Baked Goods in Vietnam

Euromonitor International
December 2021
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LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2021 DEVELOPMENTS ............................................................................................................... 1
COVID-19 drives A shift from foodservice to retail and from on-the-go to home consumption . 1
Wide distribution helps international players Orion and Mondelez weather the pandemic storm1
Pandemic leads to only A modest shift towards packaged bread, as consumers prize
freshness .................................................................................................................................. 2
PROSPECTS AND OPPORTUNITIES......................................................................................... 2
Recovery in foodservice demand will be sluggish .................................................................... 2
Wider distribution in rural areas will be A key growth driver ...................................................... 3
Marketing will increasingly emphasise snacking, rather than gifting ......................................... 3
CATEGORY DATA ....................................................................................................................... 3
Table 1 Sales of Baked Goods by Category: Volume 2016-2021 ............................. 3
Table 2 Sales of Baked Goods by Category: Value 2016-2021 ................................ 3
Table 3 Sales of Baked Goods by Category: % Volume Growth 2016-2021 ............ 4
Table 4 Sales of Baked Goods by Category: % Value Growth 2016-2021 ............... 4
Table 5 NBO Company Shares of Baked Goods: % Value 2017-2021 ..................... 5
Table 6 LBN Brand Shares of Baked Goods: % Value 2018-2021 ........................... 5
Table 7 Distribution of Baked Goods by Format: % Value 2016-2021 ...................... 6
Table 8 Forecast Sales of Baked Goods by Category: Volume 2021-2026 .............. 7
Table 9 Forecast Sales of Baked Goods by Category: Value 2021-2026 ................. 7
Table 10 Forecast Sales of Baked Goods by Category: % Volume Growth
2021-2026 .................................................................................................... 7
Table 11 Forecast Sales of Baked Goods by Category: % Value Growth 2021-
2026 ............................................................................................................. 8

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BAKED GOODS IN VIETNAM

KEY DATA FINDINGS
▪ Retail value sales grow by 6% in current terms in 2021 to VND24.6 trillion
▪ Orion Food Vina Co Ltd is the leading player in 2021, with a retail value share of 16%
▪ Retail sales are set to grow at a current value CAGR of 8% (2021 constant value CAGR of
4%) over the forecast period to VND36.3 trillion

2021 DEVELOPMENTS

COVID-19 drives A shift from foodservice to retail and from on-the-go to

home consumption
In 2019, foodservice accounted for more than a fifth of total volume sales of baked goods, but
since the onset of the pandemic, there has been a notable shift in demand to the retail channel,
with this trend deepening in 2021. During a three-month lockdown that was implemented in
some of the country’s largest cities between July and September 2021, foodservice outlets
could only provide a delivery service – and even this was problematic. Unsurprisingly,
international tourist arrivals also declined steeply during the year, which also had a negative
effect on foodservice demand. The rate of growth in retail volume sales of baked goods
decelerated slightly during 2021, with local consumers shopping closer to where they lived.
Many types of baked goods are consumed not as meals but as snacks that temporarily satisfy
hunger, especially when on the go or at work or school. However, COVID-19 restrictions
significantly reduced such consumption opportunities in many urban centres for an extended
period during 2021. Moreover, special occasions/events, such as traditional festivals, were
limited due to social distancing, so gifting is not as popular as before.
Thanks to the expansion of modern retailing channels, baked goods are now well distributed
not only via traditional grocery retailers, but also in convenience stores and supermarkets, which
reinforces the convenience of baked goods for snacking and increases consumption occasions.
Meanwhile, e-commerce is an emerging channel.

Wide distribution helps international players Orion and Mondelez

weather the pandemic storm
The baked goods category tends to be populated by the same players as the biscuits and
confectionery categories in Vietnam, such as Mondelez Kinh Do Vietnam, Bien Hoa
Confectionery (Bibica) and Orion Food Vina. However, baked goods tend to have higher prices.
Despite the higher cost, prior to the pandemic, demand for baked goods was developing well
due to improvements in average incomes. Thus, baked goods, both packaged and unpackaged,
were affordable for more people, making them more competitive with biscuits and confectionery.
International players like Mondelez Kinh Do Vietnam are increasingly targeting more affluent
local consumers, as these have been less affected by the economic shock of the pandemic.
They also tend to be much aggressive with regard to new product development, often launching
offerings in Vietnam that have been successful in other countries. Between them, Mondelez and
South Korea-based Orion Group accounted for almost a third of retail value sales of baked
goods in Vietnam during 2021. Both of these players have increased their retail value share
since the onset of the pandemic, due in part to their wide distribution.

