Vietnam is now one of the most dynamic economies of the East Asia region. According to the World Bank, GDP per capita almost quadrupled between 2001 and 2021, while people lifted out of poverty rose by 10.2% in the decade between 2010 and 2020.
Also, although wine is not traditional Vietnamese drink, wine consumption is expected to reach 13.7ml by 2027. This appetite for wine, with expected revenues of $229.20m in 2023 and a volume increase of 2.5% by 2024, is buoyed by the country’s dynamic economy enjoying 7% annual growth over the past 23 years including a 3% rise during the pandemic period. Vietnam’s middle class of 15%, in a population of almost 100m, is expected to increase to 36m people by 2030 — offering more possibilities for increased wine consumption.
Who drinks wine in Vietnam
While low-cost beer accounts for 75% of alcohol sales, the emerging wine sector is driven by professionals 35 to 45 years, and consumers in their 50 to 70s who are shifting to wine as an alternative to high alcohol beverages.
On-premises sales account for 60% of the market. Wine is also bought by businesses for the gift market in the lead up to the Vietnamese New Year festival, which can generate up to 70% of wine sales, and as end-of-year gifts for clients and employees.
In 2020, 88% of wine sales in Vietnam were priced at less than $10 per bottle. Current price points are predicted to increase moderately over the next five years in line with domestic spending constraints and economic impacts. However, local consumers believe imported wines are of higher quality, and aspirational consumers are willing to pay more for perceived higher quality products.
According to David Dean, president of the Australian-Vietnamese Chamber of Commerce (SA), locally produced wines account for 25% of the market. They are mainly sourced from Lam Dong Province located in the Central Highlands, home to several large vineyards and wineries, including Dalat Wine City, the largest winery in Vietnam.
Chilean wines are the leading imported wine category with a 25% share, ahead of French wines at 19% and Australian wine at 7%, followed by Italian, and US brands. The bestselling wines are reds with around 65% of the market, followed by whites with 25%, and sparkling wines with 10%.
Consumer behaviour in Vietnam
The drinking culture in Vietnam is built around social etiquette, networking, and business relationships. Historically, there are crucial differences in alcohol consumption behaviors of people living in the main regions of Vietnam, as those from the North, Central and South share cultural and climate differences: a humid subtropical climate in Northern Vietnam with cold winters; a tropical monsoon climate in Central Vietnam; a tropical climate in Southern Vietnam with high temperatures and high humidity all year round.
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