Category: Food

Retail News Asia is committed to providing both local and global retailers with the latest Food and Food & Beverage news throughout the Asian market. This on a daily base.

  • Domino’s Poised for Global Expansion, Opens 14000th Store

    Domino’s Poised for Global Expansion, Opens 14000th Store

    Domino’s Pizza, the recognized world leader in pizza delivery, is celebrating the grand opening of its 14,000th store in in Cyberjaya, Malaysia, outside of the nation’s capital of Kuala Lumpur.

    “It was just eight months ago that we cut the ribbon on our 13,000th store and here we are already celebrating another milestone – our 14,000th store,” said Patrick Doyle, Domino’s president and CEO. “Last year we were opening, on average, a new Domino’s store every seven hours. Our global growth has been tremendous. The story of our brand is clearly one of incredible momentum and brand resonance worldwide.”

    The new store is also a milestone for the Malaysian market, as it marks their 200th store opening. It is also the 3,500th Domino’s store in the Asia-Pacific region. The master franchisee for the market, Dommal Food Services Sdn. Bhd., opened the first store in Malaysia in 1997 and has successfully made Domino’s one of the most recognized brands in the country.

    Domino’s 14,000th store features the pizza theater store design, which is open concept and brings the art and fun of pizza making to the forefront. It features indoor seating and allows customers to watch their pizzas being made, each step of the way. The milestone store is in the innovation hub of Malaysia, Cyberjaya, as technology is a central focus of the brand in Malaysia.

    “We have been building beautiful new stores around world at an impressive pace, thanks to the hard work, commitment and passion of our franchisees worldwide,” said Richard Allison, president of Domino’s International. “Our goal to become the No. 1 pizza company in the world – with the best customer service, serving high quality food, with inviting stores and leading technology – is being executed every day in countries like Malaysia and around world.”

    Domino’s operates in over 85 markets worldwide. Domino’s had global retail sales of nearly $10.9 billion in 2016, with more than $5.3 billion in the U.S. and more than $5.5 billion internationally.

  • Diageo rolls out small Johnnie Walker Black Label

    Diageo rolls out small Johnnie Walker Black Label

    Diageo has launched a 20cl bottle of its Johnnie Walker Black Label as it looks to make whisky more accessible to consumers in South Korea.

    The new pack, which rolled out yesterday, follows a launch for a 20cl Johnnie Walker Red Label last October, the firm said. The 20cl bottle comes with lemon syrup and a recipe for a ‘Johnnie Lemon’ cocktail.

    “Diageo Korea has worked to promote a new drinking culture that makes whisky more accessible to local consumers in various ways,” said Diageo Korea CEO Cho Kilsoo. “Following a small format of Johnnie Walker Red launched last year, the new Johnnie Walker Black Label 20cl is expected to contribute to building a new whisky culture that enables people to enjoy whisky more casually.”

    The new product will be available through convenience stores and hypermarkets, nation-wide. Diageo said the packs will be priced at about KRW16,000 (US$13.99). Red Label packs retail at around KRW8,500.

  • Failed Pepsi, Nivea ads show industry’s diversity problem

    Failed Pepsi, Nivea ads show industry’s diversity problem

    ‘Between Nivea’s ‘white is purity’ ad and Pepsi’s ‘Black soda matters’ ad, I think it’s time to open my ‘Ask a Black person’ consulting firm.’ Recent high-profile advertising missteps by Pepsi and skin-care company Nivea underscored anew Madison Avenue’s awkward relationship with racial diversity at a time when the United States is becoming less white.

    PepsiCo’s ill-fated “Moments” spot, featuring model Kendall Jenner, was quickly pulled with an apology after being vilified for trivializing the “Black Lives Matter” movement.

    Nivea also apologized and withdrew an ad for a deodorant after its “White is Purity” pitch was embraced by white supremacists.

    Social media had a field day with the botched campaigns, which seemed to suggest scant progress from the white male bubble of the 1960s depicted in the popular television series “Mad Men.”

    “Between Nivea’s ‘white is purity’ ad and Pepsi’s ‘Black soda matters’ ad, I think it’s time to open my ‘Ask a Black person’ consulting firm,” comedian Travon Free said on Twitter.

    In fact, data shows a diversity deficit in a sector that both reflects and molds public sentiment.

    Only 4.1 percent of advertising industry employees in the country are African Americans, well below their 13.3 percent of the overall population. Latinos account for 12.3 percent of the industry, compared with 17.6 percent of the population.

    Nearly half of respondents among advertising employees said the industry was “terrible” or “not great” at hiring diverse professionals, with another 25 percent describing it as “mediocre,” according to a survey released last September by the American Association of Advertising Agencies.

