Vietnam’s beer market is adjusting to challenging economic conditions, with breweries and brewers finding creative ways to weather the storm and maintain customer loyalty.
The beer market in Vietnam, historically driven by unique craft brews and global demand, has undergone significant shifts. Economic challenges have caused consumers to opt for budget-friendly lagers, leading both international brewers and local craft beer companies to reassess their strategies.
C-Brewmaster, a Vietnamese craft beer company known for its eclectic beer flavours ranging from mulberry to coffee and even pho noodles, used to draw crowds of eager customers. However, the global economic downturn has strained Vietnam’s export-dependent economy, affecting consumer spending. The nation, ranking third in Asia for both trade reliance and beer consumption, faced challenges.
In response to these challenges, C-Brewmaster has reduced beer prices by 20% at its tap rooms in Hanoi and Ho Chi Minh City to retain customers. Other craft beer companies in Vietnam’s emerging sector have also introduced customer retention strategies. BiaCraft, for instance, has partnered with new brands to increase exposure to its “artisan ales” and initiated promotions like “Toss the Boss,” a game where customers predict the outcome of a coin toss to win a free drink.
To counteract declining discretionary spending among locals, breweries such as East West and Heart of Darkness have focused on serving more tourists. They are adapting to a shift in consumer demand for lower-cost beverages while also concocting new concoctions to spark consumer interest. Even Heineken has recorded a decline in sales of its premium brands but is seeing increased demand for its more affordable Tiger and Bia Viet options. The company has even launched a beer infused with Korean spirit soju.
Although Vietnamese consume more beer by total volume than most other Asian nations, the country is also experiencing a 5.5% year-on-year decline in beer consumption. Despite the surge in craft beer entrepreneurship, large corporations continue to dominate the market.
One reason for Vietnam’s high beer consumption is the preference for light, refreshing drinks suitable for the tropical climate and excessive consumption, particularly lagers and diluted brews. However, recent economic challenges have disrupted this trend.
The economic downturn, driven by factors like real estate instability, reduced exports, and a corruption crackdown, has led to layoffs, reduced consumer optimism, and decreased disposable income. Stricter regulations and taxes related to drunken driving have also contributed to the decline in beer consumption.
The impact of the economic downturn extends across the brewing industry, from major brewers like Sabeco to smaller players like Saigon Fresh Beer Equipment. The downturn has resulted in reduced orders for kegs and chillers, leaving many brewers and equipment suppliers facing challenging times.
As the nation grapples with these economic headwinds, Vietnam’s beer market is evolving to cater to shifting consumer preferences, demonstrating its resilience in the face of adversity.
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