BABY FOOD IN VIETNAM

Euromonitor International
August 2018
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LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Prospects ..................................................................................................................................... 1
Breastfeeding Habits Determine the Consumption of Milk Formula.......................................... 1
New Product Development Needs To Offer More Value To Vietnamese Consumers .............. 1
Differing Needs in Urban and Rural Areas................................................................................ 2
Competitive Landscape ................................................................................................................ 2
Increasing Saturation in Baby Food .......................................................................................... 2
Domestic Players Understand Consumer Preferences............................................................. 2
the Competition Is Set To Increase........................................................................................... 2
Category Data .............................................................................................................................. 2
Table 1 Sales of Baby Food by Category: Volume 2013-2018.................................. 2
Table 2 Sales of Baby Food by Category: Value 2013-2018 .................................... 3
Table 3 Sales of Baby Food by Category: % Volume Growth 2013-2018 ................. 3
Table 4 Sales of Baby Food by Category: % Value Growth 2013-2018 .................... 4
Table 5 NBO Company Shares of Baby Food: % Value 2014-2018 ......................... 4
Table 6 LBN Brand Shares of Baby Food: % Value 2015-2018 ................................ 5
Table 7 Distribution of Baby Food by Format: % Value 2013-2018........................... 6
Table 8 Forecast Sales of Baby Food by Category: Volume 2018-2023................... 6
Table 9 Forecast Sales of Baby Food by Category: Value 2018-2023...................... 7
Table 10 Forecast Sales of Baby Food by Category: % Volume Growth 2018-
2023 ............................................................................................................. 8
Table 11 Forecast Sales of Baby Food by Category: % Value Growth 2018-
2023 ............................................................................................................. 8

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BABY FOOD IN VIETNAM

HEADLINES
 Baby food in Vietnam increases by 4% in retail volume terms and by 5% in current value
terms in 2018, to reach 113,000 tonnes and VND33.6 trillion
 Milk formula continues to see a slowdown in volume growth, due to mothers’ increasing
preference for breastfeeding
 Prepared baby food sees the fastest current value growth of 17% in 2018, reaching
VND213.5 billion
 The average unit price of baby food increases slightly in current terms in 2018
 Saigon Food’s strong performance demonstrates its understanding of the local market,
although Vietnam Dairy Products (Vinamilk) leads baby food with a 29% value share in 2018
 Baby food is expected to increase by a retail value CAGR of 1% at constant 2018 prices over
the forecast period, reaching VND34.7 trillion in 2023

PROSPECTS

Breastfeeding Habits Determine the Consumption of Milk Formula

In recent years, breastfeeding was a frequent discussion topic on social media in Vietnam,
and was promoted by the media as beneficial to babies’ development. With an increasing
emphasis on health and wellness and the consumption of products that are organic and safe to
eat, breastfeeding was increasingly popular over the review period. Milk formula therefore saw a
slowdown in volume growth in 2018, and this pattern is expected to continue over the forecast
period. To adapt to this trend, players in milk formula launched marketing activities or included
ingredients in their products to make the consistency and positioning of their milk formula even
more like breast milk. For example, Enfamil A+ by Mead Johnson Nutrition (Vietnam) contains
Milk Fat Globule Membrane (MFGM), which is found in breast milk. Over the forecast period, the
competition from breast milk is expected to continue, and it will be difficult for milk formula to
compete directly as a product substitute, as consumers become increasingly educated, wealthy
and aware about health and wellness. Manufacturers are expected to monitor the perception of
milk formula amongst consumers very closely, and may release milk formula that is
complimentary to breast milk to suit the needs of Vietnamese mothers.

New Product Development Needs To Offer More Value To Vietnamese

Consumers
In addition to the threat of being rendered obsolete by breast milk, milk formula and other
baby food products are expected to have to reposition themselves in the market to meet ever-
changing consumer demands, and to have a competitive advantage in the market. Previously,
Vietnamese mothers were keen to ensure that their babies developed physically, with chubby
babies considered healthy. However, the demand for products that contain calcium for bone
growth, DHA for brain development, etc. is increasing, as Vietnamese parents are now keen to
ensure that their babies have proper both mental and physical development. Over the forecast
period, it will be necessary to pack more nutrition into one product, given that consumers will be
actively looking for features such as brain development and digestion on product labels and
when asking for product recommendations.