    The trade group’s outgoing president Nancy Hill made publicly calling out “racist and misogynistic behavior” her New Years resolution for 2017.

    “I have realized given the current climate in our country and our industry, that doing that privately is tantamount to condoning the behavior,” Hill said in a column on a marketing industry website.

    “Others involved need to know that this industry does not tolerate this kind of thinking and its resulting behavior any longer.”

    Some major advertisers, such as Verizon, General Mills and Hewlett-Packard have threatened to fire firms that aren’t diverse enough.

    Pepsi misfires

    The demise of the Pepsi spot has especially provoked intense discussion throughout the industry. The company is led by Indian-born chief executive Indra Nooyi, a vocal proponent of diversity.

    A poll showed 40 percent on respondents blamed the debacle on lack of diversity or diversity of thought, while 25 percent said it reflected an overzealous approach to attracting millennials and 13 percent blaming the fact that it was made by Pepsi’s in-house creative team and did not involve an outside firm.

    The spot follows Jenner as she is stirred from a fashion shoot by a handsome Asian cellist to join an unspecified but peaceful street protest with people of all ethnicities, including African American street dancers.

    The two-and-a-half minute short film culminates with Jenner handing a Pepsi to a handsome grinning police officer, a move that draws wild applause from the crowd, including from a hijab-wearing photographer who nods in agreement as she records the moment.

    The spot spurred instant ridicule, most witheringly from Bernice King, who posted a picture of her father, Martin Luther King, being apprehended at a civil rights march by police.

    “If only Daddy would have known about the power of #Pepsi,” King wrote on Twitter.

    History repeating?

    Kelly O’Keefe, a professor of brand strategy at Virginia Commonwealth University, said the spot was shockingly heavyhanded in its constant hawking of cola.

    It reflected a “cloistered view of the world and distorted view of diversity,” he said, adding that the spot has dominated discussion in class this week.

    Jake Beniflah, executive director of the Center for Multicultural Science, thought the ad was a spoof when he first saw it because of the omnipresence of the product and in its creation of “utopian” world where every race is shown.

    “Perhaps they thought diversity on camera was enough, but obviously it wasn’t,” Beniflah said. “In fact, it backfired.”

    For Judy Davis, a marketing professor at Eastern Michigan University, the controversy stirred memories of Barbara Gardner Proctor, one of the women she profiled in her book, “Pioneering African American Women in the Advertising Business: Biographies of MAD Black WOMEN.”

    Proctor was fired in the 1960s from a large firm when she refused to work on a campaign that showed black women clamoring in the street for a hair product. The ad was a tasteless allusion to the civil rights movement, she said.

    “It was the same kind of trivialization of a serious social movement and taking that to promote some brand,” Davis said.

    “You would think in 2017 things would be different. But here we are seeing some of the same problems that were present 50 years ago, and I think that’s pretty amazing.”

  • Vietnam moves ceiling price mechanism for dairy products

    Vietnam moves ceiling price mechanism for dairy products

    The Government removed price ceilings on dairy products for children under six from April 1, 2017 according to the Ministry of Industry and Trade’s proposal.

    The Government has direct the ministry, other ministries and related agencies to manage prices of dairy products for children under six according to the Law on Price and other legal documents. They were also told to enhance State management in price control, anti-speculation and monopoly controls.

    After three years of use, the mechanism had many limitations so abolishing the mechanism was necessary and suitable with price management measures in a market economy.

    Experts said after removing the ceiling price mechanism, the State should encourage competition and a healthy business environment. They also suggested the State regulate the price if a firm gains a monopoly of dairy products or if dairy firms violate the Law on Competition.

    The most important task of the price management agency should be to follow the development of factors used to calculate the selling price. The agency should manage the prices of dairy products according to market rules, the experts said.

    Price ceilings were put in place in May 2014 by the Ministry of Finance. At the end of the second quarter of 2015, the ministry extended the price ceiling to March 1, 2017.

    The Ministry of Finance’s Pricing Management Department said after stabilising milk prices, the prices dropped by between 0.1 per cent and 34 per cent for milk products for under six year-olds.

    Experts said in the short term, buyers have enjoyed lower prices thanks to the price ceiling. But in the mid and long term, the mechanism would hinder the development of milk firms and reduce competition.

    They said the price ceiling for dairy products of children under six would not be for the long term because Việt Nam signed free trade agreements that forbade it from using price ceilings to manage the market.

    At present, 877 milk products for children under six have their prices listed on the websites of the Finance Ministry and local finance departments across the nation.

