As part of Heineken’s plans for global market expansion, the company has acquired a brewery located in Ba Ria Vung Tau province, Vietnam from rival Carlsberg in anticipation of expected growth in the country’s beer market.
Bloomberg reports that Vietnam is expected by economists to be one of the world’s fastest growing economies in 2016 due to a burgeoning manufacturing sector. In addition, the country’s booming cafe and bar culture, its growing middle class, and a young population where drinking age consumers of 18 and older are expected to reach 72.4 million by 2021 – up from 68.7 million this year, all factor into driving unprecedented growth in the country’s beer market.
“The growth of the beer market in Vietnam over the past few years is nothing short of amazing, and it shows no sign of slowing down,” Andy Ho, managing director of $1.5 billion VinaCapital in Ho Chi Minh City told Bloomberg.
The Vietnam Beer Alcohol Beverage Association states that between 2010 and 2015 beer consumption in Vietnam jumped by 40 percent, while consumption is expected to jump from 3.88 billion liters in 2015 to 4.04 billion liters this year, according to Euromonitor International.
“Of the total alcohol consumed in Vietnam, 94% is beer, so it is really part of the Vietnamese culture,” said Leo Evers, managing director of Vietnam Brewery Limited (VBL), a joint venture between Heineken and Vietnam’s Saigon Trading Group, which as of August 1 has been renamed Heineken Vietnam Brewery (HVB).
“Walk into any restaurant or bar and you’ll notice that everyone is drinking beer,” Evers told Managing Asia.
Riding this wave of growth, VBL has seen its capacity increase fifteen times over the past 25 years of operating in the country according to CNBC, while global rivals, including Anheuser-Busch InBev, SABMiller, and Carlsberg, have all established a presence in the country, vying for market share.
Currently the third largest beer market in Asia, Heineken has announced that Vietnam is one of the top three countries in Asia, along with Cambodia and Indonesia, that have the greatest potential for growth, according to Vietnam Economic Times.
Heineken CEO and chairman Jean-François van Boxmeer told Foodbev, “Whilst Africa, Middle East & Eastern Europe continued to be challenging, performance was strong in some key developing markets such as Vietnam and Mexico.”
—
Lynda Kiernan
The post Heineken Buys Carlsburg Brewery in Booming Vietnam Market appeared first on Global AgInvesting.