Vietnam's Chocolate And Cocoa Confectionery Industry And Competitive Landscape 2023
Updated: January 02, 2024Industry Landscape
Demand Conditions
In 2022, Vietnam's imports of chocolate and confectionery containing cocoa (HS code 1806) amounted to USD 62 million (up 44% YoY), more than double the country's exports which amounted to USD 24 million (up 19.8% YoY). In volume terms, imports amounted to 10.6 million kilograms in 2022, more than double exports which amounted 4.4 million kilograms.
According to the Vietnam Cocoa Coordination Board at the Ministry of Agriculture and Rural Development (MARD), Vietnam's domestic cocoa demand amounts to around 5,500 tons translating into a per capita chocolate consumption of around 0.5 kilograms per person, equal to ASEAN neighbors like Malaysia (0.5 kilograms), but considerably lower than countries like the UK (over 10 kilograms) reflecting room for growth as incomes rise. At USD 13,461 in 2022 on a PPP basis, Vietnam's per capita incomes lag neighbors like Malaysia (USD 33,523) and Indonesia (USD 14,657), however growth is higher albeit from a considerably lower base; Vietnam's per capita GDP has grown at a CAGR of 8.2% over the five year period between 2017-2022, compared with for 5.2% Malaysia and 6% for Indonesia.
Growing awareness of Vietnamese cocoa on the back of a slew of positive publicity (for instance in 2016, Vietnamese cocoa won fine flavor cocoa designation from the International Cocoa Organization and homegrown bean-to-bar chocolate brand Marou was named as New York Times' best chocolate bar) could drive export demand for Vietnamese chocolate products.
Supply Factors
In 2022, Vietnam's cocoa supply chain is largely centered on lower-value cocoa products with the country's exports of cocoa beans (HS code 1801) and cocoa paste (HS code 1803) exceeding imports in both value and volume terms, while the opposite is true for higher-value cocoa products such as cocoa powder (HS code 1805), and cocoa butter (HS code 1804), imports of which far outstrip exports.
According to latest available data from FAOSTAT, Vietnam's cocoa planted area is estimated at around 3,185 hectares in 2022, down from 4,200 hectares in 2021.
Government support for the cocoa processing industry is encouraging. Strategic partnership agreements on agriculture in 2020 between the governments of Vietnam and Belgium contributed to opening a significant export market for Vietnamese cocoa paste, largely driven by exports to Belgium.
Trends And Opportunities
Diabetes is on the rise in Vietnam (diabetes incidence increased by 43% during the three years between 2019 and 2022 according to Vietnam's health ministry) prompting the government to propose a sugar tax on sweetened beverages this year. Diabetes and health concerns may drive demand for sugar-free chocolates.
Key festive seasons for chocolate sales and promotions include Christmas, and Vietnamese Women's Day (which falls on October). Brand owners typically launch dedicated collections in themed packaging to drive sales during these seasons.
Challenges
Cocoa cultivation has been declining in the country over the past few years and government support has been relatively slow according to cocoa farmers. Current cocoa hectarage of 4,200 hectares in the country (as of 2021) is less than a quarter compared to 2012 when Vietnam's cocoa planted area peaked at around 25,000 hectares. Falling cocoa hectarage may impact raw materials supply, particularly for the country's burgeoning single-origin chocolate industry.
Competitive Landscape
Marou Chocolate
Homegrown chocolate brand Marou Chocolate manufactures and sells chocolate bars, boxed chocolates. The brand's positioning radiates a distinctively Vietnamese flavor and they are arguably most famous for their single-origin chocolate bars produced using cacao sourced from Vietnamese cacao farms. Channels include their physical stores/chocolate cafes which serves cakes, pastries as well as seasonal goodies such as mooncakes.
Recent developments:
New (non-seasonal) products launched during the year inlude four new chocolate bar flavors (White Chocolate 44% & Vietnamese Vanilla Single Origin, Caramel Pumpkin Seed 65% Dark, traditional Vietnamese milk coffee, Mint & Orange Dong Nai 68%). Seasonal releases include collections for Christmas, and Halloween.
As part of the company's sustainability initiatives, Marou chocolate bars were upgraded to 100% biodegradable and water soluble packaging.
The company launched a Vietnamese milk coffee chocolate beverage in RTD cans .
Marketing initatives include giveaways, and chocolate tasting events.
Marou Chocolate's Caramel Pumpkin Seed 65% Dark chocolate won silver at the International Chocolate Awards 2023.
The company cultivated nearly 100,000 cocoa trees covering a total area of over 200 hectares in collaboration with Vietnamese cacao farmers across seven provinces in Vietnam.
Future plans:
Alluvia Chocolate
Local chocolate company Alluvia Chocolate is a tree-to-bar chocolatier engaged in cacao cultivation (through their own cacao farm located in the Vietnamese province of Tien Giang), production (through their factory), and sale of chocolate products which largely comprises chocolate bars. Channels include their direct-to-consumer online store on their website, official stores on online marketplace platforms (such as Shopee and Lazada), and their physical network of stores across Vietnam (numbering over seven at the end of 2023) which in addition to serving as retail outlets for their chocolate products also offers desserts, beverages, and gelato.
Recent developments:
New product launches include at least six new chocolate bar flavors and terroirs (Dark Chocolate Mint, Dark Chocolate Lime, Dark Chocolate Strawberry launched during Vietnamese Women's Day, Mac Khen, Danang, Mekong). Seasonal releases include collections for Christmas, and Halloween.
Marketing initiatives include workshops, chocolate tasting events, contests and giveaways, and influencer marketing. Limited edition beverage flavors were rolled out for Christmas for cafe patrons.
As part of channel expansion efforts, Alluvia Chocolate opened three new store locations (in Hoi An, Hanoi and Saigon).
Belvie Chocolate
Award-winning local chocolate brand Belvie Chocolate's product offering primarily consists of single origin chocolate bars made using Vietnamese cacao, and boxed chocolates. Much of Belvie's revenues are derived from exports (which account for 60% of sales while domestic sales account for the remaining 40%).
Recent developments:
Seasonal releases include limited edition offerings for Christmas, and Valentine's Day.