  • Coffee industry in Vietnam turns bitter

    Coffee industry in Vietnam turns bitter

    The Ministry of Agriculture and Rural Development in turn estimated the export volume in the first quarter when compared against the same three months last year to have dipped 5.4% to 449,000 tons with revenue jumping 25.6% to US$1 billion.

    Average prices in the first quarter ticked up 32% on year to US$2,262 a ton, said MARD, adding that Germany and the US were the two largest buyers with market shares of 17% and 16%, respectively.

    Markets witnessing sharp growth over the same period last year were Belgium (230%), the Republic of Korea (79%), the US (60%), Algeria (50%), Spain (34%), Germany (29%), the UK (27%), Japan (21%) and Italy (20%).

    Compared to the end of February 2017, the price of coffee Robusta in the Central Highlands at the end of March rose by US$.09-US$.10 (US$ VND2,000-VND2,200) to US$2.03- US$2.07 (VND46,000-VND46,900) per kilogram.

    Coffee prices in Dak Lak, the largest coffee bean-growing province in the country, stood at US$2.08-US$2.11 (VND47,300-VND48,000) per kilogram as stockpiles remain low.

    According to Nam, coffee prices look to continue to increase in the near term as farmers are holding back waiting to see if prices will rise even further.

    Despite the higher coffee prices, the profits per hectare remain lower than other alternative crops such as fruit trees and pepper— resulting in many farmers getting out of the coffee business entirely.

    Solutions to boost coffee exports

    The small production scale and lack of sophisticated skills of farmers have stopped them from becoming major players in the global market, said Nam, noting the lack of access to credit has prevented them from replanting with the latest varieties and newest technology.

    Meanwhile, farmers collectively have processed 10% of the total coffee output for the year but instant, roasted and ground coffee products, have not achieved a high volume, strong brand or the quality reputation to compete with top global brands.

    Huynh Quoc Thich, deputy director of Dak Lak Agriculture and Rural Development Department, notes that most actors in the coffee segment in the province have not paid sufficient attention to quality.

    He added that the existing sales prices have not incentivized coffee growers to produce high quality coffee.

    Meanwhile, he looks for exports to drop 25-30% this year. That won’t turn around until actors in the segment comprehensively collaborate to promote brand recognition, food safety and boost added value, he concluded.

  • Jollibee Foods JV to open door to Europe

    Jollibee Foods JV to open door to Europe

    Philippine foodservice giant Jollibee Foods (JFC) has entered into a JV agreement with Singapore-based Blackbird Holdings to take the Jollibee brand to the European market.

    JFC’s wholly owned subsidiary Golden Plate has signed the deal with Blackbird to own and run the first Jollibee store in Italy. Golden Plate and Blackbird will incorporate a Singapore company, a 75:25 JV, with Golden Plate holding the controlling stake. The two companies are looking at investing more than US$1 million in the JV.

    Established in 2014, Blackbird has investments both in Singapore and the Philippines in the F&B and other sectors.
    Jollibee says Golden Plate will have full management control of the JV and the first store. Jollibee’s strategy is still to find a territorial franchisee for Italy with the capability to develop and expand the brand there.

    Jollibee has the largest foodservice network in the Philippines and has more than 3290 stores worldwide including such brands as Burger King, Chowking and Red Ribbon. In China it has Dunkin Donuts, Hong Zhuang Yuan, Jollibee and Yonghe King.

    JFC has Jollibee stores in Vietnam (86), Brunei (14), Singapore (4), Hong Kong (3).

  • China’s healthy snack trend creates opportunities

    China’s healthy snack trend creates opportunities

    China’s healthy snack trend is creating massive opportunities for FMCG companies and retailers according to a new report from research house Mintel.

    While snacking is often thought of as an indulgent and convenient alternative to traditional meal times, many Chinese consumers are now focusing on their health. Mintel’s report reveals that four in 10 urban Chinese consumers eat more nuts and seeds today compared to six months ago. Pointing to the rise in popularity of these healthy snacks, 58 per cent of consumers say that nuts and seeds taste good and 44 per cent say they are convenient to eat, while only 9 per cent say nuts and seeds are unhealthy.

    It seems that nuts are high in demand in China as product launch activity is also on the rise. Mintel Global New Products Database (GNPD) reveals that 17.5 per cent of snack products launched in China between 2014 and 2016 were nuts, compared to 15.3 per cent of those launched globally.

    The healthy snacking trend is contributing to the growing popularity of nuts and seeds in retail channels as well. In China’s retail snack market, nuts and seeds is the largest category, with a retail value of RMB263.7 billion (US$38.3 billion). Mintel forecasts the segment will grow at a CAGR of 10.7 per cent in value between 2015 and 2020, reaching RMB345.6 billion.

