According to the market research firm Nielsen, recent statistics show that Vietnam’s condiment and sauce market could grow an average of 25% to 32% annually from now until 2022.
In terms of market share, foreign brands hold the upper hand. International brands such as Knorr of the Netherlands’ Unilever, Maggi of Swiss-based Nestle, Aji-ngon of Japan’s Ajinomoto, and Taiwan (China)’s Miwon, are taking lead positions in their market segments.
Particularly, Knorr takes the lead in the seasoning powder market with an almost 50% market share. While Aji-ngon takes second place, Chinsu of Vietnamese private consumer goods giant Masan Group ranks third, with Maggi coming in fourth.
Industry experts have attributed Maggi losing its second place position to Aji-ngon due to its concentration in the hi-end consumer segment, this market accounts for a mere 17% to 23% of the total consumer count.
Besides, Maggi did not implement expansive marketing strategies, as Knorr and Aji-ngon did.
However, a Nielsen expert told VIR that Knorr’s current lead position might not be sustainable as it carried very high marketing costs. “Knorr’s seasoning powder marketing expenses have grown 15% to 20% annually,” the expert said.
In second place, Aji-ngon is pursuing a scientific approach by focusing on technology and material sources. With the advantage of being a monosodium glutamate maker, Aji-ngon’s spice costs prove more competitive than Knorr’s.
In addition, by applying the meat and bone direct extract technique, Aji-ngon’s material cost is also cheaper than Knorr’s.
While foreign brands are maintaining lead positions in the spice market, Vietnamese firms are making a deeper mark in the sauce market with Masan Consumer, Cholimex Food, Trung Thanh, and Nam Duong being the top players.
The leading player in the condiment market is Masan Consumer, a member of the Masan Group, which has a 43% share of the market. Cholimex Food holds the second position with 37%.
According to Masan Group’s financial statement for 2015, the local chilli and tomato sauce market generates about VND847 billion (US$38.6 million) in annual revenue, growing 11% in output and 20% in value.
Chilli sauce’s popularity is expected to continue growing due to a steadily rising demand in rural areas, and production units.
Apart from veteran players, new players such as Saigon Co.op, Vietnam’s leading retailer and the operator of the Co.op store chain, have recently stepped into the spice business.
Saigon Co.op has teamed up with Singapore-based leading agribusiness group, Wilmar International Limited, to form Nam Duong International Food Company Limited, producing condiments and sauces carrying the Nam Duong brand name.
General director of Viet Nhat Food Industries JSC, Nguyen Huynh Dat, said his company had built workshops and bought technology for the roll-out of its new spice brand of Ong Bep.
“We have managed to find a niche market to draw customers. Our target is to deliver products to not only Vietnamese families, but to the global market,” Dat said.
He added that with small-scale production, a modest output and high production costs, it could challenging for small brands to stay competitive in the marketplace.