Vietnam’s beer industry sees profits rebound, but challenges remain

Profit recovery led by Heineken Vietnam

Saigon Trading Group (Satra) recently released its consolidated financial report for 2024, revealing a strong 37-percent year-on-year increase in post-tax profits at over VND3.1 trillion (US$120.8 million).

The surge was largely driven by a substantial rise in earnings from joint ventures and affiliated companies, which contributed VND3.4 trillion ($132 million), up 24 percent from the previous year.

Although Satra did not specify which partners fueled the earnings jump, its main turnover has come from two joint ventures with Heineken for many years.

Satra holds a 40-percent stake in both Heineken Vietnam Brewery Limited Company and Heineken Vietnam Beer and Beverage Company.

These two entities are responsible for producing and distributing Heineken products across Vietnam.

Their recovery has been pivotal to Satra’s improved performance.

This marked a turnaround as in 2023 Satra’s joint venture income fell nearly 47 percent, dragging its post-tax profits down to VND2,295 billion ($88 million), less than half the VND5,086 billion ($195.2 million) recorded in 2022.

In the first half of 2024, the firm also saw a 28-percent decline in earnings from joint ventures.

Market dominance by 4 giants

According to a recent report cited by Mirae Asset Securities from Euromonitor International, Vietnam’s beer industry is dominated by four major players, namely Heineken, Sabeco, Carlsberg, and Habeco, which collectively control over 90 percent of the market share.

Sabeco posted revenues of VND32.2 trillion ($1.2 billion) and a post-tax profit of VND4.5 trillion ($172.5 million) in 2024, up five percent and six percent year on year, respectively.

Also, Habeco saw an uptick, with revenue increasing five percent to VND8.3 trillion ($318 million) and after-tax profit climbing 10 percent to VND391 billion ($15 million).

The modest revenue growth across major brewers highlighted a gradual recovery in domestic beer consumption.

However, profits did not increase uniformly, with rising operational costs and fierce market competition dampening margins.

Beer consumption in Vietnam remains strong, at around 43 liters per person annually, according to Mirae Asset Securities.

From 2009 to 2023, the compound annual growth rate (CAGR) of consumption stood at 4.7 percent.

Looking ahead, consumption is forecast to grow at a more modest rate of about two percent annually between 2025 and 2030, supported by macroeconomic factors such as economic expansion, a young population, urbanization, and tourism recovery.

However, Vietnamese drinkers are becoming increasingly health-conscious, a trend reinforced by stricter regulations on alcohol consumption, leading to a rising demand for light and non-alcoholic beers.

Products such as Heineken 0.0, Sabeco’s Sagota, and Budweiser Zero may become increasingly sought-after.

Yet, non-alcoholic beers still represent a niche market, accounting for just over three percent of total beer consumption.

Barriers include higher prices, less appealing taste compared to traditional brews, and consumer skepticism over residual alcohol content.

Uncertain outlook amid ongoing challenges

Despite signs of recovery, the Vietnamese beer industry is not out of the woods.

The sector continues to grapple with high input costs, changing consumer tastes, escalating competition, and increasingly strict regulatory oversight on alcoholic beverages.

At the end of the first quarter of 2025, Habeco reported profits, while Sabeco showed signs of stagnation, losing its previous growth momentum.

Meanwhile, several smaller breweries continued to post losses.