Tuesday, August 22, 2017 - 4:59:03

Foreign breweries tap Vietnam’s draught beer market

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Facing fierce competition in the packaged beer market, foreign breweries are migrating towards draught beer, with pubs and beer gardens springing up as fast as mushrooms throughout urban Vietnam, radio The Voice of Vietnam (VOV) reported.

In early June, Dutch beer giant Heineken launched a multi-million dollar marketing campaign aimed at branching the market out beyond the bottle in local pubs, beer gardens, hotels, restaurants and bars in Ho Chi Minh City with a wide selection of its draught beer products.

Without revealing too many details, including sales volume or profits, a Heineken representative said that the results were positive and the company is forging onward and upward with plans to open an additional 11 outlets in Ho Chi Minh City and eight in Hanoi.

Sapporo, Japan’s fourth largest brewer by volume, and the only Japanese brewer that actually produces and sells its beer in Vietnam, actually entered the draft beer market two years earlier than Heineken.

However, due to lackadaisical management the company dropped the ball on building brand awareness and only recently launched a major marketing campaign and began investing heavily in shoring up its distribution channels.

“The company has stepped up installation of new state-of-the-art brewing equipment, including everything from the latest in machinery to wash and sterilise empty casks much quicker to more streamlined beer taps,” a representative said.

They have pulled out all the stops and are pumping tens of thousands of US dollars into training hundreds of sellers from restaurants, bars, golf courses and beer gardens throughout the country on everything they need to know about the draught beer business, the representative added.

“As a result, the fresh beer business is bubbling with new establishments and fresh beer sales are foaming for thousands of patrons at restaurants, bars, golf courses and beer clubs across Vietnam.”

With pubs developing well, Sapporo’s fresh beer sales have increased twofold in the past year and expectations are high the fast pace growth will continue in the coming time, the representative added.

“This year, the company’s sales are forecast to double against 2013 for all of its products, including draft beer. Currently, Ho Chi Minh City has 60 beer gardens and Sapporo’s fresh beer is present in most all of them.”

Sapporo is contemplating a massive nationwide expansion campaign in the future. The company has set its sights on bumping up production output from 40 million litres to 150 million litres by 2019.

Only a handful of domestic breweries announced plans to launch into the fresh beer market. However, with limited investment and market savviness, their results can be described as lacklustre to mixed at best.

Two years ago, Halida, owned by Carlsburg Indochina, a well-known beer in the Vietnamese market, made a valiant effort to distribute fresh beer and break into the market but their efforts fell flat in spite of a fairly elaborate marketing and advertising campaign.

Most recently, in mid-May 2014, the Hanoi-Hai Duong Brewery Company launched its draft beer under the brand name – Hai Duong – in the market, touting it as the company’s highest-quality product.

It reportedly has capacity for an output of 75,000 kegs of beer, or 150,000 litres of beer, a month, which would generate 2.4 billion VND in sales.

Two-litre kegs of the intoxicating brew have been selling well in Hai Duong, Hung Yen, Bac Ninh and Bac Giang provinces and Hai Phong city.

Saigon Beer-Alcohol-Beverage Joint Stock Corporation (SABECO) has largely ignored the draught beer market. A senior executive of Sabeco said the profits in the market are not attractive, as it has too few potential customers.

Tan Hiep Phat Trading and Service Co. Ltd failed in launching bottled Lazor fresh beer in late 2003, but after investing significant US dollars, its beer sales went flat and the beer remains largely unsalable.

President of the Vietnam Beer-Alcohol and Beverage Association Nguyen Van Viet said that Vietnam’s fresh beer market is bustling and investing in fresh beer is a way of businesses to diversify products.

To date, packaged beers, either by can or bottle, have been the number one seller, earning huge profits for businesses. In the future, the draught beer market could well explode, he noted.-VNA
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