New-style drinks to dominate beverage market

Archcafe’s success story of penetrating convenience stores shows that innovation in the beverage market can bring great success.

The prospects for the non-alcoholic beverage market in Vietnam, according to BMI, a market survey firm, is very bright in 2016 with expected growth rate of 8.2%. Manufacturers not only can earn money from classic beverages, but also new-style products.

LiF, a brand of Love’in Farm belonging to IDP, last December marketed LiF canned corn milk, the first product of its kind in the domestic market. 

Prior to that, Vinamilk launched into the market a series of new canned products, namely Vfresh Juki multivitamin juice, grapefruit juice, linh chi tea and bottled salted lemons.

An analyst commented that there were many ‘derivatives’ in the beverage market which were developed on the basis of two classic products – coffee and liquid milk.

“You’ll succeed if you can lead consumers’ taste and your products are good enough to create a revolution in the drinks market,” he commented.

Not only the big companies but also small players have joined the race of creating new-generation drinks with an aim to offer more choices to customers.

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Archcafe, for example, has introduced durian coffee and coconut coffee. Sources said that it took Archcafe US$35,000 to find the optimal recipe to make the new coffee products.

A BMI report showed that the coffee market witnessed the growth rate of 8.5% in 2015.

Tran Bao Minh, CEO of IDP, noted that new-style products must satisfy two requirements at the same time. They must be nutritious drinks made of natural materials and must be original.

Onelife, for example, has gained initial success in the home market because it is positioned as the product designed specifically for picky people. Onelife products have been consumed mostly in large urban areas and exported to Australia and the US.

Archcafe’s story

Archcafe has two major product lines – Robusta pure coffee beans which target high-end customers and instant coffee which targets office workers.

The ‘rookie’ made a strategic move when it decided to focus on research & development and marketing, while it did not get involved in the closed production chain.

A report by Euromonitor showed that niche drink market segments still promise the potential high growth rate of 7% until 2017, though Vinamilk, a big player, now holds 70% of the fruit juice market. 

Archcafe decided to develop special products – durian coffee and coconut coffee – which allows it to avoid direct confrontation with the big rival Vinamilk and minimize the investment cost.

In 2015, Archcafe sold more than 1 ton of instant coffee to medium-size cafes in HCM City. It has been available at 300 convenience stores throughout the country. 


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