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Differing Needs in Urban and Rural Areas

Whilst the birth rates in key cities such as Ho Chi Minh city and Ha Noi have slowed, the birth
rate in rural areas is still growing, and represents potential demand for baby food. Relevant
nutrition to target specific target consumers will be necessary over the forecast period, as
consumers in rural and urban areas in Vietnam will have differing needs, and manufacturers will
need to adjust to tap into this demand. For example, Nutifood Nutrition Food has seen success
with products specialising in malnutrition, as these cater to the demands of consumers in the
low- to middle-income segments, and are priced accordingly.

COMPETITIVE LANDSCAPE

Increasing Saturation in Baby Food

Baby food is becoming increasingly saturated, with the entry of numerous international
players over the review period. Only a few domestic manufacturers stand out, such as Vietnam
Dairy Products (Vinamilk), Nutifood Nutrition Food and the recently emerging Saigon Food.
Vinamilk, the leading player in dried baby food and milk formula, has used professional
marketing campaigns and its wide distribution network to gain traction in the market over the
years.

Domestic Players Understand Consumer Preferences

Conversely, Saigon Food may not share similar advantages of economies of scale to Vietnam
Dairy Products, but has used its knowledge of the market to drive effective business growth. Its
fresh porridge offering is disrupting prepared baby food, and its knowledge of Vietnamese taste
preferences and habits allowed its products to be successful over the review period.

the Competition Is Set To Increase

Over the forecast period, the competition in baby food is expected to intensify, as international
players continue to enter the market and as domestic players fight for their share of sales.
Although local knowledge can provide domestic manufacturers with the edge to succeed,
knowledge without good execution and the necessary operations to support products will not be
enough to succeed in Vietnam, and manufacturers which have expertise in both areas are likely
to succeed over the forecast period.

CATEGORY DATA
Table 1 Sales of Baby Food by Category: Volume 2013-2018

'000 tonnes
2013 2014 2015 2016 2017 2018

Dried Baby Food 11.5 12.5 13.5 14.5 15.6 16.8

Prepared Baby Food 0.4 0.4 0.4 0.5 0.5 0.5
Other Baby Food 0.0 0.0 0.0 0.0 0.0 0.0
Milk Formula 68.0 76.7 83.3 88.7 92.3 95.6
- Standard Milk Formula 6.1 6.6 6.6 6.6 6.6 6.5
-- Liquid Standard Milk - - - - - -
Formula
-- Powder Standard Milk 6.1 6.6 6.6 6.6 6.6 6.5

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Formula
- Follow-on Milk Formula 12.0 12.0 11.9 11.9 11.8 11.8
-- Liquid Follow-on 0.1 - - - - -
Milk Formula
-- Powder Follow-on 11.9 12.0 11.9 11.9 11.8 11.8
Milk Formula
- Growing-Up Milk Formula 49.9 58.1 64.7 70.2 73.8 77.4
-- Liquid Growing-Up 1.2 3.1 7.0 10.4 11.8 13.3
Milk Formula
-- Powder Growing-Up 48.7 55.0 57.6 59.8 62.0 64.0
Milk Formula
- Special Baby Milk - - - - - -
Formula
-- Liquid Special Baby - - - - - -
Milk Formula
-- Powder Special Baby - - - - - -
Milk Formula
Baby Food 80.0 89.6 97.2 103.7 108.4 113.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Baby Food by Category: Value 2013-2018

VND billion
2013 2014 2015 2016 2017 2018

Dried Baby Food 2,758.2 3,180.2 3,641.3 4,023.7 4,486.4 4,979.9

Prepared Baby Food 106.7 123.8 141.7 158.7 182.0 213.5
Other Baby Food 5.1 5.8 6.5 7.3 8.2 9.2
Milk Formula 20,359.9 23,921.8 25,117.4 26,440.3 27,408.1 28,441.6
- Standard Milk Formula 2,211.7 2,439.6 2,371.2 2,359.4 2,383.0 2,402.0
-- Liquid Standard Milk - - - - - -
Formula
-- Powder Standard Milk 2,211.7 2,439.6 2,371.2 2,359.4 2,383.0 2,402.0
Formula
- Follow-on Milk Formula 3,579.2 3,730.0 3,674.1 3,679.6 3,690.6 3,734.9
-- Liquid Follow-on 18.5 - - - - -
Milk Formula
-- Powder Follow-on 3,560.6 3,730.0 3,674.1 3,679.6 3,690.6 3,734.9
Milk Formula
- Growing-Up Milk Formula 14,569.0 17,752.2 19,072.1 20,401.4 21,334.5 22,304.6
-- Liquid Growing-Up 211.8 552.2 1,270.1 1,905.1 2,190.9 2,548.4
Milk Formula
-- Powder Growing-Up 14,357.2 17,200.0 17,802.0 18,496.3 19,143.6 19,756.2
Milk Formula
- Special Baby Milk - - - - - -
Formula
-- Liquid Special Baby - - - - - -
Milk Formula
-- Powder Special Baby - - - - - -
Milk Formula
Baby Food 23,229.9 27,231.5 28,906.9 30,630.0 32,084.7 33,644.1
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Baby Food by Category: % Volume Growth 2013-2018

