Vietnam’s Beer Market Rebounds, but Challenges Persist

Vietnam Insider – Vietnam’s beer industry is showing signs of recovery in 2024 after a turbulent year, with profits rebounding across major brewers. However, the sector continues to face significant headwinds ranging from shifting consumer preferences to regulatory tightening.

Heineken-Backed Turnaround for Satra

The Saigon Trading Group (Satra) recently reported a sharp 37% increase in post-tax profits, totaling over VND 3.1 trillion (US$120.8 million) for 2024. This strong performance was primarily driven by a 24% surge in earnings from joint ventures and affiliated companies, contributing VND 3.4 trillion (US$132 million).

While Satra did not specify the sources behind the gains, industry watchers point to its longstanding partnerships with Heineken Vietnam Brewery and Heineken Vietnam Beer and Beverage Company, where it holds a 40% stake in each. These two ventures are key players in Heineken’s nationwide operations and have been instrumental in Satra’s earnings rebound.

This marks a notable recovery after Satra’s joint venture income plunged nearly 47% in 2023, dragging its profits to less than half of 2022 levels.

Market Controlled by Four Giants

According to data from Euromonitor International, cited by Mirae Asset Securities, Vietnam’s beer market is highly concentrated, with four companies—Heineken, Sabeco, Carlsberg, and Habeco—controlling over 90% of the market share.

Sabeco, the country’s largest domestic brewer, posted VND 32.2 trillion (US$1.2 billion) in revenue and VND 4.5 trillion (US$172.5 million) in post-tax profit for 2024—up 5% and 6% respectively from the previous year.

Habeco also reported improvements, with revenue rising 5% to VND 8.3 trillion (US$318 million) and after-tax profit increasing 10% to VND 391 billion (US$15 million).

These figures reflect a slow but steady recovery in beer consumption, although rising production costs and fierce market competition have compressed profit margins.

Vietnamese Still Among Top Beer Consumers

Beer remains deeply embedded in Vietnamese culture, with per capita consumption holding steady at around 43 liters per year, according to Mirae Asset Securities. Between 2009 and 2023, consumption grew at a compound annual growth rate (CAGR) of 4.7%.

Looking ahead, growth is expected to decelerate to about 2% annually from 2025 to 2030, driven by macroeconomic factors including rising incomes, a youthful population, urbanization, and a rebound in tourism.

Health Trends Fuel Demand for Non-Alcoholic Beer

A growing segment of Vietnamese consumers is becoming more health-conscious, driving demand for light and non-alcoholic beers such as Heineken 0.0, Sabeco’s Sagota, and Budweiser Zero. However, non-alcoholic beer remains a niche, comprising just over 3% of total beer consumption.

Challenges for this segment include higher prices, less appealing flavor profiles compared to traditional brews, and consumer skepticism regarding residual alcohol content.

Industry Outlook: Uncertainty Lingers

Despite recent improvements, Vietnam’s beer sector still faces structural challenges. High input costs, evolving consumer tastes, increasing regulatory scrutiny, and heightened competition continue to weigh on growth prospects.

At the close of Q1 2025, Habeco reported modest profits, while Sabeco showed signs of plateauing, raising concerns about its long-term momentum. Meanwhile, smaller breweries are struggling to stay afloat, with several continuing to operate at a loss.

As the industry navigates this transitional period, market leaders are expected to pivot toward innovation, healthier product lines, and digital marketing strategies to capture the evolving preferences of Vietnam’s next generation of beer drinkers.

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Source: Vietnam Insider