PETpla.net Insider 06 / 2010

REGIONAL MARKET REPORTS 11 PET planet insider Vol. 11 No. 06/10 www.petpla.net with the food and beverage sector accounting for more than 50% of total consumption. This year the economy is expected to grow at up to 6.5%, with food processing and packaging ranked among the fastest growing sectors. Generation shift in drinking behaviour With about 90 % of the population being Vietnamese the country is very homogenous from an ethical standpoint. A high proportion (56%) of the population is in the work- force, i.e. between 19 and 64 years old. And 38% is under the age of 19. This is a major factor in the anticipated con- tinued growth in consumer spending. And there is also a generation shift in drinking behaviour, with younger people going for RTD teas and pre- packed soft drinks. Soft-drinks with double-figure growth Vietnam is the only coun- try in SEA that has a higher beer consumption per capita than soft-drinks. However, in 2009 the consumption of soft-drinks showed double- figure growth again. Most companies are located in the southeastern Binh Doung province, next to the north of Ho Chi Minh City. Only recently the first manufac- turers have started to move equipment to the northern provinces around the capital Hanoi (estimated population 6.5 million), and surrounding provinces. Multinational companies dominate the water market. La Vie of Nestlé is the best- selling bottled water, followed by Aquafina (Pepsi) and Joy (Coke). The water market has the highest PET penetra- tion, i.e. virtually 100% is bot- tled in PET. The multinational com- panies also dominate the CSD market. Until 2003 there was a steady growth in this sector, but since then the market has declined. Vietnam is already showing a trend from CSDs to other healthier drinks, such as teas and juices. Pepsi (Cola, 7-up, Mirinda) and Coke (Cola, Sprite, Fanta) are cur- rently the dominant drinks on the CSD market, which is expected to continue to be the case as there is basically no serious local competi- tion. Pepsi and Coke also control the functional drinks sub-category. Over the next few years the CSD market is expected to grow, but not to the same extend as other sectors. Flavoured teas are very popular in Vietnam. The annual consumption of RTD teas approached 50 million litres in the year 2009 and is the domain of local and Asian compa- nies. The “Zero Degree Green Tea” (THP Group) and the “C2 Cool & Clean” (Universal Robina Corp) alone account for about 75% of this sector. Here Western companies have not been able to gain a foothold and are believed to have a share of less than 10%.