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% volume growth
2017/18 2013-18 CAGR 2013/18 Total

Dried Baby Food 7.5 7.8 45.8

Prepared Baby Food 6.6 6.5 37.0
Other Baby Food 7.0 7.4 42.6
Milk Formula 3.6 7.0 40.5
- Standard Milk Formula -1.4 1.2 6.0
-- Liquid Standard Milk Formula - - -
-- Powder Standard Milk Formula -1.4 1.2 6.0
- Follow-on Milk Formula -0.6 -0.4 -1.9
-- Liquid Follow-on Milk Formula - - -
-- Powder Follow-on Milk Formula -0.6 -0.2 -1.1
- Growing-Up Milk Formula 4.8 9.2 54.9
-- Liquid Growing-Up Milk Formula 13.0 60.9 979.4
-- Powder Growing-Up Milk Formula 3.2 5.6 31.5
- Special Baby Milk Formula - - -
-- Liquid Special Baby Milk Formula - - -
-- Powder Special Baby Milk Formula - - -
Baby Food 4.2 7.2 41.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Baby Food by Category: % Value Growth 2013-2018

% current value growth

2017/18 2013-18 CAGR 2013/18 Total

Dried Baby Food 11.0 12.5 80.5

Prepared Baby Food 17.3 14.9 100.0
Other Baby Food 11.6 12.6 80.8
Milk Formula 3.8 6.9 39.7
- Standard Milk Formula 0.8 1.7 8.6
-- Liquid Standard Milk Formula - - -
-- Powder Standard Milk Formula 0.8 1.7 8.6
- Follow-on Milk Formula 1.2 0.9 4.4
-- Liquid Follow-on Milk Formula - - -
-- Powder Follow-on Milk Formula 1.2 1.0 4.9
- Growing-Up Milk Formula 4.5 8.9 53.1
-- Liquid Growing-Up Milk Formula 16.3 64.5 1,103.2
-- Powder Growing-Up Milk Formula 3.2 6.6 37.6
- Special Baby Milk Formula - - -
-- Liquid Special Baby Milk Formula - - -
-- Powder Special Baby Milk Formula - - -
Baby Food 4.9 7.7 44.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 NBO Company Shares of Baby Food: % Value 2014-2018

% retail value rsp

Company 2014 2015 2016 2017 2018

Vietnam Dairy Products 26.6 26.8 27.2 28.4 28.9

JSC (Vinamilk)
Abbott Vietnam Co Ltd 17.1 17.1 17.5 18.1 18.3
FrieslandCampina 13.1 12.6 12.3 12.4 12.3

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Vietnam Co Ltd
Nutifood Nutrition Food 10.2 10.9 11.2 11.6 11.8
JSC
Mead Johnson Nutrition 11.6 11.4 11.0 10.9 10.5
(Vietnam) Co Ltd
Nestlé Vietnam Ltd 8.9 8.7 8.6 8.8 8.9
Hipp GmbH & Co Vertrieb 1.2 1.3 1.4 1.5 1.6
KG
Meiji Holdings Co Ltd 1.2 1.2 1.2 1.2 1.2
Danone Dumex Vietnam Co 3.1 3.0 2.3 - -
Ltd
Kolinska dd - - - - -
Others 7.0 7.1 7.4 7.1 6.6
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 LBN Brand Shares of Baby Food: % Value 2015-2018

