VN Biscuits 09

Biscuits - Vietnam
Euromonitor International : Country Sector Briefing

November 2009
Biscuits
Vietnam
List of Contents and Tables

Headlines ................................................................................................................................................................. 1
Trends ...................................................................................................................................................................... 1
Competitive Landscape .......................................................................................................................................... 2
Prospects .................................................................................................................................................................. 2
Sector Data .............................................................................................................................................................. 3
Table 1
Sales of Biscuits by Subsector: Volume 2004-2009 .......................................................... 3
Table 2
Sales of Biscuits by Subsector: Value 2004-2009 ............................................................. 3
Table 3
Sales of Biscuits by Subsector: % Volume Growth 2004-2009 ......................................... 4
Table 4
Sales of Biscuits by Subsector: % Value Growth 2004-2009 ............................................ 4
Table 5
Biscuits Company Shares 2004-2008 ................................................................................ 4
Table 6
Biscuits Brand Shares 2005-2008 ...................................................................................... 5
Table 7
Forecast Sales of Biscuits by Subsector: Volume 2009-2014............................................ 5
Table 8
Forecast Sales of Biscuits by Subsector: Value 2009-2014 ............................................... 6
Table 9
Forecast Sales of Biscuits by Subsector: % Volume Growth 2009-2014 .......................... 6
Table 10
Forecast Sales of Biscuits by Subsector: % Value Growth 2009-2014.............................. 6
Euromonitor International
Page
Biscuits
Vietnam
BISCUITS IN VIETNAM
HEADLINES
Biscuits enjoy strong growth of 19% with sales reaching VND4,472 billion in 2009
Savoury biscuits and crackers register the strongest growth of 26%, due to an increase in the number of
consumers who are concerned about health and wellness
The unit price of biscuits rises by 7% as raw materials and transport costs increase in the first quarter of
2009
Kinh Do Corp dominate biscuit sales in 2008, holding 30% share of total value sales
Over the forecast period, biscuits is predicted to see a value CAGR of 10%
TRENDS
In 2009, biscuits continued to enjoy strong growth as manufacturers improved their products quality and
packaging. In addition, growth was also due to well diversified product ranges in terms of type and flavour.
There was an increasing trend among domestic players to localise the flavour of biscuits to respond to local
consumer tastes. For example, Hai Ha Confectionery introduced a new biscuit with coconut milk flavours,
which are used in Vietnamese traditional confectionery. During the review period, consumers were
reluctant to buy imported biscuits from China, Malaysia, and Thailand due to the incident with melamine
found in milk in China in 2008. Hence, the sales of domestic players increased while the sales of imported
products decreased significantly.
Biscuits registered a growth rate of 19% in Vietnam in 2009. Although the growth was marginally slower
than in 2008, it was considered to be a successful year for biscuits given the recent economic crisis as well
as inflation. This was due to clever strategies exploited by manufacturers: instead of increasing prices to
cover their costs, they decided to make their packaging formats smaller with a slightly cheaper price. As a
result, together with more appealing packaging, biscuits appeared to offer more value to consumers, which
stimulated their consumption and enhance value sales.
Savoury biscuits and crackers saw the fastest growth during the review period, due to the rising awareness
of healthy products. Savoury biscuits and crackers became more familiar to Vietnamese consumers due to
its low fat content and versatility: consumers sometimes used crackers with spreads for their breakfast or
lunch. Savoury biscuits and crackers was also treated as snacks to temporarily satisfy hunger pangs during
the working day. AFC from Kinh Do Corp and Ritz from Kraft Foods Inc were popular savoury biscuits
and crackers in the category. Both of them offered diversified flavours such as original or vegetable and
came in varying packaging sizes which are suitable to different consumers demands. In 2009, major
manufacturers offered new savoury biscuits and crackers, such as Kinh Do Corp which introduced a new
brand called Cosy crackers, while Hai Ha Confectionery launched Bisavit A and coconut crackers.
