Vietnam beats China on soft drink growth rates

By Guy Montague-Jones

- Last updated on GMT

Related tags Soft drinks Coffee Tea Vietnam

Vietnamese soft drinks consumption has held up in the face of the global recession with growth levels higher even than neighbouring China, according to new market research.

Few parts of the world have been left unscathed by the global economic slump but Vietnam has continued to post high growth rates. Real GDP in 2009 was just over 5 per cent, just slightly down on the 6.2 per cent recorded the previous year.

In this favourable economic environment, beverage research specialists Canadean said soft drinks consumption in Vietnam grew 16 per cent.

Growth comparison

Growth outpaced that of neighbouring China, albeit from a smaller base. Per capita consumption in Vietnam is still about 19 litres whereas it is heading towards 40 litres in China and the global figure is just less than 80 litres.

Investment in advertising and marketing has made a major contribution to growth in Vietnam. According to Canadean, spending on soft drinks advertising last year was surpassed only by food, telecoms and hygiene and beauty. The Tan Hiep Phat Beverage Group in particular spent heavily last year to support its soft drink brands.

Iced tea domination

Unlike most other countries where carbonates dominate the soft drinks aisles, in Vietnam the leading category is iced teas which account for a third of sales.

Herbal teas have also risen in popularity recently as interest in products with health and wellness attributes grows, especially in cities where disposable income is rising.

Looking forward, Canadean said volumes will increase in double digits again this year and that there remains plenty of slack in the market.

It concluded: “The youthful consumer age profile and the tropical climate should facilitate many years of future growth for the Vietnamese soft drinks industry; the only dark cloud will be economic.”

Related topics Markets