With 35% of the market share in 2016, KDF is now the biggest ice cream manufacturer with a large distribution network comprising 70,000 sale points, including 50,000 POS owned by the company itself.
KDF owns two or three leading ice cream brands in Vietnam – Merino and Celano. The total revenue from the sale points was VND2.7 trillion in 2016.
According to Vietnam Market Intelligence (EMI), Merino and Celano are the most popular ice cream brands in Vietnam. While the former targets young people (5-25 years old), Celano targets high-end and older people (25-40 years old).
EMI said the ice cream consumption in Vietnam has been increasing by 15% per annum in value in 2013-2016, which includes output growth rate of 6% per annum.
About 70% of ice cream is sold through retail points for on-the-spot consumption or as take-away ice cream. The other 30% is sold through food service points such as restaurants and cafes.
Besides the four big players in the market – KDF, Unilever, Thuy Ta and Vinamilk – which hold 64% of the market, the remaining 36% of the market share belongs to high-end ice cream shops in urban areas and small shops which sell low-cost products in rural areas.
For urban consumers, Wall’s is a well-known ice cream. It first appeared in the market in 1997 with a US$22 million factory in HCMC, the largest ice cream factory at that time. However, due to poor business performance in Vietnam, it had to leave the country in 2003 after selling the factory to Kido.
In 2008, Wall’s came back to Vietnam, but with imports from Thailand.
Because of the requirement on cold storage, which increases the production cost, Wall’s has been cautious in selecting SKU (stock keeping unit) for the Vietnamese market.
It has only brought about 20 SKUs to Vietnam. This, plus the absence of production units in Vietnam, puts Wall’s at a disadvantage compared with KDF in negotiating with retail points.
With 10% of market share in Vietnam in 2016, Wall’s had turnover of US$115 million.
Vinamilk is a formidable rival for both KDF and Wall’s. In fact, the nation’s leading dairy producer still has not stepped up production of ice cream. The total ice cream market value in 2016 was equal to 6% of Vinamilk’s total revenue.