Due to the inflation in Vietnam at the beginning in 2009, raw material and transportation costs both
increased. Consequently, the price of biscuits in Vietnam marginally increased. Manufacturers tried to keep
their prices unchanged or reformatted their packaging into smaller sizes. Moreover, smaller sized packaging
was also convenient for consumers who wanted to eat small amounts. Economic difficulties only
marginally impacted on the growth of biscuits, because the price of biscuits is relatively cheap in Vietnam.
Furthermore, manufacturers recently improved biscuits packaging to be more appealing, which are ideal
for gifts on special occasions such as Tet Holidays or Christmas.
In Vietnam, sandwich biscuits are often consumed for breakfast or during a tea break. Sandwich biscuits
also saw rising sales in 2009 with 16% growth. Since Kraft Foods Inc introduced Oreo to Vietnam and
received a positive response from consumers, other manufacturers followed its lead to produce sandwich
biscuits with different flavours. One example is from Bien Hoa Confectionery which launched its Creamy
brand which produced sandwich biscuits with coffee, strawberry, and jam flavours to suit different tastes.
Similarly to other category, cookies and filled biscuits also experienced slower growth in 2009 as compared
to 2008. That said, consumers witnessed the development of cookies and filled biscuits in 2009. Bien Hoa
produced cookies under its ChocoChips brand including coconut, grapes and strawberry flavours and its
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Biscuits
Vietnam
sales attained some achievement in the category due to its reasonable price as well as high quality product.
Kinh Do Corp expanded its share by adding to its existing product line with Korento cookies and filled
biscuits.
As the health and wellness trend was not particularly well developed in Vietnam during the review period,
manufacturers mainly focused on their core products, and developed new flavours and packaging designs.
Some manufacturers began to realise the increasing importance of healthy products as a growing trend, and
developed low-fat and sugar-free products even though sales for these niche areas were limited.
COMPETITIVE LANDSCAPE
In 2008, Kinh Do Corp improved its leading position in biscuits. Its sales share accounted for 30% of total
biscuit value sales, which was almost three times more share than second ranked player Bien Hoa
Confectionery. This was due to its established and popular brand in bakery products, and strong distribution
network. In contrast to its competitors, Kinh Do Corp was the first manufacturer to focus on branding and
marketing activities as the main strategy to expand its share. It advertised seasonally in order to create brand
awareness of its products on television and local newspapers. For example, AFC cracker places an
emphasis on modern lifestyles which encourages positive interest from younger consumers.
Kraft Foods Inc saw the largest increase in value sales in 2008, gaining 0.7 of a percentage point to reach
10% share. It was an impressive move for Kraft Foods Inc, because it reached the third position in the
market from the fifth position in 2006. This was due to its famous savoury biscuits Ritz, which are regarded
as premium biscuits in Vietnam. Ritz has an appetising cheese flavour which is a favourite among all age
groups from from children to the elderly. Furthermore, its sandwich biscuit Oreo and cracker Jacob became
more familiar to consumers due to advertising and promotions in wet markets and
supermarkets/hypermarkets during the review period.
Given the recession, advertising and promotions have proved to be successful in Vietnam with Kraft Foods
Inc being a good example. Bien Hoa Confectionery also launched several new products during the review
period, however it did not widely advertise within the public media. Hence, its new products did not reach
consumers successfully. Another winning strategy was to build a strong distribution network across the
country and Kinh Do Corp does this successfully. The company operates a wider distribution network in
Vietnam than most of its competitors and therefore its products, particularly its new developments, are able
to reach consumers faster than those of its competitors.
Domestic manufacturers dominated sales in Vietnam in biscuits in 2008, because companies such as Kinh
Do Corp and Bien Hoa Confectionery invested in high technology early on to improve quality, and
continually executed new product development. Therefore, there are thousands of brands and types within
biscuits. However, towards the end of the review period, domestic manufacturers faced a threat from the
strong expansion of international manufacturers such as Kraft Foods Inc.
During the review period, Kraft Foods continued to exploit marketing strategies to expand its share. Apart
from advertising on television, it also promoted its products by setting up booths outside