    Ching Yang, senior food and drink analyst at Mintel, said Chinese consumers have become more aware of the health benefits of nuts and seeds.

    “Now, it seems that  eating nuts and seeds is no longer something to do to kill time while chatting with friends, but part of the overall pursuit of a healthy and trendy lifestyle. Therefore, companies should consider packing up the traditional nuts and seeds bulk products in favour of branded products that are positioned as a healthy snack. We’re seeing a number of the nuts brands thriving when leveraging this consumer trend.”

    Mintel research reveals that six in 10 consumers associate a healthy snack with ‘all-natural’, while 42 per cent associate it with ‘fortified with additional nutrients’. One third of Chinese consumers associate healthy snacks with ‘high in protein’, and the demographic skews towards male consumers aged 25-29 (42 per cent). What’s more, 41 per cent of Chinese consumers aged 40-49 associate healthy snacks with ‘low in salt’.

    According to Mintel GNPD, one quarter of snack products launched in China between 2014 and 2016 were meat- or seafood-based snacks. In line with this, Mintel research reveals that 48 per cent of consumers think meat/seafood-based snacks taste good and 46 per cent think they are filling.

    On the other hand, the growth rates of traditional sweet snacks, such as sugar confectionery, ice cream and biscuits, are relatively slow. Mintel research indicates that 26 per cent of urban Chinese consumers are eating less chocolate confectionery today compared to six months ago, while 23 per cent are eating more. However, 63 per cent of Chinese consumers are eating more fresh fruits and vegetables as snacks, and 42 per cent are eating more dairy-based snacks.

    Yang added: “Chinese consumers have rising awareness of their sugar and fat intake. Therefore, more consumers are switching to fresh fruits and vegetables or dairy-based foods for snacking. This suggests a growing opportunity for food and drinks brands that enjoy a healthy perception (e.g. dietary supplements, cereals and yogurt) to tap into the snacking occasion by developing snack format products. Our research shows that Chinese females are concerned with calories, while Chinese males care about protein. With this in mind – and the fact that  the average sodium level in China’s meat snacks is lower than the global average and the level is decreasing over time – the ‘reduced sodium’ claim is still rarely seen on meat snacks and, therefore, could be leveraged to meet consumer needs.”

    Imports gain favour

    Finally, imported snacks are gaining popularity among urban Chinese consumers. According to Mintel research, as many as four in 10 urban Chinese consumers are interested in buying imported products they’ve never tried before across a variety of purchase channels that specialise in selling imported snacks. Of these same urban consumers, while 34 per cent have bought snacks from imported food stores, 28 per cent have bought at local stores when travelling and 19 per cent have bought from foreign shopping websites. In addition, though 75 per cent of consumers have bought snacks from any e-commerce site, physical retail channels are still the most popular purchase destination (96 per cent).

    “As consumers continue to look for new and different flavour experiences, international snacks have become a sector that many consumers are gravitating towards,” said Yang. “E-commerce is an especially important channel for international snacks. It not only allows consumers to easily access foreign products, but also provides a less costly channel for international players to enter the Chinese market.

    “However, one of the challenges for consumers is deciding what products are good and worth the higher cost, especially for consumers living in tier-one cities as they are more likely to shop online. A product targeting mainstream consumers could use regular retail channels in order to reach more consumers, especially in the lower tier cities,” Yang concluded.

  • Hooters Southeast Asia opens two more outlets

    Hooters Southeast Asia opens two more outlets

    Hooters has opened two outlets in Southeast Asia, Hooters of Singapore – Fusionopolis and Hooters of Jakarta.

    Both locations are run by international franchisee Destination Group of Singapore, a Hooters 2015 Developer of the Year.

    Hooters of Singapore – Fusionopolis is in the One-North Business Park in Buona Vista. The 240 sqm restaurant accommodates 103 guests and has more than 20 large-screen televisions. Fusionopolis is an integrated work-life-play-learn development comprising retail outlets, a fitness club, R&D businesses and apartments.

    Hooters restaurant

    Hooters of Jakarta is in the Kemang Square shopping area, known for its upscale shopping centres, residences and nightlife. The 228 sqm Hooters restaurant seats 105 guests and has more than 16 large-screen televisions.

    “We are continuing our steady progression of opening locations across Southeast Asia,” says Destination Group CEO Gary Murray. The company has a 35-location Southeast Asia development agreement with Hooters of America, with plans to open more outlets soon in Phnom Penh, Koh Samui in Thailand, Taipei and Manila (multiple locations).

