Vietnam Consumer Packaged Goods (CPG) Market Outlook to 2030

Vietnam Consumer Packaged Goods (CPG) Market Overview

• The Vietnam Consumer Packaged Goods (CPG) Market has experienced significant growth, this is reflected by the Vietnam Consumer Goods Market reaching a valuation of USD 52 billion in 2023. This growth is driven by increasing consumer spending, retail expansion and rising e-commerce in the market.
• The key players in the Vietnam CPG market include TH Group, Acecook Vietnam, Kinh Do Corporation, Sabeco, and PepsiCo Vietnam. These companies have established strong brand presences and extensive distribution networks, enabling them to maintain significant market shares.
• Ho Chi Minh City and Hanoi are Vietnam's primary economic and financial hubs, holding much of the nation's wealth and consumer base. Ho Chi Minh City boasts a substantial population and dynamic economic activity, while Hanoi, the capital, plays a crucial role in financial sectors, contributing significantly to economic growth. Both cities are central to Vietnam's economic development.
• In March 2023, Vinamilk launched a new line of eco-friendly packaging for its dairy products in response to the growing consumer demand for sustainable options. This initiative is expected to reduce plastic use by 200 tons annually. The move underscores Vinamilk's commitment to sustainability and sets a benchmark for environmental responsibility in the consumer packaged goods (CPG) industry.

Vietnam Consumer Packaged Goods (CPG) Market Segmentation

By Product Type: The Vietnam Consumer Packaged Goods (CPG) Market is segmented by product type into packaged foods, beverages, and household care. In 2023, the ready-to-eat (RTE) meals segment accounted for a substantial portion of the packaged foods market, highlighting significant consumer preference for convenience foods. Beverages include both non-alcoholic and alcoholic options, ranging from soft drinks to spirits.

By Distribution Channel: The Vietnam Consumer Packaged Goods (CPG) Market is segmented by distribution channel into supermarkets and hypermarkets, convenience stores, online retailing, and others. In 2023, Supermarkets and Hypermarkets held a dominant market share, serving as the primary shopping destination for Vietnamese consumers due to their wide range of products and the convenience of one-stop shopping. These outlets are prevalent in urban areas, significantly influencing consumer buying patterns.

By Region: The Vietnam Consumer Packaged Goods (CPG) Market is segmented by region into North, South, East, and West. In 2023, the South region led the Vietnam Consumer Packaged Goods (CPG) Market due to its higher urbanization rate, economic growth, and increased consumer spending. This region's dynamic retail environment and robust infrastructure further boosted its market dominance.

Vietnam Consumer Packaged Goods (CPG) Market Competitive Landscape

• Vinamilk:  In July 2023, Vinamilk received accolades for 11 of its products at the Superior Taste Award, bringing its total to 19 recognized items. This achievement underscores Vinamilk's commitment to quality and innovation, particularly following its rebranding campaign. Notable products recognized included Vinamilk 100% Fresh Milk and various yogurt flavors, which were praised for their taste and nutritional value. The awards highlight the company's dedication to quality, as products are evaluated by over 200 experts based on criteria such as taste, texture, and overall packaging experience.
• Masan Consumer Holdings: Masan Consumer Holdings launched a new health-focused product line in early 2024, which includes fortified beverages and snacks. This initiative aligns with the growing consumer emphasis on health and wellness, responding to increased demand for healthier options. The company introduced energy drinks with reduced sugar and salt content, among other innovations aimed at promoting everyday health and immunity.

Vietnam Consumer Packaged Goods (CPG) Market Analysis

Vietnam Consumer Packaged Goods (CPG) Market Growth Drivers

• Expansion of Retail Infrastructure: The rapid expansion of retail infrastructure in Vietnam, particularly in suburban areas, has significantly boosted the accessibility and visibility of CPG products. In 2024, USD 276.37 billion, 150 new supermarket and hypermarket outlets, according to the Vietnam Retailers Association. This expansion is supported by a government initiative aimed at modernizing retail infrastructure to enhance consumer access to goods.
• E-commerce Surge: E-commerce sales for CPG products in Vietnam saw a remarkable increase, with a recorded 25% growth in online transactions in 2024 compared to the previous year, as reported by the Vietnam E-commerce Association. This growth is facilitated by enhanced logistical capabilities and increased internet penetration, reaching 70% of the population in urban areas.
• Health and Wellness Trend: The Vietnamese CPG market is witnessing a significant shift towards health and wellness products. Consumers are increasingly opting for organic and natural items, reflecting a growing awareness of health benefits. This trend is bolstered by various health awareness and education campaigns spearheaded by the Ministry of Health, encouraging consumers to make healthier choices. The rising demand for these products indicates a broader move towards a healthier lifestyle among the Vietnamese population.

Vietnam Consumer Packaged Goods (CPG) Market Challenges

• Regulatory Compliance: While the introduction of Decree 15/2018/ND-CP has streamlined food safety regulations, the responsibility of self-declaring compliance places a significant burden on food businesses to accurately assess and ensure adherence to safety standards. This shift may lead to inconsistencies in compliance and increased risk for companies that may lack the necessary expertise or resources to navigate the new regulations effectively.
• Intensified Competition: The increasing presence of international brands in Vietnam's consumer packaged goods (CPG) market has created a highly competitive landscape. With foreign companies capturing around 40% of the market share as of 2024, domestic producers face pressure to innovate and enhance their product offerings. This competition requires local companies to invest in research and development, marketing, and operational efficiencies to maintain their market position, which can be a daunting challenge, especially for smaller businesses with limited resources.

Vietnam Consumer Packaged Goods (CPG) Market Government Initiatives

• E-commerce Development Plan: The Vietnamese government has launched the E-commerce Development Plan, which aims to boost the growth of online retail and enhance digital infrastructure across the country. The plan aims for B2C e-commerce sales to reach USD 35 billion by 2025, with an annual growth rate of 25%.
• Trade Liberalization Policies: Vietnam has been actively establishing strategic trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA). These agreements are designed to reduce tariffs and enhance market access for CPG products, which is expected to foster a more competitive market environment and stimulate growth in exports of Vietnamese CPG products.

Vietnam Consumer Packaged Goods (CPG) Future Market Outlook

In 2028, the Vietnam Consumer Packaged Goods (CPG) Market is poised for substantial growth, driven by trends such as biodegradable packaging, plant-based alternatives, and tech-enhanced shopping experiences. This growth is anticipated to be supported by consumer demand for sustainable products and innovative shopping technologies, shaping the future of the market.

Future Trends:

• Emergence of Private Label Brands:  By 2028, the CPG market will likely witness a significant rise in private label brands, as consumers increasingly seek value-for-money options. Retailers are expected to expand their private label offerings, which could account for a substantial share of the market. This trend will challenge traditional brands to differentiate themselves and maintain market share in a competitive environment.
• Eco-friendly and Sustainable Practices: By 2028, sustainability will become a crucial factor in consumer decisions within the Vietnam CPG market. Companies are expected to significantly increase their investment in sustainable practices, including the adoption of eco-friendly packaging, waste reduction programs, and energy-efficient operations. This shift will not only cater to growing consumer demand for environmentally responsible products but also help companies align with stricter global environmental standards and regulations.