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An abundance of domestic players operate in baked goods, notably Huu Nghi Food, Asia
Bakery & Confectionery (ABC), Bien Hoa Confectionery (Bibica), Bao Ngoc Akito Investment
and Manufacturing, Nhu Lan Bakery and Apollo Food Industries. Moreover, local companies
hold three of the top five positions in the category. Smaller local players are often focused on
widening their distribution, as they struggle to match their international rivals in terms of
marketing and product sophistication. Local players often distribute only within their own region.
For example, Nhu Lan Bakery is only well known in Ho Chi Minh City, whereas Bao Ngoc is
strong in northern Vietnam.

Pandemic leads to only A modest shift towards packaged bread, as

consumers prize freshness
In bread, the main drivers of innovation remain freshness and protein. The former is regularly
communicated on the packaging of many brands, such as Staff (Huu Nghi Food JSC), Bao
Ngoc (Bao Ngoc Akito Investment and Manufacturing JSC) and Kinh Do (Kinh Do Corp).
Moreover, as breakfast is the main consumption occasion for these products, there is an
emphasis on nutrition and energy. For instance, Staff contains more meat and therefore more
protein. This is important in Vietnam, as local consumers tend to believe that food that contains
fresh ingredients and more meat is more nutritious and delicious. Such products were
particularly appealing in 2021, as consumers sought to keep themselves healthy and boost their
immune systems.
Mindful of consumers’ preference for fresh products and facing strong competition from
freshly made artisanal products, purveyors of packaged bread are emphasising the freshness of
their own products. Indeed, a pop-up sign on packaging that reads “bánh mì tuoi” (meaning,
“fresh bread”) is seen on many brands such as Kinh Do, a pioneer in inspiring interest in fresh,
albeit packaged bread. Those packaged breads promoted as “fresh” are often softer and tastier
and otherwise benefit from being presented as being newly baked. Since the onset of the
pandemic, packaged bread has slightly outperformed unpackaged bread in terms of their
respective rates of retail volume sales growth. However, the latter remain significantly more
popular.
Packaged cakes are increasingly a focus among industry players. This is because they are
often consumed as snacks in Vietnam during break times or are bought for the purpose of
gifting. Players are now allocating more resources to marketing these products. These included
above-the-line activities by Mondelez Kinh Do for Solite and Orion’s Orion Choco-Pie. The
closure of non-essential retail outlets has boosted sales of packaged cakes at the expense of
unpackaged ones.

PROSPECTS AND OPPORTUNITIES

Recovery in foodservice demand will be sluggish

The rate of growth in retail volume sales of baked goods will steadily accelerate over the
course of the forecast period, supported by an anticipated post-pandemic economic rebound,
urbanisation, population growth and widening distribution. Even as the threat posed by COVID-
19 diminishes somewhat, it is likely to make local consumers more health conscious in their
purchasing choices. Foodservice retail volume sales of baked goods will begin to recover in
2022, but they will remain below their pre-pandemic (2019) peak until 2026. The easing of
COVID-19 restrictions and an anticipated recovery in international tourism will be the main
drivers of this.

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Wider distribution in rural areas will be A key growth driver

The distribution of baked goods will continue to widen throughout the forecast period. In
particular, packaged bread, cakes and pastries will increasingly be available in more peripheral
regions of the country where independent small grocers remain the most important distribution
channel and modern grocery retail outlets are relatively scarce. More generally, as local
consumers tend to have a low level of brand loyalty baked goods, availability is key to driving
sales.

Marketing will increasingly emphasise snacking, rather than gifting

Snacking, rather than gifting, will increasingly be the focus of marketing activity in cakes
during the forecast period. With consumers set to spend less time at home as COVID-19
restrictions are eased, they will be eating more on the go. Meanwhile, opportunities for gifting
are expected to remain quite limited – at least during the early part of the forecast period – due
to the lingering fear of contagion.

