilk) strengthened its leadership position within health and wellness in Vietnam in 2021. Flagship brand Vinamilk saw value share climb to 18.8% in 2021 from 18.5% in 2020, thanks to its vast presence across fortified functional dairy, including drinking milk and yoghurt. The company benefits from its long-standing presence in the market and thorough understanding of Vietnamese consumer preferences. Along with having a broad portfolio of trusted brands, the company quickly adapts to new and emerging trends. It has an extensive distribution reach and heavily invests in marketing, advertising, and R&D of new products. 
  • Coca-Cola Vietnam and Suntory PepsiCo Vietnam are the key health and wellness beverages players. Both companies are actively involved in several initiatives to support the Vietnamese Government and help Vietnamese people deal with the Covid-19 pandemic. For instance, Coca-Cola Vietnam halted its advertising activities to raise money for the Central Committee of the Vietnam Red Cross in its endeavours to support the prevention and control of Covid-19.
Prospects And Growth Opportunity
  • Covid-19 has led Vietnamese consumers to embrace health and wellbeing as a lifestyle. There is increased adoption of low-calorie and reduced sugar products, especially among female consumers. As a result, the better for you category is expected to record better performance in the forecast period. Also, as Vietnam’s economy is recovering from the impact of Covid-19, consumers are set to show a greater willingness to spend on better for you beverages. Simultaneously, companies are expected to increase their marketing efforts to familiarise consumers with the reformulated taste of better for you products and, therefore, lead to sales growth.
  • Foreign players dominate the Vietnamese better for you market - Coca Cola Beverages Vietnam Ltd and PepsiCo Vietnam are firmly positioned in the market due to higher brand awareness and financial capabilities. Both the companies are expected to intensely compete over the increasing demand for reduced sugar beverages, which might discourage local players from entering into the category. However, larger local players in other soft drinks categories may venture into better for you beverages to grab the opportunity presented by rising health awareness amongst Vietnamese consumers. Therefore, the better for you category is expected to grow strongly in the forecast period, albeit from a relatively small base.
General Health And Wellness Trends
  • Consumers in Vietnam are becoming increasingly health conscious, and this trend is further boosted by the impact of Covid-19. Increased access to the internet and social media is spreading awareness among consumers; as a result, the health and wellness market in Vietnam is registering positive performance. Major players in the market are set to capitalize on the opportunity and respond with investment in new product development and marketing initiatives. 
  • The impact of Covid-19 on the spending power of consumers will remain a constraint for even stronger growth of the health and wellness category. Growing price sensitivity will weigh on the growth of organic products, alongside other factors including relatively low consumer awareness. Naturally healthy packaged food and beverages are set to remain small categories due to the abundance of fresh food alternatives in Vietnam. However, the fortified/functional beverages and packaged food categories are expected to gain traction due to their clear communication of benefits including boosting the immune system.
General Economics And Demographic Landscape

Economy

  • The economy of Vietnam proved fairly resilient to the impact of Covid-19, with real GDP growth posting 2.5% in 2021 and forecast to accelerate to 7.0% in 2022. Growth is aided by competitive labour costs, a diversified trade structure and recently signed free trade agreements.                   
  • Private final consumption witnessed an increase of 3.9% in 2021, with a growth of 6.0% expected in 2020. 

 

Population demographics: 

  • The population of Vietnam was recorded at 98.3 million by 2021 and is forecast to hit 104.5 million by 2030. 
  • The country has witnessed a rise in median age, which was recorded at 33 years in 2021. This indicator is expected to reach 36.6 years by 2030.
  • Population over 65 years is expected to rise from 8.4% of the total population in 2021 to 10% in 2025. The population between 0 to 14, is expected to steadily decline from 23.6% of the total population in 2021 to 23.1% in 2025.


