Foreign breweries tap Vietnam’s draught beer market

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.
Facing fierce competition in the packaged beer market, foreign breweriesare migrating towards draught beer, with pubs and beer gardensspringing up as fast as mushrooms throughout urban Vietnam, radio TheVoice of Vietnam (VOV) reported.

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

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

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

However, due to lackadaisical management thecompany dropped the ball on building brand awareness and only recentlylaunched a major marketing campaign and began investing heavily inshoring up its distribution channels.

“The company hasstepped up installation of new state-of-the-art brewing equipment,including everything from the latest in machinery to wash and steriliseempty casks much quicker to more streamlined beer taps,” arepresentative said.

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

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

With pubs developing well, Sapporo’sfresh beer sales have increased twofold in the past year andexpectations are high the fast pace growth will continue in the comingtime, the representative added.

“This year, the company’s salesare forecast to double against 2013 for all of its products, includingdraft beer. Currently, Ho Chi Minh City has 60 beer gardens andSapporo’s fresh beer is present in most all of them.”

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

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

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

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

It reportedly has capacityfor an output of 75,000 kegs of beer, or 150,000 litres of beer, amonth, which would generate 2.4 billion VND in sales.

Two-litrekegs of the intoxicating brew have been selling well in Hai Duong, HungYen, Bac Ninh and Bac Giang provinces and Hai Phong city.

SaigonBeer-Alcohol-Beverage Joint Stock Corporation (SABECO) has largelyignored the draught beer market. A senior executive of Sabeco said theprofits in the market are not attractive, as it has too few potentialcustomers.

Tan Hiep Phat Trading and Service Co. Ltd failed inlaunching bottled Lazor fresh beer in late 2003, but after investingsignificant US dollars, its beer sales went flat and the beer remainslargely unsalable.

President of the Vietnam Beer-Alcohol andBeverage Association Nguyen Van Viet said that Vietnam’s fresh beermarket is bustling and investing in fresh beer is a way of businesses todiversify products.

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

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