CATEGORY DATA
Table 1 Sales of Baked Goods by Category: Volume 2016-2021

'000 tonnes
2016 2017 2018 2019 2020 2021

Baked Goods 197.8 207.6 218.3 230.7 241.0 249.6

Bread 140.0 145.9 152.1 159.5 166.0 171.5
- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 140.0 145.9 152.1 159.5 166.0 171.5
-- Packaged Leavened 60.7 62.9 65.4 68.4 71.3 73.9
Bread
-- Unpackaged Leavened 79.3 83.0 86.7 91.1 94.7 97.5
Bread
Cakes 38.7 40.9 43.7 46.9 49.4 51.5
- Packaged Cakes 25.9 27.4 29.3 31.5 33.2 34.7
- Unpackaged Cakes 12.8 13.6 14.4 15.4 16.2 16.8
Dessert Mixes - - - - - -
Frozen Baked Goods - - - - - -
Pastries 19.1 20.8 22.4 24.3 25.6 26.6
- Packaged Pastries 2.8 2.9 3.1 3.2 3.4 3.4
- Unpackaged Pastries 16.3 17.8 19.3 21.0 22.3 23.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Baked Goods by Category: Value 2016-2021

VND billion
2016 2017 2018 2019 2020 2021

Baked Goods 16,292.8 17,747.3 19,476.6 21,594.2 23,227.2 24,577.2

Bread 6,771.8 7,214.7 7,751.3 8,426.9 9,016.7 9,520.6
- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -

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- Leavened Bread 6,771.8 7,214.7 7,751.3 8,426.9 9,016.7 9,520.6

-- Packaged Leavened 4,111.4 4,333.4 4,610.8 4,956.6 5,303.5 5,621.7
Bread
-- Unpackaged Leavened 2,660.4 2,881.2 3,140.5 3,470.3 3,713.2 3,898.9
Bread
Cakes 8,498.4 9,400.8 10,490.9 11,814.7 12,758.5 13,523.7
- Packaged Cakes 4,076.6 4,541.2 5,121.1 5,838.1 6,363.5 6,809.0
- Unpackaged Cakes 4,421.8 4,859.6 5,369.8 5,976.6 6,395.0 6,714.7
Dessert Mixes - - - - - -
Frozen Baked Goods - - - - - -
Pastries 1,022.6 1,131.9 1,234.3 1,352.6 1,452.0 1,532.9
- Packaged Pastries 238.1 257.2 276.5 294.2 308.9 321.2
- Unpackaged Pastries 784.5 874.7 957.8 1,058.4 1,143.1 1,211.7
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Baked Goods by Category: % Volume Growth 2016-2021

% volume growth
2020/21 2016-21 CAGR 2016/21 Total

Baked Goods 3.5 4.8 26.1

Bread 3.3 4.1 22.5
- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 3.3 4.1 22.5
-- Packaged Leavened Bread 3.7 4.0 21.8
-- Unpackaged Leavened Bread 3.0 4.2 23.1
Cakes 4.2 5.9 33.0
- Packaged Cakes 4.5 6.0 33.8
- Unpackaged Cakes 3.5 5.6 31.3
Dessert Mixes - - -
Frozen Baked Goods - - -
Pastries 3.8 6.8 39.0
- Packaged Pastries 2.5 4.3 23.3
- Unpackaged Pastries 4.0 7.2 41.7
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Baked Goods by Category: % Value Growth 2016-2021

% current value growth

2020/21 2016-21 CAGR 2016/21 Total

Baked Goods 5.8 8.6 50.8

Bread 5.6 7.1 40.6
- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 5.6 7.1 40.6
-- Packaged Leavened Bread 6.0 6.5 36.7
-- Unpackaged Leavened Bread 5.0 7.9 46.6
Cakes 6.0 9.7 59.1
- Packaged Cakes 7.0 10.8 67.0
- Unpackaged Cakes 5.0 8.7 51.9
Dessert Mixes - - -

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Frozen Baked Goods - - -

Pastries 5.6 8.4 49.9
- Packaged Pastries 4.0 6.2 34.9
- Unpackaged Pastries 6.0 9.1 54.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 NBO Company Shares of Baked Goods: % Value 2017-2021