    While guests in SouthEast Asia are offered the Hooters standards of burgers, wings, appetisers and salads, they can expect menu additions that suit local tastebuds such as sauces, Indonesian sambal and Singaporean chili crab.

    Hooters of America chief development officer Mark Whittle says more sites are being sought for the group’s restaurants in Bali, Bangkok, Cebu, Davao, Ho Chi Minh City, Hong Kong, Jakarta, Kowloon, Krabi, Kuala Lumpur, Macau, Manila, Siem Reap, Singapore, Taipei and Yangon.

  • Malaysia puts high hopes on one halal certification with Indonesia

    Malaysia puts high hopes on one halal certification with Indonesia

    Malaysia is putting high hopes on the planned unified halal certification with Indonesia, the country with the world’s largest Muslim population, in a bid to strengthen halal trade relations between the two countries.

    At present, Indonesia only directly accepts Malaysian halal certificates for industrial goods, such as palm oil.

    However, Malaysian end-user products must undergo various tests to obtain another halal certificate from the Indonesian Ulema Council (MUI) and halal logo from the Food and Drug Monitoring Agency (BPOM) before being marketed in Indonesia.

    To address the issue, Malaysian and Indonesian authorities are reviewing their halal certifications to avoid inefficient imports and exports in the long run.

    “We have been collaborating very closely because we want to sell more products to Indonesia and, of course, we also welcome Indonesian products in Malaysia,” Malaysian International Trade and Industry Minister Mustapa Mohamed told reporters on the sidelines of the 2017 Malaysia International Halal Showcase (Mihas) in Kuala Lumpur on Wednesday.

    “Some challenges have not been resolved. Indonesian authorities recognize our halal certification, but there are some additional tests that our people have to go through.”

    The MUI’s Food and Drug Analysis Agency (LPPOM) deputy director, Muti Arintawati , said her side had planned to simplify halal certification for Malaysian end-user products imported into Indonesia.

    “We may not need to conduct an audit at the production location. Instead, we can just audit the documents of those products. Nonetheless, this plan has yet to be officially agreed to,” Muti told The Jakarta Post over the phone on Friday.

    In August last year, Malaysian Prime Minister Najib Razak said he was committed to boosting trade between the two neighboring countries to US$30 billion in the near future.

    Total trade between Malaysia and Indonesia has seen a declining trend to $14.31 billion in 2016 from $24 billion in 2013 amid the global economic crisis, as shown by data from Indonesia’s Trade Ministry.

    “Indonesia is huge, of course. It’s a very big market. […] The issue here is that there are some technical issues in regard to the acceptance of halal,” Abu Bakar Koyakutty, senior director of the market access and international partnership division at the Malaysia External Trade Development Corporation (Matrade), told The Jakarta Post on Tuesday.

    “There are different standards on halal. If we can resolve the issue, we see there’s a huge potential.”

    According to a 2016 study published by Salaam Gateway, a business intelligence platform that is a joint effort between the Dubai Islamic Economy Development Center and intelligence and research agency Thomson Reuters, one of problems facing halal regulatory standards globally is that there is no unified standard.

    For instance, it states there is a significant variance between the standards of the Department of Standards Malaysia (DSM) applied in Malaysia and the standards of the Emirates Authority for Standardization and Metrology (ESMA) applied in the United Arab Emirates.

    “The cost of gaining multiple certifications to satisfy the needs of different markets adds complexity and could prohibit entry, resulting in unmet demand for halal food among Muslim consumers,” said the report.

    The report also notes the slow and limited uptake of halal accreditation programs, the process in which a third neutral party validates the certification.

    Compounding that problem, halal accreditation bodies have yet to sign specific mutual recognition agreements for halal certification and there is no forum or framework to ensure peer review.

    Halal accreditors operate independently of each other at present and, often times, there is limited clarity on the jurisdiction of the accreditors.

    Meanwhile, the State of Global Islamic Economy Report 2016/2017 — by Thomson Reuters and research and advisory firm DinarStandard puts the size of Islamic economy at an estimated $3 trillion by 2021, rising from $1.9 trillion in 2015.

    In 2015, Muslims’ spending on food and beverages stood at $1.1 trillion and there was $415 billion estimated revenues from halal-certified food and beverage products.

  • Indonesia turns it back on Vietnamese rice as crops at home flourish

    Indonesia turns it back on Vietnamese rice as crops at home flourish

    Indonesia’s rice imports from all destinations in 2017 are forecast to halve to 500,000 tons, based on USDA reports. Indonesia, the world’s fourth most populous country and a major buyer of Vietnamese rice, has not returned to Vietnam for new purchases this year, while its overall 2017 rice imports are forecast to halve to around 500,000 tons thanks to better domestic production, according to industry reports.

