Suntory PepsiCo predicts that social networks to have big impacts on the Vietnamese cuisine trends
industry is expected to maintain a strong growth in 2020 by 10.9% on average
due to people's improved income and consumption trends.
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.
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.
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.
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 faithand 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
Along with the
development of the economy, convenient bottled beverages have become a widely
consumed product accompanying Vietnamese people in daily life.
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.
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?
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.
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.
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.