% retail value rsp

Company 2017 2018 2019 2020 2021

Orion Food Vina Co Ltd 13.4 14.5 15.3 15.8 16.4

Mondelez Kinh Do 14.9 14.9 14.7 15.1 15.5
Vietnam JSC
Huu Nghi Food JSC 4.7 5.0 5.2 5.2 5.3
Asia Bakery & 3.3 3.2 3.3 3.4 3.5
Confectionery Pte
Enterprise
Bien Hoa Confectionery 2.4 2.3 2.1 2.1 2.0
Corp (Bibica)
Pham Nguyen 1.8 1.7 1.6 1.5 1.4
Confectionery & Candy
Co Ltd
Bao Ngoc Akito 1.3 1.2 1.1 1.1 1.1
Investment and
Manufacturing JSC
Apollo Food Industries 1.2 1.2 1.1 1.1 1.0
Sdn Bhd
Duc Phat Private 3.7 2.9 2.1 1.4 0.7
Enterprise
Hai Chau Confectionery 0.1 0.1 0.1 0.1 0.1
JSC
Nhu Lan Bakery 0.1 0.1 0.1 0.1 0.1
European Foods PCL 0.7 0.5 0.3 0.1 -
Kinh Do Corp - - - - -
Artisanal 48.5 48.6 48.6 48.4 48.1
Others 3.8 3.9 4.3 4.6 4.8
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 Baked Goods: % Value 2018-2021

% retail value rsp

Brand (GBO) Company (NBO) 2018 2019 2020 2021

Orion (Orion Group) Orion Food Vina Co Ltd 11.8 12.4 12.7 13.1
Kinh Do (Mondelez Mondelez Kinh Do 11.9 11.6 11.8 12.2
International Inc) Vietnam JSC
Staff Huu Nghi Food JSC 5.0 5.2 5.2 5.3
ABC Asia Bakery & 3.2 3.3 3.4 3.5
Confectionery Pte
Enterprise
Solite (Mondelez Mondelez Kinh Do 3.0 3.2 3.3 3.3
International Inc) Vietnam JSC
Orion Custas (Orion Orion Food Vina Co Ltd 2.6 3.0 3.2 3.3

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Group)
Hura Bien Hoa Confectionery 2.3 2.1 2.1 2.0
Corp (Bibica)
Choco P&N Pham Nguyen 1.7 1.6 1.5 1.4
Confectionery & Candy
Co Ltd
Bao Ngoc Bao Ngoc Akito 1.2 1.1 1.1 1.1
Investment and
Manufacturing JSC
Apollo (Apollo Food Apollo Food Industries 1.2 1.1 1.1 1.0
Holdings Bhd) Sdn Bhd
Duc Phat Duc Phat Private 2.9 2.1 1.4 0.7
Enterprise
Hai Chau Hai Chau Confectionery JSC 0.1 0.1 0.1 0.1
Nhu Lan Nhu Lan Bakery 0.1 0.1 0.1 0.1
Euro European Foods PCL 0.5 0.3 0.1 -
Kinh Do Kinh Do Corp - - - -
Artisanal Artisanal 48.6 48.6 48.4 48.1
Others Others 3.9 4.3 4.6 4.8
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 Baked Goods by Format: % Value 2016-2021

% retail value rsp

2016 2017 2018 2019 2020 2021

Store-Based Retailing 99.9 99.9 99.8 99.6 99.6 99.5

- Grocery Retailers 99.9 99.9 99.8 99.6 99.6 99.5
-- Modern Grocery 7.6 8.1 8.8 10.7 12.0 13.7
Retailers
--- Convenience Stores 0.5 0.5 0.7 1.5 2.0 2.4
--- Discounters - - - - - -
--- Forecourt Retailers - - - - - -
--- Hypermarkets 2.9 3.2 3.3 3.8 4.0 4.6
--- Supermarkets 4.2 4.4 4.8 5.4 6.0 6.7
-- Traditional Grocery 92.3 91.7 91.0 89.0 87.6 85.7
Retailers
--- Food/drink/tobacco 35.2 34.9 35.1 37.1 35.5 35.1
specialists
--- Independent Small 32.8 32.8 32.3 30.1 29.6 28.9
Grocers
--- Other Grocery 24.3 24.1 23.7 21.8 22.5 21.7
Retailers
- Non-Grocery Specialists - - - - - -
-- Health and Beauty - - - - - -
Specialist Retailers
-- Other Foods Non- - - - - - -
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing 0.1 0.1 0.2 0.4 0.4 0.5
- Vending - - - - - -
- Homeshopping - - - - - -
- E-Commerce 0.1 0.1 0.2 0.4 0.4 0.5
- 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

