CHOCOLATE CONFECTIONERY IN VIETNAM - ANALYSIS

Country Report | Sep 2020

KEY DATA FINDINGS Market Sizes

COVID-19 has a limited impact in 2020 as the country copes well with the pandemic Sales of Chocolate Confectionery
and distribution channels remain open Retail Value RSP - VND billion - Current - 2006-2025
In 2020 retail sales grow by 10% in current value terms and 4% in volume terms to
reach VND2.9 trillion and 6,100 tonnes 2,854 Forecast
5,000
Tablets sees the highest retail current value sales growth of 13% in 2020
The average retail current unit price rises by 6% in 2020
4,000
Mars leads with a 13% retail value share in 2020, although the competition increases
from local and international players
3,000
An 11% retail current value CAGR (6% 2020 constant value CAGR) is expected over
the forecast period
2,000
2020 IMPACT
COVID-19’s effect is limited by the ongoing availability of key retail 1,000
distribution channels
Vietnam has coped relatively effectively with the outbreak of the global Coronavirus 0
2006 2020 2025
(COVID-19) pandemic. From early May 2020 social isolation measures were being lifted
and businesses and schools reopened, although bars and entertainment venues
remained closed and restaurants had to observe strict social distancing regulations.
Lockdown leading to home seclusion, as consumers worked from home and schools Sales Performance of Chocolate Confectionery
closed, has had a slightly negative short-term impact on sales of chocolate % Y-O-Y Retail Value RSP Growth 2006-2025
confectionery. Impulse categories are expected to be affected more adversely, such as
single portion ice cream and countlines, with consumers prioritising rice, edible oils
and instant noodles to consume over a longer period.
9.7% Forecast
20%
The increase in purchases of staples and cooking ingredients owes less to stockpiling,
as food consumption norms are expected to be relatively constant, and more to a shift
from being outside the home and dining out to at-home measures and home-cooking. 15%
Food delivery is not widely familiar or available in Vietnam, and is more costly, which
discourages Vietnamese consumers, who tend to be cost-conscious. Moreover, grocery
retailers have remained opened, so consumers have been able to access chocolate
confectionery during the social isolation period. Many consumers are also likely to have 10%
seen chocolate confectionery as an affordable indulgence or luxury to help while away
time sent at home and relieve stress and anxiety during lockdown. As a result,
chocolate confectionery is predicted to see only a marginally slower rise in retail
volume sales over 2020 as a whole, compared with 2019. Retail current value growth is 5%
expected to be slower than in 2019, but still faster than retail volume growth in 2020, as
average retail current unit prices rise for these indulgence products.
0%
Convenience stores benefits from desire for convenience and 2006 2020 2025
accessibility during COVID-19
Although there is expected to be a slight shift in purchasing behaviour regarding where
consumers buy their food, they continue to be able to buy chocolate confectionery
from supermarkets and traditional grocery retailers like independent small grocers and
food/drink/tobacco specialists. E-commerce plays a small role in the distribution of
chocolate confectionery, and packaged food overall, owing to issues ranging from
transportation to affordability to consumer mentality regarding food purchases.
Therefore, any change in buying patterns due to COVID-19 is expected to be minimal.
Nonetheless, the expansion of modern retailing with more stores and wider coverage
is a source of growth for chocolate confectionery, which cannot be stored suitably in
hot temperatures in traditional grocery outlets, which tend to lack air conditioners.
Consumers appreciate the services and trust the quality of products on offer from
modern grocery retailers, especially in urban areas.
While many consumers buy chocolate confectionery as part of their monthly or weekly
shop in a supermarket, the impulse nature of purchases of such products retains strong
demand from more local, traditional grocers. Convenience stores has benefited from
the impulse character of purchases, as these are often based in or around residential
neighbourhoods like traditional counterparts. This is expected to see convenience
stores and traditional grocery retailers gain retail value shares over 2020 as a whole,
supported by consumers being unable or unwilling to venture too far from home during

