Changing trends in alcoholic beverage consumption in Vietnam

At the conference hosted by VIR on August 14, Le Minh Trang, deputy director of the Retail Research Department, NielsenIQ (NIQ), shared her insights on consumer behaviour trends, particularly regarding alcoholic beverages.

"According to NielsenIQ's 2024 Consumer Report, health ranks among the top three concerns for Vietnamese consumers, mirroring trends observed in other Asia-Pacific territories like China, Hong Kong, Taiwan, and Japan," said Trang. This perspective significantly impacts consumer behaviour and product preferences across multiple sectors, including the beer industry.

Economic downturns also pose a notable challenge for consumers, prompting them to adopt various strategies to manage their spending in light of rising market prices. Additionally, there is an increasing consumer preference for brands that emphasise environmental sustainability.

“Consumers are paying more attention to these issues due to the substantial promotion of information regarding climate change, sustainable development, and health,” Trang explained. This shift is leading to changes in consumer thinking and behaviour when choosing brands.

Regarding sales channels, according to NIQ's report, two of the most common strategies adopted by 50 per cent of consumers in Hanoi and Ho Chi Minh City are reducing unnecessary expenditures, including dining out and optimising home cooking.

Le Minh Trang shared her insights on consumer behaviour trends, particularly regarding alcoholic beverages

This shift has directly led to a decline in revenue for restaurants and eateries, which has been ongoing since January 2023. Over the past 12 months, this decline has been 6 per cent nationwide and 11 per cent in six major cities, including Hanoi, Haiphong, Danang, Nha Trang, Can Tho, and Ho Chi Minh City.

Moreover, although traditional retail channels have witnessed a decline in consumer spending, modern channels are benefiting from heightened traffic due to their convenience and a wide array of promotions.

NIQ’s report identifies beer and non-alcoholic beverages as key contributors to over half of fast-moving consumer goods revenue in Vietnam, despite a 3.9 per cent decline in growth. Conversely, the volume of low-alcohol beers has surged by 35 per cent in the past year, particularly in major cities and modern channels, driven by heightened health concerns among Vietnamese consumers.

“This is due to health being the top concern for Vietnamese consumers,” Trang said.

Regarding packaging, cans, which already dominated the beer market, are increasingly preferred and consumed more compared to other packaging types, with a 4 per cent increase in revenue share over the past three years.

“These trends stem from the significant concern of Vietnamese consumers that we have observed and recorded over the past few years. It is likely that it will continue and impact the beer industry in the future,” Trang concluded.

In light of these movements, she advised that manufacturers intensify their efforts to connect with consumers and clearly convey the benefits of their products. It is essential to maintain a robust presence across both digital and physical retail environments, given the growing tendency of consumers to navigate between various shopping channels.

Furthermore, businesses should prioritise health and sustainability in their strategies, utilising comprehensive communication approaches to underscore how their products align with consumers' increasing emphasis on wellbeing and environmental responsibility. By strategically emphasising these aspects, they can adeptly align with and leverage the shifting consumer preferences towards health-focused and eco-conscious products.

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