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Table 8 Forecast Sales of Baked Goods by Category: Volume 2021-2026

'000 tonnes
2021 2022 2023 2024 2025 2026

Baked Goods 249.6 259.9 272.2 286.6 303.3 322.5

Bread 171.5 178.1 186.2 195.8 207.1 220.3
- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 171.5 178.1 186.2 195.8 207.1 220.3
-- Packaged Leavened 73.9 77.1 81.0 85.4 90.6 96.4
Bread
-- Unpackaged Leavened 97.5 101.0 105.2 110.4 116.5 123.9
Bread
Cakes 51.5 54.0 56.7 59.8 63.2 67.1
- Packaged Cakes 34.7 36.4 38.4 40.5 42.9 45.6
- Unpackaged Cakes 16.8 17.5 18.4 19.3 20.3 21.5
Dessert Mixes - - - - - -
Frozen Baked Goods - - - - - -
Pastries 26.6 27.9 29.3 31.0 32.9 35.1
- Packaged Pastries 3.4 3.5 3.7 3.8 4.0 4.1
- Unpackaged Pastries 23.2 24.3 25.7 27.2 29.0 31.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Sales of Baked Goods by Category: Value 2021-2026

VND billion
2021 2022 2023 2024 2025 2026

Baked Goods 24,577.2 25,334.5 26,238.1 27,301.0 28,545.5 29,990.0

Bread 9,520.6 9,798.0 10,126.7 10,511.2 10,962.9 11,488.9
- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 9,520.6 9,798.0 10,126.7 10,511.2 10,962.9 11,488.9
-- Packaged Leavened 5,621.7 5,801.6 6,010.5 6,250.9 6,532.2 6,858.8
Bread
-- Unpackaged Leavened 3,898.9 3,996.3 4,116.2 4,260.3 4,430.7 4,630.1
Bread
Cakes 13,523.7 13,957.4 14,476.1 15,087.9 15,802.5 16,629.7
- Packaged Cakes 6,809.0 7,094.9 7,428.4 7,814.7 8,260.1 8,770.5
- Unpackaged Cakes 6,714.7 6,862.4 7,047.7 7,273.2 7,542.4 7,859.1
Dessert Mixes - - - - - -
Frozen Baked Goods - - - - - -
Pastries 1,532.9 1,579.2 1,635.2 1,701.8 1,780.2 1,871.4
- Packaged Pastries 321.2 325.1 331.0 338.9 349.1 361.6
- Unpackaged Pastries 1,211.7 1,254.1 1,304.3 1,362.9 1,431.1 1,509.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Sales of Baked Goods by Category: % Volume Growth 2021-2026

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% volume growth
2021/22 2021-26 CAGR 2021/26 Total

Baked Goods 4.1 5.3 29.2

Bread 3.8 5.1 28.5
- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 3.8 5.1 28.5
-- Packaged Leavened Bread 4.3 5.5 30.4
-- Unpackaged Leavened Bread 3.5 4.9 27.0
Cakes 4.8 5.4 30.3
- Packaged Cakes 5.0 5.6 31.3
- Unpackaged Cakes 4.5 5.1 28.2
Dessert Mixes - - -
Frozen Baked Goods - - -
Pastries 4.7 5.7 32.1
- Packaged Pastries 3.0 3.8 20.5
- Unpackaged Pastries 5.0 6.0 33.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Baked Goods by Category: % Value Growth 2021-2026

% constant value growth

2021/2022 2021-26 CAGR 2021/26 Total

Baked Goods 3.1 4.1 22.0

Bread 2.9 3.8 20.7
- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 2.9 3.8 20.7
-- Packaged Leavened Bread 3.2 4.1 22.0
-- Unpackaged Leavened Bread 2.5 3.5 18.8
Cakes 3.2 4.2 23.0
- Packaged Cakes 4.2 5.2 28.8
- Unpackaged Cakes 2.2 3.2 17.0
Dessert Mixes - - -
Frozen Baked Goods - - -
Pastries 3.0 4.1 22.1
- Packaged Pastries 1.2 2.4 12.6
- Unpackaged Pastries 3.5 4.5 24.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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