Coffee Has the Greatest Potential for Dynamic Value Growth in the Hot Drinks Market...

Wed Apr 2, 2008 10:00pm EDT

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Coffee Has the Greatest Potential for Dynamic Value Growth in the Hot Drinks Market in Vietnam

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c87437) has announced the
addition of new Euromonitor International report: Coffee in Vietnam to
their offering.

Our Coffee in Vietnam report offers a comprehensive guide to the
size and shape of the market at a national level. It provides the
latest retail sales data (2001-2006), allowing you to identify the
sectors driving growth. It identifies the leading companies, the
leading brands and offers strategic analysis of key factors
influencing the market - be they legislative, distribution or pricing
issues. Forecasts to 2011 illustrate how the market is set to change.

Product coverage includes: fresh coffee; instant coffee.

Data coverage: market sizes (historic and forecasts), company
shares and brand shares.

Why buy this report?

- Get a detailed picture of the coffee industry;

- Pinpoint growth sectors and identify factors driving change;

- Understand the competitive environment, the market's major
players and leading brands;

- Use five-year forecasts to assess how the market is predicted to
develop

Executive summary

High Growth for All Three Sectors in 2007

Sales of hot drinks reached VND3,770 billion in 2007, an increase
of 11% compared to 2006. Tea is the most valuable, with a share of
some 53% of total value. Coffee accounts for 30%, while other hot
drinks - primarily flavoured powder drinks - accounts for less than
18%. In terms of actual value increment, tea saw the most significant
gains in 2007, rising by VND173 billion, although both coffee and
other hot drinks also saw impressive gains (VND120 billion and VND73
billion respectively).

Large Domestic Production for Export

Vietnam is a country that has a suitable climate for cultivating
and producing coffee and tea. Vietnam has become the second largest
coffee and the seventh largest tea exporting country in the world.
However, consumption of coffee and tea in Vietnam is tiny compared
with production. Domestic producers concentrate on exporting rather
than expanding the domestic-market. Vietnamese coffee producers have
recently invested heavily in building more production facilities and
increasing the output of coffee, especially instant coffee, which they
intend to sell abroad.

Domestic Producers Dominate Coffee but Not Tea

Domestic coffee manufacturers such as Vinacafe - Vietnam National
Coffee Corp and Trung Nguyen Coffee Co Ltd dominate coffee and the
reason for this is easy to understand. Vietnamese Coffee players were
the first to trade domestically and can undercut any foreign imports.
This story is different for tea. Vietnam is also a big tea producer
and exporter, but foreign tea player's such as Unilever Vietnam, MJF
Group and Qualitea Ceylon (PVT) Ltd have won over domestic producers.
Domestic production was always intended to be exported. Foreign
players have marketed their goods at domestic Vietnamese consumers
whilst domestic producers have ignored them.

Strong Potential Left in Fresh Coffee and Black Tea Varieties

Hot drinks is expected to grow by a CAGR of 7% in constant value
terms, and 6% in volume terms. Coffee and other hot drinks have the
greatest potential for dynamic value growth, with forecast CAGRs of 8%
each in constant value terms. However, price competition in tea will
limit overall growth in average unit prices.

In coffee, fresh coffee will remain the most valuable, with sales
expected to increase by as much as VND414 billion by 2011,
overshadowing instant coffee, despite the latter's higher prospective
growth rate. In tea, black standard tea and speciality tea will
dictate overall growth, and remain the most valuable categories,
despite emergent niche growth for green tea and fruit/herbal tea.

Companies Mentioned:

Vinacafe

Trung Nguyen Coffee Co Ltd

Hung Phat Company Ltd

Tam Chau Tea & Coffee Co Ltd

For more information visit
http://www.researchandmarkets.com/reports/c87437.

Research and Markets
Laura Wood
Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com