 

Income & expenditure

  • The savings ratio in Vietnam was recorded at 3.3% of disposable income in 2021. This indicator is not expected to change through 2023. 
  • Per capita consumer expenditure was recorded at US$1,802 in 2021. For the period 2020-2030, total consumer expenditure is expected to witness a cumulative increase of 55%, averaging 4.5% growth annually. 
  • In 2021, disposable income per capita reached US$2,016, with the indicator expected to increase by 5% in 2022. For the period 2020-2030, total disposable income is expected to increase by 57.9%, growing at an annual average of 4.7%.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

2025

CAGR
(18-21)

CAGR
(22-25)

Health & wellness products consumption [1]

USD million

4,605.3

4,942.0

5,239.5

5,573.5

5,740.8

5,945.5

6,173.5

6,428.4

6.6%

3.8%

Organic packaged food and beverages consumption

USD million

6.7

13.8

17.8

24.8

29.5

31.2

32.6

33.9

54.7%

4.7%

Organic packaged food consumption

USD million

6.7

13.8

17.8

24.8

29.5

31.2

32.6

33.9

54.7%

4.7%

Organic beverages consumption

USD million

-

-

-

-

-

-

-

-

-

-

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

0.1

0.3

0.3

0.4

0.5

0.5

0.5

0.5

-

-

 

[1] Health and Wellness Definition: Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products. The above definition and more can be referenced from the definitions table at the end of the report.

Economic And Demographic Data

Data type

Unit

2018

2019

2020

2021

2022

2023

2024

2025

Total population

million

95.4

96.5

97.4

98.3

99.2

100.0

100.7

101.4

% Middle and upper class of total population

%

27.4

27.5

27.5

27.5

27.5

27.6

27.6

27.6

% Population aged 65+

%

7.4

7.7

8.0

8.4

8.8

9.2

9.6

10.0

% Population aged 0-14

%

23.5

23.5

23.6

23.6

23.5

23.4

23.2

23.1

% Population with higher education degrees

%

7.0

7.1

7.2

7.2

7.2

7.3

7.3

7.3

Average number of children per household

children

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

GDP per capita

USD per capita

2,509.1

2,702.1

2,791.2

2,998.2

3,180.2

3,369.0

3,554.4

3,734.4

Consumer expenditure per capita (US$)

USD per capita

1,517.2

1,699.6

1,758.0

1,801.7

1,882.6

1,982.2

2,083.0

2,171.8

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

477.2

528.6

556.4

562.1

585.9

617.0

647.5

672.8

 

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2021)

1

Ho Chi Minh City

12.7

Top cities by population (2021)

2

Hanoi

7.8

Top cities by population (2021)

3

Hai Phong

1.0

Top cities by population (2021)

4

Da Nang

0.9

Top cities by population (2021)

5

Can Tho

0.9

 

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2021)

1

Saigon Union of Trading Cooperatives

Top grocery retailers by sales (2021)

2

Mobile World JSC

Top grocery retailers by sales (2021)

3

Central Retail Corp

Top grocery retailers by sales (2021)

4

Masan Group Corp

Top grocery retailers by sales (2021)

5

Lotte Group

 