% retail value rsp

Brand (GBO) Company (NBO) 2015 2016 2017 2018

Dielac Vietnam Dairy Products 21.4 21.5 22.3 22.4

JSC (Vinamilk)
Nutifood Nutifood Nutrition Food 9.1 9.3 9.6 9.7
JSC
Similac (Abbott Abbott Vietnam Co Ltd 7.9 8.0 8.3 8.4
Laboratories Inc)
Friso (Royal FrieslandCampina 7.2 7.1 7.2 7.1
FrieslandCampina NV) Vietnam Co Ltd
Ridielac Vietnam Dairy Products 5.4 5.7 6.1 6.5
JSC (Vinamilk)
PediaSure (Abbott Abbott Vietnam Co Ltd 5.7 5.8 6.0 6.0
Laboratories Inc)
Enfagrow (Reckitt Mead Johnson Nutrition - - 5.1 4.9
Benckiser Group Plc (Vietnam) Co Ltd
(RB))
Nan (Nestlé SA) Nestlé Vietnam Ltd 4.6 4.5 4.5 4.3
Cerelac (Nestlé SA) Nestlé Vietnam Ltd 3.4 3.5 3.7 3.9
Grow (Abbott Abbott Vietnam Co Ltd 3.5 3.6 3.8 3.9
Laboratories Inc)
Dutch Lady (Royal FrieslandCampina 4.0 3.9 4.0 3.9
FrieslandCampina NV) Vietnam Co Ltd
Enfa (Reckitt Mead Johnson Nutrition - - 2.8 2.6
Benckiser Group Plc (Vietnam) Co Ltd
(RB))
Nuti Nutifood Nutrition Food 1.8 1.9 2.0 2.1
JSC
Hipp Hipp GmbH & Co Vertrieb KG 1.3 1.4 1.5 1.6
Meiji Meiji Holdings Co Ltd 1.2 1.2 1.2 1.2
Frisolac (Royal FrieslandCampina 1.2 1.2 1.2 1.1
FrieslandCampina NV) Vietnam Co Ltd
Lactogen (Nestlé SA) Nestlé Vietnam Ltd 0.7 0.7 0.7 0.7
Dutch Baby (Royal FrieslandCampina 0.2 0.2 0.1 0.1
FrieslandCampina NV) Vietnam Co Ltd
Enfagrow (Mead Mead Johnson Nutrition 5.3 5.1 - -
Johnson Nutrition Co) (Vietnam) Co Ltd
Enfa (Mead Johnson Mead Johnson Nutrition 3.2 2.9 - -
Nutrition Co) (Vietnam) Co Ltd

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Dumex (Danone, Danone Dumex Vietnam Co 3.0 2.3 - -

Groupe) Ltd
Gain (Abbott Abbott Vietnam Co Ltd - - - -
Laboratories Inc)
Bebi (Atlantic Kolinska dd - - - -
Grupa dd)
Bebi (Droga Kolinska dd - - - -
Kolinska dd)
Nestlé Gau (Nestlé Nestlé Vietnam Ltd - - - -
SA)
Others Others 10.0 10.3 10.1 9.6
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Distribution of Baby Food by Format: % Value 2013-2018

% retail value rsp

2013 2014 2015 2016 2017 2018

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 99.9

- Grocery Retailers 60.3 60.5 60.8 60.2 59.6 60.6
-- Modern Grocery 19.8 20.7 21.4 21.7 22.0 22.6
Retailers
--- Convenience Stores 0.2 0.2 0.3 0.3 0.4 0.5
--- Discounters - - - - - -
--- Forecourt Retailers - - - - - -
--- Hypermarkets 7.7 8.1 8.3 8.4 8.5 8.6
--- Supermarkets 12.0 12.4 12.8 13.1 13.1 13.5
-- Traditional Grocery 40.5 39.8 39.5 38.4 37.6 38.0
Retailers
--- Food/drink/tobacco - - - - - -
specialists
--- Independent Small 40.5 39.8 39.5 38.4 37.6 38.0
Grocers
--- Other Grocery - - - - - -
Retailers
- Non-Grocery Specialists 39.6 39.5 39.2 39.8 40.4 39.3
-- Health and Beauty 6.4 6.0 5.4 4.8 4.6 3.5
Specialist Retailers
-- Other Foods Non- 33.3 33.5 33.8 35.0 35.8 35.8
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing 0.0 0.0 0.0 0.0 0.0 0.1
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing 0.0 0.0 0.0 0.0 0.0 0.1
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 Forecast Sales of Baby Food by Category: Volume 2018-2023

'000 tonnes
2018 2019 2020 2021 2022 2023

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Dried Baby Food 16.8 18.0 19.4 20.7 22.2 23.8

Prepared Baby Food 0.5 0.6 0.6 0.6 0.7 0.7
Other Baby Food 0.0 0.0 0.0 0.0 0.0 0.0
Milk Formula 95.6 98.8 101.6 104.1 105.9 107.4
- Standard Milk Formula 6.5 6.4 6.3 6.1 6.0 5.8
-- Liquid Standard Milk - - - - - -
Formula
-- Powder Standard Milk 6.5 6.4 6.3 6.1 6.0 5.8
Formula
- Follow-on Milk Formula 11.8 11.7 11.6 11.5 11.3 11.2
-- Liquid Follow-on - - - - - -
Milk Formula
-- Powder Follow-on 11.8 11.7 11.6 11.5 11.3 11.2
Milk Formula
- Growing-Up Milk Formula 77.4 80.8 83.7 86.4 88.6 90.4
-- Liquid Growing-Up 13.3 14.8 16.1 17.4 18.5 19.4
Milk Formula
-- Powder Growing-Up 64.0 66.0 67.6 69.0 70.1 71.0
Milk Formula
- Special Baby Milk - - - - - -
Formula
-- Liquid Special Baby - - - - - -
Milk Formula
-- Powder Special Baby - - - - - -
Milk Formula
Baby Food 113.0 117.4 121.6 125.5 128.9 131.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Sales of Baby Food by Category: Value 2018-2023