    Indonesia was among Vietnam’s 10 biggest rice buyers in the 2010-2016 period, with imports peaking at nearly 1.9 million tons in 2011, based on data from Vietnam’s agriculture ministry.

    But its purchases have been falling and Vietnam received no orders during the first two months of 2017, ministry data shows. Vietnam is the world’s third-biggest rice exporter after India and Thailand.

    Indonesia is forecast to import 500,000 tons of rice this year, down 50 percent from 2016, as domestic milled rice output edges up 2.6 percent to 37.15 million tons “due to increased area harvested”, a U.S. Department of Agriculture attache said in a March 30 report.

    The report said increased cropping intensity and new land will help expand the harvested area this year to 12.24 million hectares (30.25 million acres), 1.2 percent above 2016 when Indonesia experienced a weak to moderate La Nina weather phenomenon.

    Given more use of high-yielding varieties, the report forecasts Indonesia’s output next year will rise further to 37.4 million tons, leaving the country’s rice imports unchanged.

    The forecasts pose a challenge to Vietnam’s rice exports in 2017, with shipments in the first quarter already dropping 24 percent from a year ago to 1.2 million tons, a two-year low, the government has said.

    Hanoi maintains forecasts of a modest rice export volume for 2017, anticipating 5 million tons to be shipped, due in part to expected higher demand from top buyer China. Last year, Vietnam’s rice exports fell to 4.8 million tons, the lowest since 2008.

    Malaysia, another key buyer of Vietnamese rice, is forecast to import 950,000 tons of the grain this year, unchanged from 2016, said a USDA report dated March 27. Last year, the country was Vietnam’s 5th biggest rice buyer, after China, Ghana, the Philippines and Indonesia.

    The average export price of Vietnam’s 5-percent broken rice eased 2 percent in the first quarter ending March from a year ago to $344 a ton, free-on-board basis, and that on Thailand’s 5-percent broken rice also eased the same pace in the same period to $372 a ton, the U.N. Food and Agriculture Organization said.

    Unseasonal rain in the past week has disrupted the harvest of the Mekong Delta’s winter-spring crop, and quotations edged up slightly even though buying demand remains thin, traders said. The 5 percent broken rice advanced to $355 a ton this week from $347-$350 last Thursday.

    Output of the crop, the biggest among the Delta’s three crops grown a year, is projected to drop 1.3 percent from last year to around 10 million tons of paddy, the agriculture ministry has said.

  • Vietnam’s top brewer Sabeco tops up profit goal for 2017

    Vietnam’s top brewer Sabeco tops up profit goal for 2017

    The company expects its annual sales to rise 3 percent against last year. Vietnam’s biggest brewer Sabeco is aiming to push sales to more than 1.7 billion liters this year, an increase of 3 percent against 2016, in a bid to raise its annual revenue by 9 percent to VND34.5 trillion ($1.52 billion) and net profit by 1 percent to VND4.7 trillion ($207 million).

    The state-owned company also plans to raise its dividend payments from 30 percent to 35 percent, as agreed by its board of director.

    Those targets will be put on the table at a shareholder meeting on April 18.

    Company bosses said that price cuts on ingredients, a preferential tax policy on malt and stable market growth in rural areas, where Sabeco is the most competitive, are the reasons for the more positive targets.

    Sabeco, known for the Bia Saigon and 333 brands, is also preparing for fiercer competition on the domestic market following Belgium’s Anheuser-Busch InBev entry into the Vietnamese market.

    With the special consumption tax on beer and wine raised from 55 percent to 60 percent on January 1 this year, and set to climb to 65 percent in 2018, as well as a labeling regulation that’s still under discussion, Sabeco is concerned that the at production cost for each beer bottle will be rise by VND200.

    In its financial statement released last month, the brewer reported VND30.66 trillion in revenue last year, up 13 percent from 2015, and a profit of VND4.6 trillion ($205 million), a 33 percent jump.

    According to the Ho Chi Minh City Securities Corporation, Sabeco’s beer sales made up 43.3 percent of the domestic market share last year, a slight decrease compared to 43.9 percent of 2015. It predicted that the figure will edge up to 43.5 percent this year.

    The trade ministry announced in August last year that it planned to sell its entire stake in Sabeco, according to a government report.

    Under the plan, the ministry would have offered a 53.59 percent stake worth VND24.5 trillion ($1 billion) in 2016 before Sabeco made its market debut, and the remaining 36 percent stake worth VND16 trillion ($705 million) in 2017 after the listing.

