Where does Tan Hiep Phat stand in the beverage market?

Comparing domestic and foreign in the beverage market

According to research firm Kantar, the Covid-19 pandemic has had a major impact on beverage sales in Vietnam in 2021. The reason is that on-site consumption channels have declined sharply. However, by 2022, when the negative impact of the pandemic is no longer felt, beverage output has increased by 7% in 4 major cities and 10% in rural areas.

A positive sign for beverage production is rising demand as activities begin to reopen. Social activities such as outdoor recreation, restaurants, tourism and hotels will resume operations from early 2022.

Market research firm VIRAC said retail sales of soft drinks in 2022 reached 4,500 liters, up about 5% over the same period in 2021. It is forecasted that growth in soft drink sales in the 2022-2024 period will fluctuate between 4.3-4.8% when the economy returns to normal.

Considered a potential market, the big piece of the industry mainly belongs to foreign enterprises , and there are few domestic enterprises that can compete directly with them.

According to VIRAC, currently the three giants including Suntory Pepsico Vietnam, Coca-Cola, URC Vietnam and domestic enterprise Tan Hiep Phat account for about 57% of the market share.

Looking more closely at each industry, domestic enterprises are somewhat disadvantaged. For example, the energy drink segment, the market size is estimated to be worth VND18,000 billion in 2022, according to Masan data. Red Bull Vietnam is leading the market, followed by Suntory Pepsico and Tan Hiep Phat. Masan entered this industry in 2015 and is the 4th largest brand.

In the carbonated beverage segment, Suntory Pepsico is currently leading. The second position in 2022 belongs to Coca-Cola Vietnam, according to VIRAC.

In the ready-to-drink tea segment, data from research firm Euromonitor shows that Tan Hiep Phat is in the lead with a market share of 32% in 2022. URC Vietnam is in second place with 20.6%. Next is Suntory Pepsico Vietnam.

Tân Hiệp Phát đứng ở đâu trên thị trường nước giải khát? - 1 — Market share of bottled tea industry in Vietnam in 2021 (Source: Euromonitor).

What will the market be like after the Tan Hiep Phat event?

Recently, on April 10, the Ministry of Public Security's Investigation Police Agency prosecuted and temporarily detained Mr. Tran Qui Thanh and Ms. Tran Uyen Phuong and conducted searches of the residences and workplaces of 9 locations of the 3 defendants; prosecuted Ms. Tran Ngoc Bich. Mr. Thanh and his daughters are the founders and key executives of Tan Hiep Phat.

It is undeniable that Tan Hiep Phat is a rare Vietnamese enterprise that is competing fairly with foreign enterprises in the market. After the incident with Mr. Thanh and his children, how will the beverage market fluctuate?

Sharing with Dan Tri , an F&B analyst at Bao Viet Securities Company said that Tan Hiep Phat's current main products are 0-degree green tea, Dr. Thanh tea, and Number 1. These 3 products account for about 12-13% of the non-alcoholic beverage market share in general, only counting the off-trade channel (buy-to-home distribution channel - PV). Of which, 0-degree green tea accounts for about 9%, Number 1 nearly 3%, and Dr. Thanh more than 1%.

Assuming this group has fluctuations, the market share will likely be divided among large enterprises in the instant tea industry such as URC Vietnam (C2 Tea) and Suntory PepsiCo (Tea+ Tea), Interfood (Wonder Farm Tea).

In the energy drink segment, the group's Number 1 brand currently has the third largest market share, around 16-17%. If there is any fluctuation, the market share will be divided among existing "big guys" in the market such as Red Bull (Red Bull), Suntory PepsiCo Vietnam (Sting) and Masan (WakeUp 247, Tiger Stripe, Compact). This is one of the segments with the highest growth in the beverage industry.

Sharing information released on April 11, Tan Hiep Phat said that the incident will certainly affect the company's operations. However, the company will make every effort to minimize the adverse effects of this incident on the company's operations. Tan Hiep Phat will still maintain operations, ensuring jobs and income for employees, partners, farmers growing raw materials...

Source