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To Vietnam

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2021

Vietnam

1

Organic Apples Fresh

5,920,476

2021

Vietnam

2

Organic Grapes Fresh

1,222,714

2021

Vietnam

3

Organic Vinegar and Substitutes

399,034

2021

Vietnam

4

Organic Cult Blueberries Fresh

118,080

2021

Vietnam

5

Organic Broccoli Fr/Ch

29,250

2021

Vietnam

Total

Total Organics*

7,723,617

2020

Vietnam

1

Organic Grapes Fresh

5,858,444

2020

Vietnam

2

Organic Cherries Fresh

1,083,982

2020

Vietnam

3

Organic Apples Fresh

674,809

2020

Vietnam

4

Organic Cherry Tomato Fr/Ch

345,930

2020

Vietnam

5

Organic Cult Blueberries Fresh

294,416

2020

Vietnam

Total

Total Organics*

8,523,742

2019

Vietnam

1

Organic Grapes Fresh

2,252,927

2019

Vietnam

2

Organic Apples Fresh

569,759

2019

Vietnam

3

Organic Cult Blueberries Fresh

219,600

2019

Vietnam

4

Organic Vinegar and Substitutes

140,973

2019

Vietnam

5

Organic Cherries Fresh

40,912

2019

Vietnam

Total

Total Organics*

3,265,651

2018

Vietnam

1

Organic Grapes Fresh

937,948

2018

Vietnam

2

Organic Apples Fresh

848,062

2018

Vietnam

3

Organic Vinegar and Substitutes

73,411

2018

Vietnam

4

Organic Oranges Fr/Dr 

34,000

2018

Vietnam

5

Organic Peach/Nectarin Fresh

28,240

2018

Vietnam

Total

Total Organics*

1,955,937

 

Note : Total organics is the sum of all exports to a country within a year

Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2018 – 2021 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2018-2021 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Ministry of Agriculture and Rural Development

Agency(s) Contact Information:

Ministry of Agriculture and Rural Development
2 Ngoc Ha Street
Ba Dinh
Hanoi
Vietnam
Phone: 84-4-8235804
Fax: 84-4-8230381 
Email: trangtin@mard.gov.vn
Website 

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

National Basic Standard for Organic Production – 10 TCN602:2006 Organic – was issued in 2006 but there were no official programs or regulations for implementing or supporting an organic agriculture system. 

The Ministry of Science and Technology issued the first National Standards on Organic Agriculture TCVN 11041 in 2017, standardizing the production, cultivation, animal husbandry, processing, and labeling of organic products, and requirements for organizations assessing and certifying organic product production and processing systems. 

Links to the National Standards can be found at https://isovnc.com/tai-lieu/tcvn-11041-1-2017 online can be translated into English, download in Vietnamese.

Decree 109/2018 on Organic Agriculture published in August 2018, regulated the production, certification, labeling, logo, traceability, trading, and inspection of organic agricultural products. 

Circular 16/2019, published in November 2019 to supplement Decree 109/2018, provided detailed guidance on the agencies and organizations that oversee the application, certification, and testing of organic agricultural products in Vietnam. 

Most recently, in June 2020, the Government of Vietnam approved the Organic Agricultural Development Project for 2020 – 2030. Under this project, Vietnam aims to gradually create a strong domestic organic agricultural industry and grow land for organic agricultural production to 1.5 – 2 percent of total agricultural land by 2025.

 

Imported Products

For imported products, Vietnam recognizes organic certifications from the United States, Europe, Australia, Japan, and many other developed markets. Vietnam also has the same import requirements for both organic and conventional products.

Certification and Accreditation

Certification:

Requirements for certification are not detailed in the national standard. Locally, small farms have turned to a participant guarantee system based on the national standards. International certifiers may be able to assist with certification in Vietnam.

There are registered third-party certifiers in Vietnam: Control Union, and international certification agency, and NHO QScert and MekongCert, Vietnamese organizations. 

PGS certifications aren’t officially recognized by the Vietnamese government, but they are commonly accepted by retailers and consumers.  The Vietnam Farmer Association and Seed to Table are two PGS projects. 

Additional Information

Reference Standards:

The Vietnamese organic standards are based on the IFOAM guideline and the ISO 65 issued by Codex Alimentarius on organic.

Additional Information:

U.S. International Trade Administration

USDA's GAIN Report Vietnam Exporter Guide (2021)
USDA's GAIN Report Vietnam Organic Market (2021)
USDA's GAIN Report Retail Foods Report (2021)
USDA's GAIN Report Vietnam Food Processing Ingredients (2021)
USDA's GAIN Report Food Service - Hotel Restaurant Institutional (2020)
USDA's GAIN Report GVN Reformed Decree Guiding the Law on Food Safety (2018)
USDA's GAIN Report MOH revises Regulation on Food Safety Inspection for Import Foods (2016)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2021)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2021)
USDA's GAIN Report Vietnam Amends the Labeling Requirements for Imported Goods (2021)