Beverages greatest contributor to FMCG growth

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

FMCG growth nationwide in the first quarter reach a three-year high of 9.6% versus 5.3% last year, mainly driven by an impressive 8.5% 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%, 12.4%, 12.2%, and 10.3%, respectively. Beverages grew 9.1% and Cigarettes 5.6%.

“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%, contributing 51% to total FMCG sales nationwide, while urban only rose 6.5%. 

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% 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.