Viet Nam: Brewing up a storm

What is it about Viet Nam that its beer industry, amongst others, seems to be unshaken by the global economic downturn? True, local consumption dipped last year, but companies managed to make a profit.

Viet Nam, for one, is a nation of beer drinkers just like many of its neighbours. In 2011, consumption amounted to 2.5 billion litres, says Euromonitor International. By 2015, the average beer consumption per capita is expected to reach 45-47 litres. Remarkably, it has surpassed two of the region’s top beer consumers, Thailand and the Philippines.

At about 91.5 million, the population of Viet Nam is growing steadily at 1% per annum, and projected to reach 100 million by the year 2025. It is also a country with a young demographic, with 31 million between the ages of 20 and 40, and the average age, 28.

And with one of the fastest growing economies in Asia, disposable incomes are improving. From 2002 to 2011 the GDP growth was averaging about 7%.

With such a profile, Viet Nam is quite the market for beer brewers. Everyone wants a piece of the local beer market, and it can be easy for foreign suppliers to get in. Despite their price, imported beer brands like Sapporo, San Miguel, Fosters and Budweiser sell well in Viet Nam. But local brew is still preferred.

The biggest local competition

According to a report from the Viet Nam Ministry of Industry and Trade, the beer industry grew at about 13% on average between the years 2001 and 2007. The main local manufacturers are Sabeco and Habeco, both of which are subsidiaries of the state-run company VINABECO but operate as competitors in the marketplace.

The force to reckon with is Sabeco (Saigon Beer Alcohol Beverage Corporation). Based in Ho Chi Minh City, it is a well-diversified group in itself and has the advantage of also being the logistics and warehouse services partner of several Vietnamese restaurants, hotels, and road and waterway transport services.

The group started in 1977 when Southern Wine Beer Company merged with Cholon Brewery to form Saigon Brewery. In 1981, however, Southern Wine Beer Company became Union Alcohol Beverage Enterprise II, and in 1988, Saigon Brewery became an autonomous division of Union Alcohol Beverage Factory II. Saigon Brewery grew rapidly, so that between 198Air Max 95 20th Anniversary