supermarkets/hypermarkets and even wet markets to distribute product samples and sell products with
discounted prices. In addition, Bien Hoa Confectionery collaborated with Lotte Mart, the latest hypermarket
to launch promotions. It placed discounts on 10% of all Bien Hoa's products at Lotte Mart during Christmas
and Tet Holidays in Vietnam.
There were interesting new product developments during the review period, especially in savoury biscuits
and crackers, and filled biscuit such as Korento from Kinh Do Corp. The new launches offer various
flavours which reflect Vietnamese tastes such as coconut milk, pineapple, and jam. Most of the new
launches attained some achievement because of their appealing packaging as well as appetising flavours.
PROSPECTS
Biscuits is expected to see a volume growth at CAGR 9% during the forecast period, lower than historical
CAGR growth rate at 13%. The slower growth in terms of volume is due to the presence of competing
products such as sweet and savoury snacks, which are popular in Vietnam. Thanks to price of biscuits that
is quite reasonable, consumers therefore still continue to consume biscuit over forecast period.
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Biscuits
Vietnam
The differentiation between premium brands and economy brands will become more visible in Vietnam
over the forecast period. Manufacturers will develop more premium brands with superior quality and
elegant packaging designs, which can be used as gifts on special occasions. Economy brands will be more
diversified in term of flavours and types to suits different tastes.
Savoury biscuits and crackers is predicted to register strong growth over the forecast period with a value
CAGR of 13%, followed by sandwich biscuits and filled biscuits. More innovations in savoury biscuits and
crackers are expected following the lead from Kinh Do Corp with its AFC brand which introduced a DHA
cracker, which added Docosahexaenoic acid (DHA) to enhance brain activity, and increased AFCs sales
considerably. Therefore, other manufacturers will follow its lead with additional ingredients such as DHA
or Vitamin C to attract consumers attention and stimulate sales.
The unit price of biscuits may only marginally increase over the forecast period, as manufacturers had
already increased their product prices during the review period. Manufacturers are also reluctant to increase
their prices, because Vietnamese consumers are very price-sensitive.
Discounts and promotions which might be used by players over the forecast period will make competition
within biscuits tougher. Bien Hoa Confectionery may set up a major advertising campaign to fortify its
position. More variants of biscuits are likely to be launched to sustain strong consumer interest. Leading
manufacturers may produce different brands for both low-end and high-end consumers. Small
manufacturers should choose to focus on the most suitable segments for them only, and therefore some relaunches or discontinuations may be observed over the forecast period.
SECTOR DATA
Table 1
Sales of Biscuits by Subsector: Volume 2004-2009
'000 tonnes
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Chocolate coated
biscuits
-- Sandwich biscuits
-- Filled biscuits
- Savoury biscuits and
crackers
Biscuits
Source:
Table 2
2004
2005
2006
2007
2008
2009
48.1
33.4
3.3
0.3
53.2
37.6
3.5
0.4
59.3
42.5
3.7
0.4
67.3
48.9
4.0
0.4
75.8
55.7
4.3
0.5
83.3
61.6
4.6
0.5
9.5
1.5
8.9
10.2
1.6
10.7
11.0
1.7
13.0
12.1
1.9
16.1
13.2
2.1
19.6
14.4
2.3
23.5
57.0
63.9
72.3
83.4
95.4
106.9
Official statistics, trade associations, trade press, company research, store checks, trade interviews,
Euromonitor International estimates
Sales of Biscuits by Subsector: Value 2004-2009
VND billion
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Chocolate coated
biscuits
-- Filled biscuits
crackers
Biscuits
Source:
2004
2005
2006
2007
2008
2009
1,289.6
703.1
139.3
45.0
1,511.3
850.7
156.0
51.0
1,783.7
1,033.6
175.5
57.0
2,092.7
1,230.0
198.3
65.0
2,477.1
1,476.0
226.1
74.7
2,861.5
1,712.2
256.6
85.2
331.5
70.7
505.9
372.9
80.7
627.3
425.1
92.3
780.4
493.2
106.2
991.1
577.0
123.2
1,278.5
666.4
141.1
1,610.9
1,795.5
2,138.7
2,564.0
3,083.8
3,755.6
4,472.4
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Biscuits
Vietnam
Table 3
Sales of Biscuits by Subsector: % Volume Growth 2004-2009
% volume growth
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Chocolate coated biscuits
-- Filled biscuits
- Savoury biscuits and crackers
Biscuits
Source:
2008/09
2004-09 CAGR
2004/09 TOTAL
10.0
10.5
7.0
7.0
9.2
8.5
20.0
12.1
11.6
13.0
6.9
7.9
8.6
8.5
21.5
13.4
73.3
84.2
39.6
46.4
51.2
50.3
164.7
87.5
Table 4
Sales of Biscuits by Subsector: % Value Growth 2004-2009
% current value growth
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Filled biscuits
Biscuits
Source:
2004-09 CAGR
2004/09 TOTAL
15.5
16.0
13.5
14.0
15.5
14.5
26.0
19.1
17.3
19.5
13.0
13.6
15.0
14.8
26.1
20.0
121.9
143.5
84.2
89.3
101.0
99.4
218.4
149.1
Table 5
Biscuits Company Shares 2004-2008
% retail value rsp

