Soft Drink Market - Are there Still Opportunities?

The Vietnamese soft drink market is witnessing severe competition among beverage companies in the country. More and more enterprises have poured money into this market and more varieties of products have been turned out to satisfy diversified consumer demand. The food and drink market has become especially active with the end of the year in sight, and a seminar on the drink market has just opened.

 

At the meeting, the representative of the Taylor Nelson Sofrees Co. (TNS) presented lots of interesting information about consumption market trends, consumers’ thoughts and tastes and social needs for the time being. A recent survey on the Vietnamese drink market showed that 70 per cent of Vietnamese people worried about their health, 95 per cent were very concerned about food safety and hygiene issues and 93 per cent tried to eat and drink in the ways that they think are good for their health. As a result, in order to remain healthy, 92 per cent of consumers read product information carefully before use. As for drinks, 80 per cent of people liked buying those containing ginseng, vitamins and calcium.

 

Previously, consumers only paid attention to drinks that met the essential needs of their bodies but now they need products with more criteria. They look carefully into product packs, flavours and convenience. Prices of products are no longer their top concerns. Busy dwellers in urban areas are very interested in convenient and delicious products. They love products that need the least time to process. They prefer drinking wine without pouring it into a cup. The TNS survey also showed that 50 per cent of people said instant drinks save time, 31 per cent said they had quick meals and 57 per cent preferred products with convenient packs.

 

There are now many kinds of soft drinks made from plentiful flavours and stored in different containers on offer. According to the TNS survey, there were more than 200 drink labels entering the Vietnamese market within one year. Yoghurt and fruit juices were among the instant products with the most labels. At present, dairy companies have added various vitamins and minerals to satisfy the demand for healthy and tonic drinks. In the meantime, food and drink companies have also introduced products for specific groups of people: children, the elderly, people on diets and the youth. In addition, they have also added flavours (such as fruit flavours) to their products in order to raise appetites. Canned fruit juices come in many varieties, ranging from orange and strawberry to peach, guava, banana, mango, custard apples and lemon. Previously, there were a few instant fruit powders like Thailand’s Tang, Coca Cola’s Sunfill, Lipton or Nesta. However, at the moment, local companies are producing various kinds of fruit powders. These products are very convenient because drinkers only need to tear them open, pour into cups of waters, add some ice and enjoy their tasty drinks. Food and drink companies are also producing soda drinks, instant teas, tonic drinks and canned drinks.

 

Apart from product varieties, advertisement is also playing an important role in affecting consumption trends. If in 2004, only seven per cent of drinks were sold under the effect of advertisements or through sales promotions, in 2005, 11 per cent of drinks were sold through these channels. As a result, more and more enterprises have launched attractive and meaningful advertisement activities for their products. They not only pay attention to securing quality, appetite, and convenience but also expose new arguments for their products in order to orient consumers’ decisions. As for products for children, they use popular cartoons or famous figures as effective marketing tools for their products.

 

However, according to experts, Vietnam is still a market with great potential. The survey said 73 per cent of Vietnamese people drink fruit juices but only 18 per cent drank canned crushed fruits, 67 per cent drank coffee but only 15 per cent used instant coffee, and 80 per cent drank tea but only 17 per cent used instant tea. Nonetheless, major drinks are processed manually, lack flavour and quality, safety and hygiene checks. Therefore, enterprises have great chances to increase processed and packed drinks. The core issue here is to have suitable investment and development strategies to satisfy all the demands of consumers, who may have different tastes. Besides, enterprises should also pay attention to advertising easy-to-remember products and widen their easy-to-buy distribution networks.