KANTAR WORLDPANEL DAIRY TALK

8 . 5 . 2 0 1 3 | 8 : 3 0 AM – 11 : 0 0 AM | S h e r a t o n Saigon

© Kantar Worldpanel
VIETNAM DAIRY MARKET
THE MILKY OPPORTUNITIES
Urban 4 Key Cities and Rural Vietnam – Updated to FY 2012

© Kantar Worldpanel
 VIETNAM DAIRY MARKET: THE HOTEST IN THE REGION!

2012 vs. 2011

NOT ONLY BY PRICE,
14 VIETNAM DAIRY MARKET IS ALSO DRIVEN BY
China (urban national)
11
REAL DEMAND INCREASE
4
South Korea
7

5 URBAN 4 CITIES RURAL

Malaysia (peninsula)
7

5
Philippines (national)
4 29 31
26
9
Taiwan 16
11 15 15
25 28
11 22
Thailand (national) 15
11 10
6
15
Vietnam (4 urban cities) 2010 2011 2012 2010 2011 2012
15

12
Vietnam (Rural)
26 Volume change % (units) Value change %
FMCG growth Dairy growth

Source: Kantar Worldpanel – FMCG excluding Gift

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© Kantar Worldpanel
 URBAN: INCREASED DEMAND FOR FUNCTIONAL PRODUCTS
Functional products are growing very fast in both value and volume.

The bubble sizes represent the value contribution to dairy – 2012

80

70
Functional DKY
60
Value change % (2012 vs 2011)

Infant milk Pwd

50
Adult milk Pwd (*)
40

DKY regular Functional liquid

Kid milk Pwd (*) 30 Cup Yogurt milk
20 UHT/ sterilized
milk
10
Pasteurized milk Condensed milk
0
-20 -10 0 10 20 30 40 50
-10
Cheese
-20
Volume change % (2012 vs 2011)
Source: Kantar Worldpanel – Household Panel (Vietnam 4 key urban cities) – Dairy excluding gift
(*) Baby Panel (HCMC & HN) – Kids 0-6 years old

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 RURAL: MOST DAIRY PRODUCTS BLOSSOM

The bubble sizes represent the value contribution to dairy – 2012

60
Functional liquid
milk
50
Value change % (2012 vs 2011)

UHT/ sterilized Infant milk Pwd

40 milk
Cup Yogurt
30
DKY regular
Adult milk Pwd
20

Condensed milk
10
Kid milk Pwd
0
-20 -10 0 10 20 30 40 50 60

-10
Cheese
-20
Volume change % (2012 vs 2011)
Source: Kantar Worldpanel – Household Panel (Rural Vietnam) – Dairy excluding gift

© Kantar Worldpanel
 DAIRY: RANK 1ST IN THE FMCG WALLET OF URBAN FAMILIES WHILE
3rd IN RURAL

MONTHLY TICKET

372k VND
(US$ 18)
114k VND
9 (US$ 5)

9
14 33 19
9
URBAN
1.13 Mln VND RURAL
(US$ 54) 515K VND
FMCG ticket (US$ 25)
FMCG ticket 22
26
Dairy 40
19
Beverages
Packaged foods
Personal care
Household products
Source: Kantar Worldpanel – Households Panel – 4 Key Urban Cities & Rural Vietnam –FY 2012 – Total FMCG excluding Gift
Monthly spending per buyer

6 © Kantar Worldpanel

© Kantar Worldpanel
 Monthly penetration %

HOW WILL 100

83 88%
DAIRY LOOK 80

51 64%
LIKE IN THE 60

40
NEXT 3 YEARS? Urban
20 Rural

Monthly Spend/buyer (‘000 VND)

600
540
500 432
400
300
174 260
200
100
0

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities & Rural – Dairy excluding gift – Monthly trend

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© Kantar Worldpanel
 HOW WILL Vietnam dairy
market in 2012 (*)
DAIRY LOOK
LIKE IN THE >40,000
NEXT 3 YEARS? Bln VND
(>2 Bln USD)
Vietnam dairy market
in 2015 (*)

>70,000
540
Bln VND
(>3.5 Bln USD)

