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Sweetening the festive season
Increased food consumption is the trend when the year draws to a close, and this year is no exception despite the widespread economic hardship. Ask any people what they will buy when Tet comes, and the answer will most surely be cakes and candies, meat and other things to eat. So confectioneries and bakeries have long rolled up their sleeves for the season, as the traditional Lunar New Year is slightly more than one month away.
This year comes with an advantage for local producers still, as a majority of consumers are fretting about Chinese foods following safety scandals, the latest one being the melamine-tainted dairy products. So several local companies say they have decided to boost production to capitalize on the opportunity.
Boosting production
Nguyen Thi Ngoc Lien, corporate affairs manager at Kinh Do Joint Stock Company, says this year the output of cakes at her company will increase by 15% over last Tet, equivalent to 25 million boxes. As the market becomes more diverse, the country’s leading bakery Kinh Do is now focusing more efforts on tapping the high-end market, attracting well-to-do customers with high-quality brands. Kinh Do expects to turn out one million boxes of high-quality cakes, doubling last year’s volume of the category, Lien says
“The branded biscuit category is growing rapidly in Vietnam. We believe there are significant opportunities for Kinh Do to grow our biscuit business as well as build up a significance market share,” she explains.
Bibica, another strong player on the local market, is also pinning high hopes on the local market this year, says Hoang Nham Nam, marketing manager of the Dong Nai-based confectionery.
“Bibica will produce 4,500 tons of all kinds, including five million boxes of high-grade cakes, a 20% increase compared with the same period last year,” says the marketing manager.
A share for each player
In fact, not only giants like Kinh Do or Bibica, but also many other local producers have been increasing outputs of high-grade cakes and candies this year to fill up the vacuum left behind by China-made products, as well as items imported from Malaysia and Thailand that are more expensive. The market for imported cakes has narrowed down because there are not many new products and suppliers, while local makers have made long strides forwards in this aspect.
Duong Thi Quynh Trang, marketing and communication manager at Big C Supermarket, says that 90% of cakes sold in Big C are supplied by local manufacturers with various new kinds.
“Big C doesn’t buy cakes and candies originating from China. Cake importers must show certificates of origin and melamine-free papers,” Trang says to the Daily.
Some established bakeries such as Duc Phat, Hy Lam Mon and Pham Nguyen with many branches around HCMC have enjoyed a loyal clientele since their opening. Apart from developing its bakery chain in the city, Pham Nguyen has an expansion plan to set up a stronger presence in other provinces to provide local consumers with products at reasonable prices.
Meanwhile, many other producers such as Hai Ha, Hanco and Vinabico are concentrating on the mid-price segment, targeting rural areas. Most of them hope better sales in this untapped potential market because Tet offers the busiest season and the most profitable time of the year for them.
“We are expanding our retail distribution system to the countryside to approach rural customers, or organize some trucks carrying cakes to every household. Cake sales are estimated to increase 50% on the occasion,” says one representative of Hai Ha Company.
Vietnamese people do not buy cakes and other confectioneries during Tet for their own consumption, but in their tradition, Tet is a time for them to think of relatives and friends, and a box of cakes may suit the mood. Many send boxes of cakes to business partners, clients, and even teachers of their children, following an unspoken etiquette. Many Vietnamese companies consider send out Tet gifts to counterparts and employees as one of the corporate policy.
New products
Producers say high-grade cakes made from premium materials are making a fast emergence on the market, and they are seeking to cash in on the chance.
Kinh Do this year introduces three kinds of cakes for Tet namely Korento, Share and Kinh Do Gift, including crackers, cookies and biscuits. Their fillings often smell of fruits such as mandarin-orange and grapefruit peels.
Orion Food Vina Co., which has prepared about 300,000 cake packages to serve customers for the upcoming Tet, has also launched new products besides its better-known Chocopie cake. The new products include sponge cake filled with fruits, snack, and fried potato.
Bibica this year introduces 20 new kinds of product including Goodies, Nutri Bis Light and Hura Light which are cholesterol-free and taste less sweet, as a way to attract increasingly health-minded consumers.
Efforts are being taken by the Government and the business circle alike to rev up consumption at a time when the global economic downturn is hitting the local economy hard. Tet as the biggest festive season of the year is therefore seen by enterprises, especially bakeries, as the great chance to cash in on. They are seeking to sweeten the festive season as a way to ride out the tough times.
SGT
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