Are large Vietnamese beer imports abnormal?

VietNamNet Bridge – Brewery products from Belgium, Germany, the US, Mexico, and theNetherlands have been flowing to Vietnam. The Ministry of Industry and Trade (MOIT) has allowed Vietnam Brewery Company to import a large volume of Heineken products.  According to customs agents, foreign products are flowing to Vietnam because of the sharp decrease in the luxury tax.

 VietNamNet Bridge – Viet Nam’s beer market would continue to be one of Southeast Asia’s largest and fastest growing, according to global market research firm Euromonitor International.

Euromonitor International sees continued expansion of the market, at around 5.6 per cent growth over the next few years, slightly behind Laos and Cambodia.

Viet Nam’s integration into the World Trade Organisation opened up more opportunities for investment and imports from foreign companies, particularly with the Government’s commitment to slash tax on imported beer, said Spiros Malandrakis, an analyst with Euromonitor International.

The country’s total beer sales experienced an significant increase of 56 per cent last year, topping 1.6 billion litres, the second fastest growth rate in the region after Cambodia.

Some foreign beer brands like Budweiser, Sapporo, San Miguel and Fosters have also entered the local market.

Last week, the Viet Nam Breweries Company opened a factory with the capacity to produce 50,000 bottles of La Rue beer per hour near the central city of Da Nang.

The company is a joint venture, newly-established between Asia Pacific Breweries (APB) from Singapore and Viet Nam’s Sai Gon Trading Group (SATRA).

As one of the first beer producers in Viet Nam after the country opened its doors to outside enterprise 20 years ago, APB plans to invest US$100 million in Viet Nam’s beer industry over the next 18 months.

Japan’s Sapporo also plans to link up with Tobacco Viet Nam to produce beer from 2012. The company said it would be the first Japanese brewery to build a production and marketing base in the promising Vietnamese market which has been growing at an annual rate of more than 10 per cent.

The US’s Crown Holdings Inc has already announced that it would invest another $25 million in its production facility in Tam Phuoc Industrial Zone in the southern province of Dong Nai. It bought the production line last June from Malaysia’s Interfood Shareholding Co.

Crown Asia Pacific Holdings Ltd’s chairman Josef Salaerts said the line, with a capacity of 600 million 330ml cans annually, could begin operations in the fourth quarter of this year, and its capacity would grow to 1.2 billion cans in a years time.

A report by British Business Monitor International Ltd predicted that earnings in Viet Nam’s alcoholic beverage industry were increasing 16 per cent annually.

Beer, which accounts for 97.9 per cent of total alcohol beverage consumption, was expected to see a growth in consumption averaging over 50 per cent per year through to 2013.

Beer market to increase by 15% this year

14:29' 13/01/2010 (GMT+7)

VietNamNet Bridge – Domestic beer producers will chum out roughly 2.7 billion litres of the drink this year to meet the rising demands of local consumers, according to an estimate by the Sai Gon Alcohol, Beer and Beverage Corporation (Sabeco). Sabeco, which currently accounts for roughly 35 per cent of domestic market share, also anticipated that the consumption of beer in the domestic market would have a growth rate of roughly 15 per cent in 2010 and in the next few years. However, it also warned that the next three years would be hard for domestic beer producers as special consumption tax on beers, excluding draught beer, would reduce from 75 per cent to 45 per cent. The tax on draught beer, meanwhile, would increase to 45 per cent from the current 40 per cent. "This will be a chance for high-quality beer products churned out by foreign beer producers to enlarge their market share," Sabeco said. Currently, local beer producers mainly concentrate on the draught beer market. Viet Nam has a lot of potential for beer producers as consumption in the country currently averages out at 14 litres per capita a year, much lower than around 40 litres in Indonesia and 160 litres in Germany, experts have said. According to Japan's Sapporo beer producer, Viet Nam is Asia's third-largest beer market after China and Japan in a fast-growing market. The domestic beer market has an annual growth rate of between 9 per cent and 11 per cent and is witnessing strong competition among many well-known brands, including Sai Gon, Ha Noi, Tiger and Heineken. Viet Nam has more than 300 beer and alcohol production facilities, with key producers including Sabeco and Viet Nam Brewery Limited Co. Sabeco alone this year has targeted to produce 1 billion litres of beer, compared with last year's 907 million litres of which 900,000 litres will be for export. Some foreign beer brands like Budweiser, Kronenbourg, SABMiller and Bitburger have also entered the local market. VietNamNet/Viet Nam News