(*) Estimated total Vietnam dairy market (Including IH & OOH consumption) in a year, based on:
>> 4 key cities + rural = 75% nationwide, based on GDP
>> Average In-home vs. OOH drinking usage occasion rate of dairy products in 4 key cities
>> Same population growth rate as in the last 3 years
Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities & Rural – Dairy excluding gift – Monthly trend

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 WHAT POTENTIAL TO GROW BUYER BASE FOR MANY DAIRY PRODUCTS

Annual penetration %

100
HIGHLY PENETRATED
90
80
70
MEDIUM PENETRATED
60
50
40
30
LOW PENETRATED
20 URBAN
10 RURAL
0

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities & Rural – Dairy excluding gift – FY2012
(*) Among Households with kid <4 YO

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© Kantar Worldpanel
 WHERE URBAN – STREET SHOPS, H+S, WET MARKET

Value change % STREET SHOPS WET MARKET

HYPER+
SUPERMARKETS
(2012 vs. 2011) (+15%) (+18%) (+18%)
Value contribution
to total dairy (%)
(vs. % to FMCG) 78%(66%) 9%(12%) 9%(15%)
Annual
penetration % 94% 34% 59%
Spend/shopper
(‘000 VND) 3,633 1,212 668
Shopping 3 times Once Once
frequency /month /3 weeks / 7 weeks
Spend/trip
(‘000 VND) 101 75 87
Liquid milk Liquid milk Liquid milk
Kid milk powder Kid milk powder Cup yogurt
Top 5 dairy Infant milk powder Condensed milk Kid milk powder
Categories (Value %) Cup yogurt Adult milk powder Condensed milk
Adult milk powder Cup yogurt Adult milk powder

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities – Dairy excluding gift – FY2012

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 WHERE RURAL – WET MARKET IS IMPORTANT IN CENTRAL & SOUTH

Value change % STREET SHOPS WET MARKET

(2012 vs. 2011) (+27%) (+18%)

Value contribution 30% in central

to total dairy (%) 70% 28% 37% in south

Annual
penetration % 77% 59%
Spend/shopper
(‘000 VND) 1,072 953
Shopping 2 times Once
frequency /month /month
Spend/trip
(‘000 VND) 52 64
Liquid milk Liquid milk
Kid milk powder Kid milk powder
Top 5 dairy Cup yogurt Adult milk powder
Categories (Value %) Infant milk powder Infant milk powder
Adult milk powder Condensed milk

Source: Kantar Worldpanel – Household Panel – Rural Vietnam – Dairy excluding gift – FY2012

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 HOW BULKY SHOP KEEPS ON

More packs per shopping trip Bigger pack sizes (GR)

2010 2011 2012

8.1
8.8
7.6 11.6 704 763
9.7 10.1
8.5

URBAN

DAIRY Liquid milk Drinking yogurt Milk powder

DAIRY LIQUID DRINKING

DRINKING KID MILK
PRODUCTS MILK YOGURT
YOGURT POWDER

6.9 9.6 559 593

5.4 6.0
7.4 7.7
6.3

RURAL

RURAL Liquid milk Drinking yogurt Milk powder

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities & Rural – Dairy excluding gift

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 HOW UP-TRADING TREND (ESPECIALLY IN URBAN)

Upper price segment

Value share % Annual penetration %

100 100.00 100 100.00 100 70.00

90 90.00 90 90.00 90
80 71 80.00 80 80.00 80
60.00

70 60 70.00 70
56 60 70.00 70 50.00

60 60.00 60 60.00 60 40.00

50 50.00 50 50.00 50
URBAN 24
40 40.00 40 40.00 40 19 30.00

30 30.00 30 30.00 30 20.00

20
37 20.00 20
32 37 20.00 20
30 10.00
10 23 10.00 10 10.00 10 21
0 0.00 0 0.00 0 0.00

2011 2012 2011 2012 2011 2012

FORTIFIED LIQUID
LIQUID MILK MILK BEAUTY BRANDS
CUP YOGURT PROBIOTIC
DRINKINGPRODUCTS
YOGURT
100
REACHES 70.00 100
ARE PURCHASED BY 50.00
ACCOUNTS FOR
90 90
52 60.00
45.00