Company
Kinh Do Corp
Bien Hoa Confectionery
Corp (Bibica)
Kraft Foods Inc
Hai Chau Confectionery Co
Haiha Confectionery
Joint-Stock Co (Haihaco)
Quang Ngai Sugar Co
Dong Khanh Food
Industrial Co Ltd
Huu Nghi Confectionery Co
Meiji Seika Kaisha Ltd
Vinabico - Kotobuki JV
Ha Noi Confectionery Co
Danone, Groupe
Kinh Do Food Processing
& Construction Ltd Co
Others
Total
Source:
2008/09
2004
2005
2006
2007
2008
25.6
11.0
28.9
11.3
29.6
10.7
29.6
10.3
30.3
9.9
5.0
6.7
6.8
5.7
6.2
6.7
6.3
6.5
6.6
8.9
6.7
6.2
9.6
6.9
5.9
5.6
5.7
5.0
5.1
5.3
4.9
5.3
4.7
5.4
4.3
5.3
4.0
2.3
1.4
2.0
-
4.9
3.5
2.2
1.3
2.5
-
4.7
3.3
2.4
1.4
2.4
-
4.4
3.2
2.4
1.4
-
4.2
3.0
2.4
1.5
-
18.4
100.0
16.8
100.0
16.0
100.0
17.1
100.0
16.6
100.0
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Biscuits
Vietnam
Table 6
Biscuits Brand Shares 2005-2008
% retail value rsp