© Euromonitor Interna onal 2020 Page 1 of 3

the COVID-19 lockdown.
Sales of Chocolate Confectionery by Category
Retail Value RSP - VND billion - Current - 2020 Growth Performance
Growing presence and quality of local brands presents share growth
obstacles to global players Chocolate Pouches and Bags
362.1
Mars is expected to remain the leading player in retail value share terms over 2020 as a Boxed Assortments
whole. The company’s strong portfolio in chocolate confectionery, including global 1,367.7
brands like M&M’s and Snickers, continues to enjoy popularity among local consumers, Chocolate with Toys
who trust the quality and taste of Mars’s products. Mars’s wide range of products is -
officially distributed by Mars Vietnam, although some Mars products are imported Countlines
unofficially. Moreover, the competitive environment is intensifying, and Mars’s mainly 416.5
premium offer has come under threat during COVID-19 as consumers try to tighten Seasonal Chocolate
their budgets in the face of heightened economic uncertainty. -

Nestlé Vietnam’s Kit Kat is expected to remain the leading brand over 2020 as a whole. Tablets
708.2
The brand enjoys high recognition and a strong presence across the country. Kit Kat is a
top-of-mind chocolate confectionery brand for many consumers in Vietnam, and Nestlé Other Chocolate Confectionery
-
has invested in marketing and promotion to consolidate its appeal. One of the ways in
which Kit Kat has remained top-of-mind is through an active Facebook page. It is more 0% 10% 15%
difficult to find competitors employing both above- and below-the-line marketing CHOCOLATE CONFECTIONERY 2,854.4 CURRENT % CAGR % CAGR
activities to support their brands. Kit Kat is highly prominent across traditional and YEAR % 2015-2020 2020-2025
modern grocery channels, which stock its variety of options suitable for GROWTH

different occasions, from bite-sized packs for snacking to boxes as gifts for the Lunar
New Year or Valentine’s Day. However, like Mars, Nestlé’s Kit Kat faces challenges to
share growth through higher prices and the rising competition in the category, Competitive Landscape
including from local players.
Local manufacturers are stepping up their efforts to increase their competitiveness. In Company Shares of Chocolate Confectionery
2020, many brands by local manufacturers, such as Vietnamcacao, Marou Faiseurs de % Share (NBO) - Retail Value RSP - 2020
Chocolat and Mark & Milk Chocolate, were available in retail outlets. The quality of
local products is increasingly considered as high in quality as those offered under Mars Inc 12.7%
international brands, For example, Marou is the first “Made in Vietnam” brand to Nestlé Vietnam Co Ltd 8.5%
appear among lists of the “world’s best” in chocolate confectionery. This image is
Chocolaterie Guylian NV 7.2%
underpinned by investments in cocoa farming networks in provinces and cities in
Vietnam to ensure the best quality seeds are used for Marou Chocolate’s products. The Bien Hoa Confectionery C... 3.3%
player highlights its quality credentials via the media to attract attention. In addition, Belcholat Chocolate JSC 3.0%
local manufacturers used to be weak in terms of packaging, but they have greatly
improved in this area due to investments in the domestic packaging industry. The rise Maestrani Schweizer Scho... 2.7%
of local chocolate confectionery is enhanced by government campaigns to push local August Storck KG 2.2%
products, which engender the support of local consumers for Vietnamese-origin
Mondelez International I... 1.9%
products.
Hershey Co, The 1.8%
RECOVERY AND OPPORTUNITIES Morinaga & Co Ltd 1.8%
Ferrero SpA 1.7%
Steady growth anticipated as the competitive landscape becomes more
Maestro Swiss Chocolate ... 1.7%
crowded with local and international brands
Cadbury Plc 1.4%
Over the forecast period, retail volume and value (at constant 2020 prices) growth rates
Delfi Ltd 1.1%
are projected to be largely in line with 2020. Therefore, COVID-19’s effect on chocolate
confectionery’s overall performance is expected to be short-lived and relatively small. Mondelez Kinh Do Vietnam... 1.0%
Vietnam has proved to be one of the first Asian countries to successfully contain the Ritter GmbH & Co KG, Alf... 0.8%
spread of COVID-19, with relatively few cases. In the forecast period, the competitive
landscape is set to become increasingly crowded, with Mars and Nestlé predicted to Marou Chocolate Co Ltd 0.5%
face tougher completion from both international and local players. As most of Mars’s Dai Hien Tam Co Ltd 0.4%
brands are positioned in premium segments, the company’s performance, especially in
the short term, may be hurt by the economic slowdown in the context of the COVID-19 Pham Nguyen Confectioner... 0.2%
pandemic in 2020. As the government pushes domestic brands/products and further Others 46.1%
investments are made in terms of quality and availability, local players are likely to
become increasingly competitive in the forecast period. This supports local options,
which tend to be cheaper than those offered under global brands, but have less scope
in terms of marketing reach. Importantly, the forecast period is predicted to see
innovation and new product development and wider distribution for local brands of
chocolate confectionery.