60% URBAN HHs ½ 1/3 OF URBAN

80 80 40.00

70 43 50.00 70 35.00

60 40.00
60 OF URBAN HHs 30.00

50 50 20 25.00

RURAL 40
30.00
40 15 20.00 DRINKING YOGURT
30
20
42% RURAL42HHs 20.00 30
20
AND REACH 15.00

10.00
MARKET VALUE
30
10
0
IN 2012 10.00

0.00
10
0
15%
25 RURAL 29
HHs 5.00

0.00

2011 2012 2011IN 20122012

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities & Rural – Dairy excluding gift

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 WHO WHICH CONSUMER GROUPS SHOULD BE TARGETED?

% households
54% vs. 46%
HOUSEHOLDS
WITH KIDS
% households
purchase/ month 93% vs. 77%
CORE CONSUMERS
FOR DAIRY Spend/buyer/ month
(000 VND) 545 vs. 197
Similar trend in rural
Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities – Dairy excluding gift – FY2012

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 FAMILIES WITHOUT KID: A NEW DRIVING FORCE

DAIRY GROWS
FASTER AMONG
Dairy value growth
FAMILIES
WITHOUT KIDS
(2012 vs. 2011) 13% vs. 25%
100 525 530 600.00
513
98 468
439 458 456 500.00
96 433 410 409 426
94 352 400.00
92
90 300.00
88
86 200.00
92 92 91
84 89 90 89 89 89 89 89 88
87 100.00
82
80 0.00

Q1'2012
Q1'2010

Q2'2010

Q3'2010

Q4'2010

Q1'2011

Q2'2011

Q3'2011

Q4'2011

Q2'2012

Q3'2012

Q4'2012
Penetration % Spend per buyer (000 VND)

Source: Kantar Worldpanel – Household Panel – Vietnam 4 key urban cities – Dairy excluding gift

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© Kantar Worldpanel
 WHEN DAIRY PRIME-TIME: MORNING FOR KIDS, BED TIME FOR ADULTS

1. Morning 1. Before bed time

(In/ after breakfast) Milk powder, SCM, liquid
Liquid milk, yogurt milk

2. Before bed time 2. Morning

Milk powder, liquid milk
DAIRY TIME (In/ after breakfast)
Liquid milk, yogurt, SCM
3. After lunch
Yogurt, liquid milk 3. After lunch
Yogurt

Source: Kantar Worldpanel – Drink Usage Panel – Vietnam 4 key urban cities – Dairy among individuals 4+ YO – 2012

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© Kantar Worldpanel
 VIETNAM
THE MILKY OPPORTUNITIES
DAIRY MARKET
1ST PRIORITY URBAN: BIG MONTHLY CONSUMERS ADDED VALUE
IN URBAN STREET SHOPS, SHOPPING ARE SHOPPING PRODUCTS ARE
($18/HH/month) H+S, WET TRAFFIC MORE PACKS/ MORE
MARKET BIGGER PACK WELCOMED
GROWING FAST SIZES IN A TRIP (ESPECIALLY IN URBAN)

IN RURAL DAIRY IS (BOTH URBAN &

RURAL:
($5/HH/month) FREQUENTLY RURAL) DIFFERENT
STREET SHOPS
SHOPPED TARGET
& WET MARKET
OPPORTUNITY (CENTRAL & SOUTH) EITHER ALONE GROUPS HAVE
TO DEVELOP OR WITH DIFFERENT
FURTHER PACKAGED NEEDS
PENETRATION FOODS IN SAME
ACROSS DAIRY BASKETS
CATEGORIES SHOPPER
CONSUMER INNOVATIONS
CHANNEL LOYALTY ACHIEVE HIGHER
REACH LEVERAGE BULKY
HUGE FOCUS MORE CHANCE TO SHOP WITH
SALES THROUGH
MAXIMIZE SALES DIVERSIFICATION
POTENTIAL “SHOW-OFF” BUNDLE PACK/
& PROMOTION
FOR INVESTMENT AT P.O.S UPSIZING
EFFECTIVENESS

© Kantar Worldpanel