VietNamNet Bridge – Dairy producers have stepped up production of condensed milk following a slowdown in growth from 2009 to 2014.
At its peak, about 312 million cans of condensed milk were being produced by domestic companies a year prior to the slowdown, while foreign-invested enterprises in Vietnam produced 92 million cans a year. The growth rate for production during this period was about 10 percent a year.
However, growth slowed in 2009-2014 to 3 percent per annum, the lowest growth rate among dairy products. The slower sales were attributed to changes in the taste of urbanites, who prefer fresh milk.
This trend was confirmed by a report from Habubank Securities that showed the sweetened condensed milk market was saturated with a low CAGR (compound annual growth rate) of 3 percent.
Such limited growth apparently dissuaded Vinamilk, which holds 79 percent of the market share, and Dutch Lady, with 21 percent of the market, from increasing investment in condensed milk.
Vinamilk, for example, did not include condensed milk as one of its eight dairy products in its promotion campaign.
So, it was quite a surprise when Vinamilk in January received a license to build a $24 million dairy factory in Cambodia under a cooperation contract with Cambodian Angkor Dairy Products Company Ltd.
Once the factory becomes operational, it will produce different kinds of dairy products, including 80 million cans of condensed milk.
Analysts believe that Vinamilk, which is striving to retain its existing market share, is also trying to expand its market as Friesland Campina Vietnam is investing less in the condensed milk market segment.
If there are only two main rivals in the market, Vinamilk believes that it can still make high profits from condensed milk products. In such a scenario, they would not have to spend much money on advertisements and marketing.
Distributors happy about salesVietNamNet/DNSG
Đăng ký: VietNam News