Brand
Kinh Do
AFC
Hai Chau
Hai Ha
Ritz
Bibica
Dong Khanh
Quang Ngai
Big Day
Vinabico-Kotobuki
Oreo
Emily
Jacob's
Friendship
Meiji
Ha Noi
Huu Nghi
Victory
Hello Panda
Lovely
Yan Yan
TUC
Vip
Jacob's
TUC
AFC
Big Day
Kinh Do
Vip
Company
2005
2006
2007
2008
Kinh Do Corp
Kinh Do Corp
Hai Chau Confectionery Co
Haiha Confectionery
Joint-Stock Co (Haihaco)
Kraft Foods Inc
Corp (Bibica)
Dong Khanh Food
Industrial Co Ltd
Quang Ngai Sugar Co
Kinh Do Corp
Vinabico - Kotobuki JV
Kraft Foods Inc
Corp (Bibica)
Kraft Foods Inc
Ha Noi Confectionery Co
Corp (Bibica)
Corp (Bibica)
Kraft Foods Inc
Kinh Do Corp
Danone, Groupe
Danone, Groupe
12.2
6.1
6.2
5.2
12.7
6.2
6.5
5.2
12.8
6.4
6.7
5.0
13.1
7.0
6.9
4.8
3.0
4.6
3.8
4.4
4.2
4.4
4.8
4.5
5.1
4.9
4.7
4.3
3.5
1.6
2.2
2.6
2.1
3.7
2.0
2.4
2.5
2.1
3.6
2.2
2.4
2.4
2.0
3.6
2.5
2.4
2.3
1.9
2.4
1.8
1.3
1.3
1.6
2.3
1.6
1.4
1.2
1.4
1.6
2.0
1.6
1.4
1.2
1.3
1.8
1.8
1.6
1.5
1.1
1.1
1.0
0.9
0.9
0.9
0.8
0.8
0.8
0.7
0.7
0.5
1.8
0.7
-
0.7
0.5
1.6
0.7
-
0.7
0.7
0.5
-
0.7
0.7
0.5
-
31.5
100.0
30.2
100.0
30.6
100.0
29.5
100.0
Others
Total
Source:
Table 7
Forecast Sales of Biscuits by Subsector: Volume 2009-2014
'000 tonnes
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Chocolate coated
biscuits
-- Filled biscuits
crackers
Biscuits
2009
2010
2011
2012
2013
2014
83.3
61.6
4.6
0.5
90.2
66.5
4.9
0.5
98.4
72.5
5.2
0.6
106.1
77.6
5.5
0.6
113.7
82.2
6.0
0.7
121.2
86.3
6.4
0.7
14.4
2.3
23.5
15.8
2.5
27.8
17.5
2.7
32.2
19.4
2.9
36.7
21.6
3.2
41.5
24.2
3.5
46.3
106.9
118.0
130.6
142.8
155.2
167.5
Page
Biscuits
Vietnam
Source:
Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International
estimates
Table 8
Forecast Sales of Biscuits by Subsector: Value 2009-2014
VND billion
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Chocolate coated
biscuits
-- Filled biscuits
crackers
Biscuits
Source:
2009
2010
2011
2012
2013
2014
2,861.5
1,712.2
256.6
85.2
3,013.4
1,806.4
263.0
89.4
3,233.1
1,932.8
274.9
96.2
3,493.2
2,077.8
291.4
104.3
3,766.8
2,212.8
311.8
113.7
4,055.9
2,334.5
336.7
124.5
666.4
141.1
1,610.9
706.4
148.1
1,852.6
770.0
159.2
2,121.2
847.0
172.7
2,396.9
940.2
188.3
2,684.6
1,053.0
207.1
2,979.9
4,472.4
4,866.0
5,354.3
5,890.2
6,451.4
7,035.8
estimates
Table 9
Forecast Sales of Biscuits by Subsector: % Volume Growth 2009-2014
% volume growth
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Filled biscuits
Biscuits
Source:
Table 10
2013/14
2009-14 CAGR
2009/14 TOTAL
6.6
5.0
7.8
8.8
11.8
9.8
11.5
7.9
7.8
7.0
7.0
8.1
10.9
9.3
14.5
9.4
45.4
40.2
40.0
47.3
67.9
55.7
96.6
56.7
estimates
Forecast Sales of Biscuits by Subsector: % Value Growth 2009-2014
% constant value growth
- Sweet biscuits
-- Plain biscuits
-- Cookies
-- Filled biscuits
Biscuits
Source:
2009-14 CAGR
2009/14 TOTAL
7.2
6.4
5.6
7.9
9.6
8.0
13.1
9.5
41.7
36.3
31.2
46.2
58.0
46.8
85.0
57.3
estimates
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Biscuits - Vietnam

Euromonitor International : Country Sector Briefing

List of Contents and Tables

Sales of Biscuits by Subsector: Volume 2004-2009

Sales of Biscuits by Subsector: Value 2004-2009

Sales of Biscuits by Subsector: % Volume Growth 2004-2009

Sales of Biscuits by Subsector: % Value Growth 2004-2009

% current value growth

Biscuits Company Shares 2004-2008

% retail value rsp

Biscuits Brand Shares 2005-2008

% retail value rsp

Forecast Sales of Biscuits by Subsector: Volume 2009-2014

Forecast Sales of Biscuits by Subsector: Value 2009-2014

Forecast Sales of Biscuits by Subsector: % Volume Growth 2009-2014

Forecast Sales of Biscuits by Subsector: % Value Growth 2009-2014

% constant value growth

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