VND billion
2018 2019 2020 2021 2022 2023

Dried Baby Food 4,979.9 5,313.6 5,658.9 6,015.5 6,388.4 6,778.1

Prepared Baby Food 213.5 232.5 253.4 276.4 301.9 329.9
Other Baby Food 9.2 9.8 10.4 11.0 11.6 12.2
Milk Formula 28,441.6 28,366.8 28,229.6 28,049.2 27,811.8 27,541.6
- Standard Milk Formula 2,402.0 2,327.6 2,253.1 2,178.7 2,104.7 2,031.0
-- Liquid Standard Milk - - - - - -
Formula
-- Powder Standard Milk 2,402.0 2,327.6 2,253.1 2,178.7 2,104.7 2,031.0
Formula
- Follow-on Milk Formula 3,734.9 3,637.8 3,546.8 3,461.7 3,385.6 3,317.8
-- Liquid Follow-on - - - - - -
Milk Formula
-- Powder Follow-on 3,734.9 3,637.8 3,546.8 3,461.7 3,385.6 3,317.8
Milk Formula
- Growing-Up Milk Formula 22,304.6 22,401.4 22,429.7 22,408.8 22,321.6 22,192.7
-- Liquid Growing-Up 2,548.4 2,803.2 3,027.5 3,239.4 3,401.4 3,537.4
Milk Formula
-- Powder Growing-Up 19,756.2 19,598.2 19,402.2 19,169.4 18,920.2 18,655.3
Milk Formula
- Special Baby Milk - - - - - -
Formula
-- Liquid Special Baby - - - - - -
Milk Formula
-- Powder Special Baby - - - - - -
Milk Formula

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Baby Food 33,644.1 33,922.6 34,152.3 34,352.1 34,513.6 34,661.8

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Sales of Baby Food by Category: % Volume Growth 2018-2023

% volume growth
2018/19 2018-23 CAGR 2018/23 Total

Dried Baby Food 7.4 7.2 41.6

Prepared Baby Food 6.7 6.9 39.6
Other Baby Food 6.9 6.7 38.3
Milk Formula 3.3 2.4 12.3
- Standard Milk Formula -1.6 -2.1 -9.9
-- Liquid Standard Milk Formula - - -
-- Powder Standard Milk Formula -1.6 -2.1 -9.9
- Follow-on Milk Formula -0.7 -1.0 -4.9
-- Liquid Follow-on Milk Formula - - -
-- Powder Follow-on Milk Formula -0.7 -1.0 -4.9
- Growing-Up Milk Formula 4.4 3.2 16.8
-- Liquid Growing-Up Milk Formula 11.0 7.8 45.4
-- Powder Growing-Up Milk Formula 3.0 2.1 10.8
- Special Baby Milk Formula - - -
-- Liquid Special Baby Milk Formula - - -
-- Powder Special Baby Milk Formula - - -
Baby Food 4.0 3.2 16.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Baby Food by Category: % Value Growth 2018-2023

% constant value growth

2018/2019 2018-23 CAGR 2018/23 Total

Dried Baby Food 6.7 6.4 36.1

Prepared Baby Food 8.9 9.1 54.6
Other Baby Food 6.4 5.8 32.8
Milk Formula -0.3 -0.6 -3.2
- Standard Milk Formula -3.1 -3.3 -15.4
-- Liquid Standard Milk Formula - - -
-- Powder Standard Milk Formula -3.1 -3.3 -15.4
- Follow-on Milk Formula -2.6 -2.3 -11.2
-- Liquid Follow-on Milk Formula - - -
-- Powder Follow-on Milk Formula -2.6 -2.3 -11.2
- Growing-Up Milk Formula 0.4 -0.1 -0.5
-- Liquid Growing-Up Milk Formula 10.0 6.8 38.8
-- Powder Growing-Up Milk Formula -0.8 -1.1 -5.6
- Special Baby Milk Formula - - -
-- Liquid Special Baby Milk Formula - - -
-- Powder Special Baby Milk Formula - - -
Baby Food 0.8 0.6 3.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

© Euromonitor International