    However, due to delays, the trade ministry failed to sell its first Sabeco shares as planned.

    Deputy Trade Minister Do Thang Hai told local media on Monday that over 641 million shares in Sabeco had been listed on HOSE on December 6 last year at a starting price of VND110,000 ($4.85) per share. As of April 3, prices stood at VND200,400 ($8.8) per share.

    Beer consumption in Vietnam rose 12 percent year-on-year to reach 3.8 billion liters in 2016, according to the trade ministry.

    Vietnam is Asia’s third largest beer consumer by volume after China and Japan.

    Industry experts expect annual growth of 4 to 5 percent over the next five years. The country’s annual beer output is forecast to hit 4.1 billion liters by 2020, according to government projections.a

  • Convenience, food safety matters to Vietnamese consumers

    Convenience, food safety matters to Vietnamese consumers

    The retail market in Vietnam is quickly shifting away from traditional live markets to more modernized trade, said Nick Miles, head of Asia-Pacific at IGD, with convenience stores showing the strongest growth prospects.

    There are several factors driving this including a positive economic outlook for the country, a significant increase in gross domestic product per capita and rapidly changing shopper habits.

    The segment has also experienced a shift in shopping behaviours as younger consumers with higher disposable incomes typically make smaller, but more frequent purchases rather than splashing out on a big weekly shop.

    Of note, Mr Miles said young consumers prefer to shop in an air-conditioned environment that has products well-organized on the store shelves and provides seating areas.

    With higher take home pay they are also looking for and willing to pay for higher-quality products than can be found in most traditional live markets.

    While free trade agreements such as the ASEAN Economic Community have given rise to a race for larger supermarkets throughout the country, many stores and individuals have opted to open smaller mini-supermarkets and convenience stores.

    It is also easier to get licences for stores under 500 square metres, said Mr Miles noting that this explains why retailers have been able to expand so speedily in the large metropolitan areas such as Hanoi.

    The study said it expects to see convenience stores in Vietnam to champion innovative new products and formats such as food to go, and begin working collaboratively to develop coordinated supply chains to ensure they are making the most of their growth prospects.

    Vietnam is undergoing an organized retail revolution, explained Luong Quang Thi, general director of domestic refrigerated transport specialist ABA Cooltrans.

    Convenience stores and mini-marts are popping up everywhere, Mr Thi noted, adding that as of last June there were 1,500 mini marts across the country mostly in the larger urban areas.

    Those numbers are expected to continue to mushroom over the next few years, which in turn is fuelling a heightened demand for chilled and frozen foods, setting the stage for the cold chain industry to soar.

    ABA Cooltrans hopes to put itself at the forefront of the Vietnam cold chain expansion, he added.

    The company’s 200 reefer trucks handled 54,000 metric tons in 2016, and a newly acquired 15,000 pallet-capacity cold storage facility in Hanoi saw throughput of 100,000 metric tons.

    Convenience and food safety matters to a typical young Vietnamese consumer nowadays, said Mr Thi, adding that freezing some foods for short or long term use, is essential to prevent foodborne illness.

  • Vietnamese Prime Minister orders rice revolution to raise quality of production

    Vietnamese Prime Minister orders rice revolution to raise quality of production

    Falling rice exports have prompted the government to rethink its strategy. Renovation at all levels of the government is needed to “create a revolution in quality and a new vision, accompanied by strategic planning in line with globalization, in order for Vietnamese rice to meet consumer demand in Asia and the rest of the world,” Prime Minister Nguyen Xuan Phuc was quoted on Wednesday as saying.

    Vietnam, the world’s third-largest rice exporter after India and Thailand, will launch a comprehensive campaign to overhaul production in order to raise yields, efficiency and export value, according to the government.

    The Southeast Asian nation went through its first rice revolution in the late 1980s. At that time, the country still had to import rice to meet domestic demand, but 1989 marked the first year of Vietnamese rice shipments, with a total of 1.4 million tons shipped overseas thanks to rapid reforms in agricultural production.

    Rice exports peaked at 8 million tons in 2012, but have since dropped due to better production in key markets such as the Philippines, Indonesia and Malaysia, as well as rising competition from India, Pakistan, China, Thailand, Myanmar and Cambodia.

    The Vietnam Food Association has targeted annual shipments of around 5 million tons this year, after sales fell to 4.8 million tons in 2016, the lowest since 2008.

    Despite continued investment, falling rice exports have prompted the government to rethink its strategy.

    Hanoi has classed rice as a strategic commodity to ensure food security for the country’s 93 million people, especially with typhoons, salination and floods posing a major threat.