VietNamNet/Viet Nam News

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As the World Drinks: AB InBev's Carlos Brito

Almost two years ago global brewing powerhouse InBev bought U.S.-based Anheuser-Busch for a staggering $52 billion, creating AB InBev, which now controls about a quarter of the world's beer market.

Carlos Brito, the company's CEO tells Big Think that “One of the beauties of this merger was to really enable Budweiser to become our global flagship brand.” Brito has been at the helm of AB InBev since 2005 (then simply InBev), and has seen the company through a series of mergers and acquisitions.  

AB InBev is a global company, in ever sense of the term.  The purchase of Budweiser brought an iconic national brand under the management of a company anchored abroad in Leuven, Belgium, and in San Paulo, Brazil.  AB InBev commands nearly a quarter of the market share and ownership of hundreds of beer brands. It produces upwards of 400 million hectoliters per year. Yet with all this global growth has come the concern about retaining national identity of the brands.  Is Budweiser still an American beer? Is Stella Artois still Belgian?

Brito answered this concern, as well as the issue of maintaining a brand’s national identity as it’s brought brought abroad.

Speaking about Budweiser’s global growth, Brito says, “Look at what Budweiser represents today in China. It’s by far the number one premium beer in China. You look at what it represents now in the U.K. more and more; what it represents in Canada, the number one brand; what it represents in the U.S.”  He adds that the brand recently has been brought to Russia, and plans are forming to bring it to Brazil.

“We’re going to take Budweiser to where it belongs, which is a global stage,” he says.

AB InBev has a portfolio over 200 brands, ranging from “local jewels” limited to one region or country to global brands, such as Budweiser, Stella Artois, and Beck’s, Brito says. 

Speaking with Big Think ahead of a company-wide day to promote responsible drinking, Brito spoke about why a company built on beer sales, and one that has had flagging sales in some sectors, would advocate less consumption.

“Excess consumption and consumers and volumes that come from consumers using our products in the wrong way is not what we need for our business,” he says. “We don’t need that kind of volume, that kind of consumer, to have a great business.”

by Big Think Editors 

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A thousand year of hairstyles

Hair design contest launched to celebrate Hanoi’s great anniversary

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VietNamNet Bridge - A hair design contest entitled “A thousand year of hairstyles” featuring Hanoi’s hairstyles for the last 1000 years, has been launched in Hanoi. 

The contest will give people a chance to have a clear view of the changes Vietnamese hairstyles have gone through during various historical periods in Hanoi.

The competition is for Vietnamese hair designers at home and abroad between 18 and 40 years of age.

The contest is divided into two categories including “Past” featuring different ways the hair was worn up, and “Present,” focusing on modern hairstyles.

Contestants must send photos of their designs and video clips, showing the process by which hairstyles are created, to the Tra Giang International Company, 55 De Quai Street, Tay Ho District, Hanoi, before August 10. Photos and video clips will be posted on website http://tgishow.net.

Miss Vietnam Mai Phuong Thuy in the ao dai and the hairstyle of Hanoian girls in the past.

Ten contestants will be selected for the final night on August 27 in Hanoi, which will be broadcast live on VTC1 channel.

The organizing board will present one first prize worth $4000, two second prizes worth 10 million dong each, two third prizes worth 5 million dong each and five consolation prizes worth 2 million dong each.

The competition is co-organised by Tra Giang International Company, the Embassy of Italy in Hanoi, Selective Professional hair care products and Chihtsai Hair Care.

