Fish sauce market faces shakeup

The VND11.3 trillion fish sauce market is facing confrontation between two camps – makers of industrial fish sauce and traditionally made fish sauce.

According to the General Statistics Office (GSO), Vietnamese consume more than 300 million liters of fish sauce every year, 75 percent of which is industrial fish sauce, i.e. sauce made through industrial production lines, while the other 25 percent is made the traditional way.

Traditionally made fish sauce is favored as it fits the taste of the majority of Vietnamese, their long lasting habits and culture. However, its market share has narrowed because of low output and higher prices than industrial fish sauce.

The number of Phu Quoc Fish Sauce Association’s members has fallen from 80 in 2014 to 58. The others had to leave the market because they could not survive the stiff competition.

One of the reasons that traditional fish sauce workshops find it difficult to expand is their geographical position. The workshops have to be located near the sea. Each coastal province has famous fish sauce brands and hundreds of fish sauce production workshops. Locals prefer the fish sauce locally made.

According to Nielsen, from now to 2022, Vietnam’s spice market will see a stable growth rate of 25-32 percent, with the fish sauce market seeing the fiercestv competition.

The attractive fish sauce market had lured big investors such as Knorr Phu Quoc (Unilever), De Nhat (Acecook), Thuan Phat (ICP), Lien Thanh, Hanh Phuc, 584 Nha Trang and hundreds of fish sauce workshops.

Three years ago, Kinh Do, a sweets manufacturer, also announced a plan to join the instant noodle, fish sauce and vegetable markets as it could see the great potential there. Now Kinh Do can make instant noodle and vegetable oil; fish sauce is its next target.

While Kinh Do is still preparing for its plan, Saigon Securities Incorporated (SSI), whose core business field seems to have no relation to fish sauce, has jumped into the market.

Through PAN Company, SSI bought 22.35 percent of 584 Nha Trang worth VND14.7 billion in late April.

Analysts commented that 584 Nha Trang now holds only one percent of the market share, but expanding the market share isvwithin the reach of the merger & acquisition experts such as SSI.

The fish sauce market must be very promising as it can attract Ngoc Nghia Plastics Company as well.

Specializing in making PET packs, Ngoc Nghia decided to throw itself into an unfamiliar business field – fish sauce – in 2010 when it began developing Kabin and Thai Long fish sauce brands.

Chi Mai / vietnamnet