Heineken has ambitious plan for Vietnam. The brewer that already holds the number 2 position in Asia’s third-largest beer market wants to overtake market leader Sabeco which was recently privatized.
From humble beginnings in Vietnam with only 20 employees in 1991, Heineken Vietnam has grown steadily and employs now more than 3,500 employees.
“We aim for the No. 1 position, not only in profit but also in volume,” Leo Evers, managing director of Heineken Vietnam told Reuters in an interview. Heineken Vietnam's turnover has grown at a double-digit rate over the last four years, and the country is the second largest source of profit after Mexico. Analysts estimate that Vietnam accounts for more than 10% of the EUR 3.87 billion (USD 4.3 billion) Heineken earned last year. Heineken's total market share has risen from 20% in 2013 to 31%, according to data from GlobalData Data Analysis Company, which comes close to the estimated slightly over 40 percent of Sabeco,
The Dutch brewer reported earlier this year high-single digit growth, driven by mid-tier Tiger brand and lower-priced Larue brand (inside.beer, 24.4.2019). In March, Heineken also updated the packaging of its signature Heineken brand and launched a lighter (4% ABV as opposed to the 5% of normal Heineken) and milder version especially destined for the Vietnamese market, called Heineken Silver.
With a growing population of nearly 100 million people and a beer market growth of 6.6 percent over the last six years, Vietnam is an interesting market for global brewing groups.
Next to Heineken and Carlsberg, which are already operating in this market for a long time, other players have recently entered the market or going to enter it soon.
In September 2016, the Vietnamese government announced to divest all of its shares of the state-owned breweries Sabeco and Habeco (inside.beer, 4.9.2016). Finally in December 2017, Thai Beverage (ThaiBev), a major brewing company from Thailand was able to buy a majority share in Sabeco (inside.beer, 18.12.2017). The privatization of Habeco, however, is dragging on due to internal problems of the state-owned company and special provisions of the contract with Carlsberg which holds already a 17.51% stake in the company and casts an eye on at least 51% of the shares of Habeco (inside.beer, 8.9.2017). Market share of Habeco has hence decreased from nearly 20 percent in 2010 to 18 percent by the end of 2017.
Last week, San Miguel Food and Beverage (SMFB), the largest food and beverage company in the Philippines, also confirmed plans to put up a new 2 million hl brewery in Ho Chi Minh, Vietnam.