Vietnam Soft Drinks

In 2007, the soft drinks market continued to fare more strongly in Vietnam, with growth hitting 8% in both total volume and value terms. Products notably driving the stronger growth were fruit/vegetable juice, bottled water and RTD tea. Generally, the higher disposable incomes of the Vietnamese population over the review period helped boost the performance of soft drinks. More specifically, consumers are gravitating towards flavour, nutrition and convenience when they choose soft drinks. Increasingly towards 2007, Vietnamese consumers showed signs of paying more attention to health when choosing their soft drinks products, especially amidst more modern lifestyles and less healthy diets.
Whilst various soft drinks products showed very healthy growth in 2007, bottled water had the honour of seeing the fastest growth, with another year of double-digit volume growth. With the lack of potable tap water in Vietnam, the majority of the Vietnamese population has to rely on boiling tap water, with bottled water perceived as a more expensive product meant for middle and upper income consumers. Nonetheless, the potential for the acceptance of bottled water by the majority of the population is there, and with increasing standards of living, bottled water has enjoyed double-digit volume growth thanks to the expansion of the consumer base towards 2007. While the percentage growth rate has slowed down from its peak in the early review period, the actual increment in volume sales has continued to be highly encouraging, outpacing the growth of any other soft drinks products.
In 2007, the fierce competition between PepsiCo Vietnam and Coca-Cola Beverages Vietnam Co Ltd was still the biggest theme of the competitive environment in soft drinks in Vietnam. PepsiCo Vietnam still held on to its overall lead, thanks to its powerful promotional campaigns for its brands in 2007. While both companies owed their top positions to carbonates being the most popular soft drinks product in