Vietnam’s instant noodle giants

Vietnam is the fourth largest consumer of instant noodle in the world, with major names vying for dominance

Vietnam saw recovery in the consuming of instant noodle with a total 4.9 billion packages consumed in 2016, up 2.5 per cent on-year, making Vietnam the fourth largest consumer country in the world, following China, Indonesia, and Japan.

These statistics were published by the World Instant Noodle Association (WINA). Accordingly, each Vietnamese people tuck in an average of 52 packages of instant noodles per year.

There are 50 enterprises engaged in producing instant noodles in Vietnam. Seventy per cent of the revenue has come from Vina Acecook, Masan Consumer, and Asia Foods, the three largest instant noodle producers with a combined 70 per cent market share.

Vina Acecook

Since its establishment in December 1993 and official inauguration in 1995, Acecook Vietnam JSC has been constantly developing and became a leading foodstuffs manufacturer in Vietnam. Vina Acecook has attained a strong position in the market by providing instant processed products, especially instant noodle with more than 20 brands, including Hao Hao, SiuKay, Quang Noodle Quen of Danang, Udon Suki Suki, Yummi, Da Nhat, and non-fried noodle blocks.

At present, Vina Acecook ranks first in Vietnam in sales, with 43 per cent of the market share. However, the figure was lower than that 10 years ago, when Vina Acecook occupied 51 per cent of the market share with brands Hao Hao and Good Noodle.

In recent years, it saw a decrease in market share due to the continuous emergence of foreign instant noodle brands as well as the strict competition with other instant noodle manufacturers.

Despite the decrease in market share, Vina Acecook still reported positive business results. Notably, it earned VND9 trillion ($396.1 million) in revenue in 2014, and VND9.3 trillion ($409.2 million) in 2015.

According to Kajiwara Junichi, general director of Vina Acecook, in the first six months of 2016, the company sold 1.3 billion packages of instant noodle and expected that the figure of the whole year would be 2.9 billion, with an expected revenue from instant noodle sales in 2016 reaching VND9 trillion ($396.1 million). The revenue from the Vietnamese market contributed 50 per cent of the group’s total revenue.

Along with domestic consumption, Vina Acecook set a target to expand export operations with the expectation that exports would make up 20 per cent of its instant noodle sales. In reality, in 2015, it exported 200 million packages, or 8 per cent of its total capacity of instant noodle, while the figure of the first six months of 2016 was 100 million of packages.

Masan Consumer

Masan Consumer is considered a heavyweight competitor of Vina Acecook in the instant noodle segment. Its entering the sector in 2007 contributed to Vina Acecook’s decreasing market share. Dipping in the instant noodle market in 2012, it reported impressive growth with 24 per cent of the instant noodle market share, which was 25 per cent in 2015 and 24 per cent in 2016.

It is well-known by brands like Omachi, which holds a dominant position in the high-end instant noodle market, Kokomi, and Sagami at the medium segment.

According to Masan’s business strategy, it does not try to compete in prices, but focuses on upgrading products to make them more convenient and have higher quality. One of the products with ‘higher quality’ is the ‘instant noodle with real meat,’ which has just been launched. It costs VND1,000 higher per package.

Masan Consumer earns an average VND5 trillion ($220 million) from instant noodle per year. This company also has ambitions to increase instant noodle exports.

Asian Food

Asian Food is the third largest instant noodle manufacturer in Vietnam, with 10 per cent market share and famous brands like Gau Do, Trung Vang, and Shang-ha cup, among others.

Established in 1990, the company currently has factories in Ho Chi Minh City, Binh Duong province, and Bac Ninh province. In 1997, it started exporting its instant noodle products to Russia, Ukraine, Germany, New Zealand, Hungary, and Poland. Besides, it became one of the top instant noodle suppliers in Cambodia with more than 50 per cent market share.

Miliket

Miliket-Colusa Foodstuff JSC (Miliket) dominated the local instant noodles market in the 1970s and 1980s. However, at present, it holds only 2 per cent of the market.

According to its financial report for the third quarter of this year, during the first nine months, it earned VND136 billion ($5.98 million) in net revenue, equaling VND45 billion ($1.98 million) per month, up 16.4 per cent on-year.

Thanks to the decreasing expenditures in sales and management, its after-tax profit in the third quarter reached VND6.6 billion ($290,405), doubling on-year.

However, in 2016, the company’s revenue dipped to a five-year low of VND461 billion ($20.24 million), down 3.5 per cent from the previous year.

The company reported an annual drop of 39 per cent in pre-tax profit to VND25 billion ($1.1 million) last year, the lowest since 2012, despite the introduction of several new products.

A specialty of Miliket products is that during the past 40 years, despite numerous efforts to upgrade and diversify its products, it still packs products in kraft paper.

Uniben Foods Company

Uniben Foods is not as famous as Vina Acecook, Masan Consumer or Asian Food, however, its "3 Mien" product remains the most popular noodle brand in the rural markets of Vietnam, according to the latest report by market research company Kantar Worldpanel.

The "3 Mien" brand, with two main product lines being "3 Mien" and "3 Mien GOLD," ranked first in Vietnam's rural areas, with an over 26 per cent market share.

In terms of brand value, "3 Mien" reached more than 22 per cent of the rural market share, overcoming Masan Consumer’s products and sharing the top position with the Hao Hao brand of Vina Acecook.

Uni-President

Uni-President Group was formally established on July 1, 1967 in Taiwan, with 80 employees. Uni-President (Vietnam) was established in 1999 in Binh Duong province with the investment capital of $225 million, to produce food in fisheries, animal feed, flour noodle, instant noodle, and beverages.

Entering the instant noodle market in 2001, Uni-President conquered customers with brands like Vua Bep, Unif, and Tieu Nhi, among others. The company reported selling an average of 10 million packs per year, with an average increase of 35 per cent in instant noodle sales.

Along with domestic distribution, Uni-President also exports its instant noodle products to France, Germany, the US, and Australia.

Along with these above names, the instant noodle market features other local names, including Vifon, Saigon Ve Wong, Thien Huong, Kido, as well as numerous foreign brands.

The Vietnamese instant noodle market is forecasted to reach approximately VND26.6 billion ($1.17 million) by 2017. The market can be sub-divided into two segments: packet noodles (dry noodles sold in plastic packets which consumers must cook in a separate pot) and cup/bowl noodles.

The price of instant noodle in supermarkets ranges from VND2,500 ($0.11) to tens of thousands of VND per pack.