Foreign investors march toward Vietnamese ice-cream market

Foreign investors march toward Vietnamese ice-cream market

The domestic ice cream market is still controlled by Vietnamese brands, but the makeup of the market is expected to change in the near future.

Orana Vietnam, which has 13 years of experience in the field, has finished the construction of a $2 million factory which makes ice cream, jam and fruit juice products under the Osterberg brand.

The Danish-invested project has heated up the domestic ice cream market. If it succeeds with the first shop, it would develop a distribution chain and consider franchise contracts with Vietnamese investors later.

With the new factory, the company’s total output is expected to increase twofold to 6,000 tons per annum, including 60-70 tons of ice cream.

Orana Denmark, the holding company, opened an ice cream shop in Copenhagen in 2013. Orana Vietnam is a joint venture between Orana Demark and Vietnamese Phu Cong Minh Company.

The first Osterberg ice cream shop is scheduled to open in District 1 in HCM City.

Orana is more “slow paced” than other foreign ice cream brands such as Baskin-Robbins, Snowee, Swensens, Hagen-Dazs, New Zealand, Monte rosa, Fanny, and Dairy Queen (DQ), which entered the Vietnamese market many years ago.

In 2007, BUDS Ice Cream of San Francisco officially turned up in Vietnam after Vietnamese Bac My JSC signed a franchise agreement with the brand owner.

BUDS is “the early bird”, and therefore, it can “catch worms”. Eight branches and six shops operating under the franchise mode and seven kiosks have been set up so far.

Baskin Robbins has opened 23 shops in HCM City, Can Tho, Ba Ria – Vung Tau, Hanoi and Khanh Hoa after entering Vietnam three years ago.

Nguyen Thanh Nam, general director of Blue Star Food, the company that develops the brand in Vietnam, said he believes opening 50 shops is within his reach.

The other foreign brands from New Zealand and South Korea also attract Vietnamese consumers, especially youth, though the imported products are expensive.

Threat to domestic brands?

Vietnamese brands have been warned that the positions may change any time as foreign investors have been flocking to Vietnam.

However, Nguyen Huu Chung of Phu Cong Minh said it was groundless to say Vietnamese brands are inferior to foreign ones.

Domestic ice cream manufacturers have cemented their firm position in the market.

A report of VPB Securities Company showed that the domestic ice cream market was still dominated by Vietnamese brands, despite the increased presence of foreign brands.

Kinh Do is still leading the market with Celano and Merino brands which account for 29 percent of market share. Vinamilk, a dairy producer, and Thuy Ta stand firmly in the second and third positions.

vietnamnet