Vietnam Demand for High-end Beer Seen to Rise by 2020: Sapporo Vietnam CEO

Tuan Minh - Tran Thuy

15:16 22/01/2016

BizLIVE - Demand for high-end and near high-end beer in Vietnam is expected to rise sharply by 2020 and competition in this fast-growing market will become tougher, CEO Mikio Masawaki of Sapporo Vietnam Limited told BizLIVE.

Vietnam Demand for High-end Beer Seen to Rise by 2020: Sapporo Vietnam CEO

Mikio Masawaki, CEO of Sapporo Vietnam Limited.

Japan’s Sapporo Holdings Ltd last October acquired 29% holding in Sapporo Vietnam (SVL) from its partner, state-owned tobacco corporation Vinataba, turning the joint venture firm into Sapporo’s wholly-owned subsidiary in a move to widen its reach in Vietnam’s beer market.
SVL’s plant came into operation in November 2014, but the firm is yet to earn a profit as it is focusing on building its brand name.
In an interview with BizLIVE, Mikio Masawaki, CEO of SVL, talks about the company’s operations and future plans.
Which market share does Sapporo Vietnam take in this market?
We suppose that we are in the third place in Ho Chi Minh City, after Sabeco and Vietnam Brewery Limited (VBL) [which owns a portfolio of beers such as Heineken, Tiger and Biere Larue]. We don’t have specific statistics on market share.
Sapporo’s market share in Vietnam remains modest, but we are penetrating into out target segments.
Could you share about the firm's business strategy in the time to come?
We plan to expand our distribution network. As per our survey, Sapporo now makes up a 10% market share at restaurants and hotels in downtown HCM City.
Sapporo targets the figure to double in 2016. We are taking steps to increase the number of points of sales to 7,000 from 4,000 currently and expand our reach to Da Nang and Nha Trang.
Generally speaking, we are focusing on enhancing the Sapporo image in each segment and widen it to other segments. That’s Sapporo’s long-term vision in Vietnam.
How is Sapporo Vietnam positioned in the competition with other brewers?
Brewery companies are competing fiercely among other to retain their market shares, especially in high-end segments such as Sapporo, Heineken and Budweiser.
As the latter two are global leaders and have strong financial positions, competing with them is never easy. However, with more than 140 years of existence and a specific niche, we are confident that we will win clients’ support.
A number of foreign brewers have chosen to expand their foothold here by acquiring domestic firms. Will Sapporo Vietnam take the same path?
We are now not interested in buying in shares of Vietnamese companies.
How do you assess the potential of Vietnam’s beer market?
Vietnam’s beer market has had a rapid growth pace over the past five to 10 years. However, the pace is expected to be stable, at 7%-8% per year.
Vietnam’s GDP is forecast to grow 6.5%-7% in the next five years. According to an AC Nielsen survey, the number of middle-income earners will increase from eight million in 2012 to around 40 million in 2020. This is a factor that will help boost the high-end beer segment.
The share of high-end beer will likely rise to 70% by 2020 from 55% currently. It means that consumers tend to choose high-quality and safe products.
How do you see Vietnam’s beer market in the years to come?
The beer market in Vietnam will certainly become tenser, which, in turn, will help diversify the market and bring more novelties for customers.
We expect the Vietnamese government to create a transparent business environment and protect rights of legitimate enterprises.
Thank you very much!