PV

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From Spain, Big Reds That Are Well Balanced

RIBERA DEL DUERO is a paradoxical region, ancient yet thoroughly modern. Its wines embrace the mainstream characteristics that seem so popular around the world. They are plush, opulent, flamboyantly fruity and powerfully oaky. Yet while some unavoidably stray into the homogenized international style, the best remain identifiably Spanish.

What makes Ribera del Duero so unusual? Throughout European wine regions over the last 50 years the essential story has been how traditional wisdom and methods, honed over generations of careful observation, have come to terms with modern technology and globalization.

This conflict, felt in Old World vineyards and cellars, resonates with consumers around the world. Efforts to appeal to perceptions of global tastes have produced rivers of standard-issue wines, as bland as computer-generated car names. At the same time, a rising appreciation and understanding of fine wine around the world has meant unprecedented access to a wide diversity of wonderfully distinctive wines, some from appellations virtually unknown until a few years ago.

Gaze at Bordeaux and Burgundy, Barolo and Sicily, Rioja and the Rhone, even at Napa Valley, and you can find innumerable examples of this conflict playing out. And yet, if you look at Ribera del Duero, in the geographical heart of Spain, you see a place seemingly set aside from this central clash of cultures.

This paradox may seem peculiar against the backdrop of other Old World countries. But then again Spain has always stood apart from European winemaking powers like France and Italy. Because of regional tastes, politics and civil war, the Spanish wine industry got a far later start on modernization than its neighbors. Despite having grown grapes and made wine for centuries, the wines of Ribera del Duero never achieved high status.

The region had one significant exception. Vega Sicilia was established in 1864, and it rightfully came to be recognized as one of the world’s great wines. Beyond Vega Sicilia, it wasn’t until the 1980s that the region came to be seen as a source for fine red wines. By that time the Franco era had ended, Spain had joined the European Community, and modernization was well under way.

Unlike Rioja, where many producers had already been established by the early 20th century, Ribera del Duero, on a harsh, high plain southwest of Rioja, was dominated by cooperatives up until the 1980s. After pioneering efforts of a few producers like Alejandro Fernández in the 1970s, new wineries began to pop up. Without longstanding traditions of excellence to clash with new and fashionable ideas, modernity was largely unchallenged.

Success and acclaim came swiftly to Ribera del Duero in the 1990s, and it was hard not to make comparisons to Rioja. Both make red wines largely from the same grape, called tempranillo in Rioja and tinto fino in Ribera del Duero. The wine critic Stephen Tanzer once said Rioja is Bordeaux to Ribera del Duero’s Napa cabernet, and I think the analogy remains apt.

To check in on the current state of Ribera del Duero, the wine panel recently tasted 20 bottles in vintages ranging from 2003 to 2008. We capped our spending at $60 a bottle, which eliminated celebrated labels like Vega Sicilia and Pingus, which sell for hundreds of dollars each.

For the tasting Florence Fabricant and I were joined by Ashley Santoro, the wine director at Casa Mono, a Spanish restaurant near Gramercy Park, and Sean Josephs, the owner of Char No. 4, a Southern restaurant in Brooklyn, who comes by his knowledge of Spanish wines both as a former sommelier and as the husband of Mani Dawes, an owner of Tía Pol, a tapas bar in Chelsea, and Tinto Fino, a Spanish wine shop in the East Village.

Let’s stipulate that almost all the wines we tasted were very well made. How you feel about them will depend largely on your stylistic preferences.

“I’m torn between the fact that there’s a lot of quality, but not finding wines that excite me personally,” Sean said. He added that when he worked at a steakhouse, he sold a lot of Ribera del Duero as an alternative to California cabernet.

I can see that. More than California, I thought of these big, modern wines as the malbecs of Spain, well tuned to a popular pitch.

“People are comfortable with them, and they’re easy to sell,” Ashley said. Still, she suggested that what is exported from Ribera del Duero doesn’t entirely reflect the range of styles available there.

