Beverages greatest contributor to FMCG growth

Beverages accounted for the largest proportion of all fast-moving consumer goods (FMCG) sales in the first quarter of this year, at roughly 45 per cent, according to the Quarterly Market Pulse report released by Nielsen Vietnam.



Following were cigarettes and foods, with slightly below 19 per cent and 13 per cent, respectively.

FMCG growth nationwide in the first quarter reach a three-year high of 9.6 per cent versus 5.3 per cent last year, mainly driven by an impressive 8.5 per cent volume growth.

When looking deeper into the six super FMCG categories (Beverages, including beer, and Food, Milk Based, Household Care, Personal Care, and Cigarettes), the recovery was reflected in positive growth in all six.

Four of the six saw double digit growth in the quarter: Food, Household Care, Personal Care, and Milk Based, with 13.9 per cent, 12.4 per cent, 12.2 per cent, and 10.3 per cent, respectively. Beverages grew 9.1 per cent and Cigarettes 5.6 per cent.

“The positive sentiment during the Lunar New Year helped drive FMCG growth, as consumers were willing spenders and retailer sentiment also improved,” said Mr. Nguyen Anh Dung, Director - Retail Measurement Services at Nielsen.

“It was the first time in three years we saw positive growth across all categories.”

Rural has constantly grown as a new source of growth for many manufacturers over recent years and this was again the case in the first quarter.

The report revealed that rural grew 12.4 per cent, contributing 51 per cent to total FMCG sales nationwide, while urban only rose 6.5 per cent. The good news was that the pick-up from both urban and rural was mostly driven by volume increases.

Despite the slowdown in the rural sector due to agricultural challenges seen last year, the sector has bounced back strongly, according to Mr. Dung.

Over 60 per cent of Vietnam’s population live in rural areas and there are excellent opportunities for companies in the sector.

Rural consumers have rising incomes and greater access to product information than ever before, through the internet and their uptake of smartphones.

“Manufacturers that have access to the latest knowledge and information on rural trends and consumer demands will be best placed to capture growth opportunities,” Mr. Dung said.

VN Economic Times