Gifting occasions set to offer growth opportunities as consumers accept

chocolate as a means of expressing love to family, friends or partners
Gifting occasions are expected to foster healthy sales growth for boxed assortments in
the forecast period. Many consumers prefer the boxed assortment for gifting because
the use of metal or paper packaging is perceived as premium and suitable as a gift
option. Special holidays and Valentine’s Day are predicted to offer strong growth
opportunities as the gifting of chocolate is a widely accepted means of expressing love
to family and friends, or partners in the case of Valentine’s Day. As more international
and local brands are set to enter the fray, there is likely to be development in boxed
assortments, in terms of pack type/size or design, not least as Western trends gain
ground, especially among younger consumers, in Vietnam.
Companies are expected to invest in marketing and new product development to
enhance the concept of gifting, such as Legendary Chocolatier’s flower-shaped
chocolates and 5-piece and 8-capsule products. Other initiatives are set to include the
use of major in-store displays and engagement with target customers via social media.

© Euromonitor Interna onal 2020 Page 2 of 3

However, the economy is predicted to be negatively impacted by the effects of COVID- Brand Shares of Chocolate Confectionery
19, so consumers may seek more value for money boxed assortments in the shorter % Share (LBN) - Retail Value RSP - 2020
term. Consumers tend to reduce their spending on non-essential goods at times of
economic difficulty. Thus, relatively high prices of gift options may see some Kit Kat 8.5%
consumers shift to lower-priced chocolate confectionery options or alternatives Guylian 7.2%
outside the category.
M&M's 6.8%
Perceived health benefits of chocolate set to foster demand among Snickers 3.6%
growing health-conscious consumer base Bella 3.3%

Chocolate confectionery is appreciated by the growing number of health-conscious Munz 2.7%

consumers in Vietnam. Many Vietnamese consumers perceive chocolate to be high in Belcholat 2.2%
antioxidants and good for health, not least as an aid to reducing stress. Many
consumers ignore or do not dwell on the negative aspects of chocolate confectionery Toblerone 1.9%
portrayed in the media, such as being a contributor to weight gain or even obesity. The Hershey's Kisses 1.8%
global pandemic has increased the health awareness of consumers, which could open
Dars 1.8%
new avenues for manufacturers. The positive perception of chocolate is also being
enhanced by the development of new product ranges featuring high-quality products Ferrero Rocher 1.7%
introduced with competitive prices. More players are filling the category with products Vochelle 1.7%
at affordable prices, especially for local brands like Mark & Milk Chocolate and
Legendary. Thus, the forecast period is expected to see sales of chocolate Dove 1.2%
confectionery, especially high-quality products, increasingly supported by health- Van Houten 1.1%
conscious consumers. However, chocolate confectionery is not as popular as sugar
confectionery because of its higher prices and more limited distribution. While these Mars 1.1%
aspects are set to see further improvements, the economic effects of COVID-19 are Koko Choco 1.0%
likely to counsel caution in terms of spending and hamper or delay the development of
Ritter Sport 0.8%
chocolate confectionery in the short to medium term.
Wonderland 0.8%
Summary 1 Other Chocolate Confectionery by Product Type: 2020
Toffifee 0.8%
Product type Others 50.0%
Chocolate lollipops
5-Year Trend
Chocolate paste Increasing share Decreasing share No change
Liquid chocolate

Source: Euromonitor Interna tiona l from officia l s ta tis tics , tra de a s s ocia tions , tra de pres s , compa ny
res ea rch, s tore checks , tra de interviews , tra de s ources

© Euromonitor Interna onal 2020 Page 3 of 3