Even if these wines are not particularly to my taste, what I looked for was balance, which characterized our top wines. The 2005 Montecastro, our No. 1 bottle, was dense and juicy, but rather than an overwhelming mouthful of sweet fruit, the plummy, berry flavors were tempered by a spiciness that added nuance, as well as vivacious acidity.

By contrast our No. 2 wine, the 2004 Tinto Figuero Reserva from García Figuero, which is aged in barrels for 15 months, was big, powerful and ultradark. It didn’t have the complexity of the Montecastro yet it, too, was well balanced. Tannins gave the wine shape and structure, and an earthiness blended well with the dense fruit flavors.

Our No. 5 wine, the 2006 Tinto Pesquera from Alejandro Fernández, who played a crucial role in the rise of Ribera del Duero, typified the well-balanced blend of fruit and oak flavors we found in so many of these wines. The 2006 Condado de Haza, which is also owned by Mr. Fernández, offered a fresher, less oaky approach, without the density that seemed to prevail.

Next to the other bottles, the 2008 Sastre Tinto stood out for its directness, simplicity and refreshing lack of polish. At $22, it was also our best value.

In the end, it pretty much comes down to taste. If you enjoy modern California cabernets, Argentine malbecs and new wave Riojas, these wines should be just right for you. If you prefer old-school Riojas, classic Rhones and wines that show an herbal touch now and then, these may not be for you. Better to wait and to hope for a benefactor to pour you a glass of Vega Sicilia someday.

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Billionaire Mallya's UB Group-india to Buy Heineken Venture, Alcohol Maker Stake

Billionaire Vijay Mallya’s UB Group will buy a stake in an Indian alcohol maker and merge its breweries, including a venture with Heineken NV, with United Breweries Ltd., the owner of the nation’s biggest beer brand.

United Breweries, the Bangalore-based maker of Kingfisher beer, rose as much as 2.9 percent to 448 rupees in Mumbai. The shares traded at 439.10 rupees as of 12:01 p.m. local time after the brewer said in a stock exchange filing it would absorb the group’s brewery units and acquire Millennium Alcobev Pvt., its venture with Amsterdam-based Heineken.

United Spirits Ltd., the group’s whiskey and rum making unit, separately announced that it would buy a 54.7 percent stake in Pioneer Distilleries Ltd. to boost capacity. United Spirits fell 1.3 percent to 1,602.30 rupees.

The Pioneer purchase will increase United Spirits’ alcohol manufacturing capacity by 160 kiloliters a day, according to the statement.

United Spirits will spend 740 million rupees ($16 million) to buy 7,322,280 shares of Pioneer at 101 rupees apiece, or a 44 percent premium to the stock’s closing price yesterday. Pioneer rose as much as 5.1 percent to 73.85 rupees. United Spirits will also make an open offer for a further 20 percent of Pioneer.

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Pepsi has the advantage in Hindi

NEW DELHI — Coca-Cola Co. offered to buy a refrigerator for Rajesh Yadav's store if he would sell only the company's drinks.

Yadav kept his part of the bargain: Lines of Coke and Diet Coke cans glisten behind the glass screens of the fridge. A red-and-white banner with a Bollywood film star chugging a bottle adorns his storefront.

Yet Yadav doesn't mention his partner when he describes his shop.

"I sell Pepsi and cigarettes," Yadav said in Hindi, India's most widely spoken language.

Still, he isn't reneging on his deal. Pepsi became a synonym for cola in Hindi after having the market to itself for three years until 1993 — a linguistic advantage that translates into higher sales. Its cola brand's market share is 73 percent greater than Coke's, according to Euromonitor, a consulting firm.

Coca-Cola had pulled out of India in 1977 after a change in government regulations would have forced it to partner with an Indian company and share the drink's secret formula. PepsiCo Inc. joined with two Indian companies and introduced Lehar Pepsi in 1990. Coke re-entered the market in 1993, after foreign brands were allowed to operate without Indian partnerships.