    Phuc’s instruction came days after the government estimated Vietnam’s rice exports from January-March dropped 24 percent from a year ago to 1.2 million tons, a two-year low.

    Phuc has asked for rice fields to be merged or expanded in suitable areas, while the land damaged by salination should be switched to raising shrimp and other crops.

    He also called for updated agricultural technology to produce varieties with higher yields, while improving storage conditions and avoiding post-harvest losses.

    Modern irrigation systems and infrastructure projects to cope with climate change and rising sea levels are needed, Phuc said.

    Last month, the premier asked government officials to look into human and natural factors as Vietnam seeks to fight the problems threatening to sink the country’s Mekong Delta food basket, which supplies 90 percent of rice for export.

    The future of the delta, home to around 20 million people, is threatened by urbanization and dozens of dams, with more in the pipeline. Flooding and droughts that have led to salination, along with rising sea levels, should also be considered for the region’s development, a World Bank report said.

    The alluvial soil and sediment delivered to the coastal areas in the delta, where the Mekong River enters the East Sea (internationally known as the South China Sea), fell to 75 million tons in 2014 from 160 million tons in 1994, according to data from Vietnam’s National Mekong Committee.

    The WWF said that higher sea levels may inundate half of the delta by the end of the century.

  • Problems with City pork plan

    Problems with City pork plan

    HCM City’s technology-based programme to control and trace the origin of pork that began recently is encountering difficulties, according to the Department of Industry and Trade.

    Speaking at a regular department press briefing, Nguyễn Phương Đông, its deputy director, said 713 pig farms have registered to participate in the programme, but only 99 put rings with an electronic stamp on their pigs’ legs to aid in individual identification of the animals.

    Even the number that agreed to join the programme had not met the expectations of its managers, he said.

    The reason for this is that the main source of supply for the city is farms and household breeders in neighbouring provinces, who need time to change their farming and trading habits.

    But to ensure the safety of consumers, the department is working with those provinces to organise training programmes for the farmers, he said.

    The city provides small-scale breeders with a 50 per cent subsidy of the cost of the electronic rings for the first month, he said.

    Almost all wholesalers at the city’s Bình Điền and Hóc Môn wholesale markets are taking part in the programme.

    They meet 70-80 per cent of the city’s pork demand.

    Consumers can currently check the origin of pork they buy at nearly 385 modern outlets (supermarkets, convenience stores and food shops) and 140 booths at 23 retail markets.

    The project management board is now working with poultry producers and distributors in the city and neighbouring localities to implement a similar programme in June.

  • McDonald’s Indonesia to launch mobile app in Q4

    McDonald’s Indonesia to launch mobile app in Q4

    McDonald’s Indonesia celebrates its 25th anniversary this year. The franchise of US-based fast food giant McDonald’s will launch a mobile application to serve customers amid growing technology development.

    Fast food giant McDonald’s Indonesia will launch a mobile application for food orders in the fourth quarter of this year to tap the growing smartphone market and keep up with the shifting customer behavior, a senior company employee said on Thursday.

    Customers can currently order food for delivery through the McDonald’s website, said Michael Hartono, McDonald’s Indonesia’s marketing and communication director.

    The food chain said that a mobile application would give customers easier access to order food order amid growing technology use and development in Indonesia.

    “We are currently developing the application and hope to launch it by the fourth quarter of 2016,” Michael said during an event in Jakarta on Thursday.

    Once it is launched, customers can download the app and click on the menu when they want to place an order, he added.

    McDonalds recorded a stable performance in 2015 amid the global economic slowdown affecting commodity prices and people’s purchasing power, Michael said without giving further details.

    McDonald’s plans to open 15 stand-alone outlets across the country, adding to its 168 outlets in Indonesia.

    The fast food giant aims to record 15 percent sales growth this year, Michael said.

    McDonald’s Indonesia operates under PT Rekso Nasional Food, which holds the franchise license in Indonesia for McDonald’s.

    Free Egg McMuffin

    McDonald’s will give away 1,000 Egg McMuffins at stand-alone stores across Indonesia on March 7 from 6:30 a.m. to 10 a.m. as part of a promotional campaign. They can be obtained at outlet counters or drive-thrus, Michael said on Thursday. A 50 percent discount will also be given on coffee and hash browns during breakfast.

    During what the company calls National Breakfast Day, held since 2013 on the first Monday of March, free souvenirs, such as T-shirts, will be given to selected customers.

    As this year’s event coincides with McDonald’s 25th anniversary, the company will also give free Egg McMuffins to public institutions, such as schools, police posts, firefighters and hospitals.

    Customers at the event could receive discount vouchers for the following day’s meal, Michael added.