Corporate News

Suntory PepsiCo predicts that social networks to have big impacts on the Vietnamese cuisine trends

The beverage industry is expected to maintain a strong growth in 2020 by 10.9% on average due to people's improved income and consumption trends.

Recently, the US-ASEAN Business Council held a meeting to welcome nearly 50 US businesses to Vietnam to explore investment business opportunities. On this occasion, Brand Vietnam had an interview with Mr. Jahanzeb Qayum Khan, CEO of Suntory PepsiCo Vietnam Beverage from his point of view on the business investment environment in Vietnam, as well as the beverage trend forecasts in Vietnam in the coming years.


Mr. Jahanzeb Khan, CEO & GD of Suntory PepsiCo Vietnam Beverage Company

* Since entering Vietnam market, how has the business environment in Vietnam changed in your opinion?

We started our business in Vietnam in 1994. At that time, the US had lifted its embargo on Vietnam and the wave of FDI enterprises investment into Vietnam has been just begun. In investors’ opinions, the Vietnamese market was a potential land but also contained many risks at that time, because it was a very new one.


However, thanks to the favourable conditions of the Vietnamese government and the public reception, we have quickly realized that this is a stable and sustainable market for long-term investment business.


Vietnam has made admirable economy development over the past 25 years together with the significantly improved quality of the business environment. In my opinion, Vietnam economy will continue to have great development in upcoming time.


After GDP peaked at 7.1% growth in 2018, the economy got stagnant slightly in 2019, but it is still expected to grow at least 6.5% in 2020 and 2021. The annual inflation rate has been been stable at a single figure for 7 consecutive years and often less than 4% in recent years.


Vietnam has controlled well the trade balance and significantly improved the indicators of business environment quality as World Bank reports. These have convinced foreign investors like us to put more faith and increase the investment limit in this market. The wave of nearly 18 billion US dollars FDI investment into Vietnamese market in 2018 is  a proof.
Demographic structure of Vietnam has also changed greatly. Vietnam's population reached 97 million in 2018 and is expected to grow to 120 million by 2050. With 70% of the population under the age of 35, Vietnam is clearly a very attractive market, especially for a fast-moving consumer good businesses like us.

Vietnam is also one of the countries with the highest human capital index (HCI) among the world's middle-income countries. This is beneficial for foreign investors in Vietnam, as a quality human resources with high labour productivity will result in smooth business operation.
Vietnam's business environment promises to be improved and upgraded very quickly in the future due to stable economic growth, a young population structure and high human capital index.


* According to Suntory PepsiCo, how has the beverage trend of Vietnamese consumers changed since PepsiCo entered Vietnam?


At the time we started business in Vietnam, bottled beverages were still a luxury product for Vietnamese consumers. To enjoy a bottle of Pepsi, consumers had to spend an amount of money equivalent to 1/6 of their average daily income then. The usual drinks of Vietnamese people at that time were green tea, eugenia water, iced tea, etc.


Along with the development of the economy, convenient bottled beverages have become a widely consumed product accompanying Vietnamese people in daily life.


In recent years, consumers demand that their drinks are not only delicious but also healthy. This has motivated us to promote research and sell more nutrition products, containing natural ingredients that is good for consumers’ health.

Obviously, due to the improved living standards, consumers' demands are also “stricter” with the products they choose to put into their bodies. This is both a challenge and a motivation for us to improve our product quality, catching up with consumers’ needs, and even creating new trends in the beverage industry.


* How does Suntory PepsiCo forecast the beverage consumption trend in Vietnam in the next 3-5 years?

The beverage industry is expected to maintain strong growth in 2020 with an average growth rate of 10.9% due to people's improved incomes and overwhelming higher value products. In the coming years, products containing healthy ingredients and clear origins are still consumers’ favourable choices.


In addition, the cuisine experience of consumers will be strongly influenced by social networks as the rise of website and applications sharing comments on the quality of food and drinks. Businesses should be aware of this as participating in the market during this period.

In addition, the convenience and serving speed will be brought to a new level with the expansion of product distribution channels and 24/24 food and beverages delivery apps.