"Pepsi got here sooner, and got to India just as it was starting to engage with the West, and with Western products," said Lalita Desia, a linguist at Kolkata's Jadavpur University who studies how English words enter Indian languages. "And with no real international competition, 'Pepsi' became this catch-all for anything that was bottled, fizzy and from abroad."

In much of the Hindi-speaking belt of northern India, home to three of the five most populous states, children begging at street corners will point to bottled juices inside cars and plead for "Pepsi." Mahipal Singh, who drives a truck route between Delhi and Bihar, terms his rest stops "Pepsi-wepsi" breaks, regardless of what he is drinking.

"Saying 'Pepsi' connotes getting a soft drink," said Kiran Bhushi, an anthropologist at Indira Gandhi National Open University who researches middle-class consumption patterns and has consulted for both companies. "How exactly does someone like Coke dislodge this idea from a consumer's brain?"

Tea on top

Coca-Cola must also contend with consumer preferences for other drinks. About 90 percent of India's beverage market is composed of tea, milk and coffee-based drinks, with bottled soft drinks holding less than 5 percent, according to Harish Bijoor, who runs a brand consulting and strategy business in Bangalore. The company relies on drinks other than Coke to be the country's top beverage seller.

"Cola in India is still an evangelical task, because it's not a lifestyle habit yet," Bijoor said.

Coca-Cola needs growth in overseas markets to offset at least four years of declining U.S. sales volumes for its soft drinks.

India's economy expanded 8.8 percent in the three months through June. Growth in the United States, the biggest market by revenue for both Coca-Cola and PepsiCo, slowed to 1.6 percent.

Sales by volume in India surged 31 percent in 2009, Coca-Cola Chief Executive Officer Muhtar Kent said in February without providing specific numbers. Indian sales of Coca-Cola, Diet Coke and Coke Zero grew 25 percent, according to the company's annual report. Last year, Coca-Cola turned a profit in India for the first time since re-entering the country in 1993 after a 16-year absence, according to spokesman Kamlesh Sharma.

While Coca-Cola uses the cola brand to drive market share in other countries, its top three products in India by sales volume are Kinley bottled water, Thums Up cola, and Sprite, according to Euromonitor. Mirinda ranks fourth and the Coca-Cola brand is at No. 5. Thums Up, a lemon drink called Limca, and an orange drink called Gold Spot were acquired by Coca-Cola in 1993.

"Pepsi is bigger than Coke as a brand, but Coke as a company has very smartly introduced other brands that have done very well," said Bijoor, the consultant.

That's Coca-Cola's strategy, said Atul Singh, the Atlanta-based company's president for India and South West Asia.

"We want every part of our portfolio to grow, so that any consumer, on any occasion, anywhere in India, makes a choice to drink a Coca-Cola product," he said.

Going after new business

Purchase, N.Y.-based PepsiCo, the world's largest snack-food maker, will invest "aggressively" in emerging markets, according to Chief Executive Officer Indra Nooyi. Last year's sales in Asia, the Middle East and Africa grew 12 percent. In India, retail sales of its products, including Frito-Lay potato chips, Quaker Oats and fruit juices such as Tropicana, are worth $1.5 billion. PepsiCo had $43.2 billion in sales last year.

"The Pepsi brand becoming the default name for the cola category is certainly a big positive," spokesman Sandeep Arora said in an e-mail. "It can also be a double-edged sword if the marketer is not able to differentiate the brand from the rest of the category."

Coca-Cola has run an advertising campaign called "Thanda Matlab Coke" ("Cold Means Coke"). North Indians use "thanda," the Hindi word for cold, as a noun when offering someone a drink.

"It was definitely a good idea," said Bhushi, the anthropologist. "If Pepsi means cola, then emphasizing that a 'thanda' means Coke is perhaps the best way to gain control of the vocabulary."

"Thanda Matlab Coke" runs across the red-and-white poster at Yadav's New Delhi store. His biggest seller, though, isn't Coke.

"People ask for Pepsi, and I give them a Thums Up or a Coke," he said. "Thums Up they don't mind, but Coke, sometimes they say no."

Bloomberg News

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