Why craft beer brewers choose Vietnam to set up in SEA


Vietnam is well positioned to become a haven for Southeast Asian craft beer lovers. The country already has a deep relationship with beer and in recent years has attracted a slew of foreign craft beer brewers from across the region. Here’s why.

If you think craft beer is primarily for western markets. Think again.

In Districts 1, 2 and 3 of Ho Chi Minh City in Vietnam, it is easy to find craft breweries with operational capacities comparable to those of Western countries.

About 30 brewers have settled in Vietnam, welcoming a healthy flow of customers before and after the pandemic.

Vietnam is also home to the headquarters of award-winning brewer, Pasteur Street Brewing Company, with its renowned Marou cocoa pod-infused Cyclo Stout, listed as a must-try by Life and Travel Asia.

Indeed, the Vietnamese craft beer industry is not only growing in size but also in reputation.

An overview of the beer market in Vietnam

Beer consumption in Vietnam in 2022 accounted for 2.2% of the global market, or 3.8 million kiloliters of beer per year. This has made it the leader in the ASEAN region for beer consumption.

Major players dominating the market include domestic and international brands such as Heineken, Carlsberg, Sapporo Breweries, Hanoi Beer Alcohol and Beverage Corp. (Habeco) and Saigon Alcohol Beer and Beverage Corp. (Sabeco).

That’s not to say there isn’t room for more craft beers made in Vietnam.

On the contrary, the Vietnamese craft beer market is not only booming but also infusing the industry with its own taste of home.

What makes Vietnam a hotspot for craft beer brewing?

Craft beer recipes in Vietnam have evolved in all directions due to Vietnam’s geographical advantages.

Vietnam is home to a wealth of spices and fruits, which have been widely used in craft beer recipes, ranging from lemongrass, passion fruit and beetroot to coffee and cocoa.

This means that Vietnamese brewers are less dependent on imported ingredients, thereby reducing input costs and enabling more competitive pricing.

The infusion of local products has also set craft beer brewers in Vietnam apart from competitors elsewhere.

For example, the 2021 Asian Beer Championship cemented Vietnam’s position in the regional craft beer market, with four gold medals, tying Singapore.

The country is also known for its more relaxed legal environment for craft beer brewers, as they are allowed to produce craft beers in small batches. Unlike Thailand, which requires brewers to produce in quantities of at least 10,000 liters per year. As a result, many small-scale Thai brewers have moved production to Vietnam, where production of as little as 1,000 liters is permitted.

There is also the ease with which craft beer can be shipped from Vietnam to Thailand. With its geographical proximity and improved logistics, Vietnam is an optimal choice for brewers looking to legally produce in Vietnam in small batches and then export to Thailand.

Changing attitudes towards beer in Vietnam

Another key factor is Vietnam’s well-educated clientele. Gen Z in Vietnam keeps up to date with global trends, especially elite experiences like wine and craft beer tasting. They are eager to learn how their drinks are made – a common on-site experience at craft breweries.

Beer is now less a commodity than a culture among the younger generations of Vietnamese, who make up the bulk of the population.

There “nhau(intensive consumption of beer at gatherings) is observed among 20 and 30 year olds with a lower frequency. Drinking to get drunk is no longer the main purpose of alcohol consumption now that “tasting” has taken hold.

Middle-income consumers are also becoming more discerning of food and drink, and the unique recipes and on-site brewing of national craft beers are particularly appealing to this new breed of quality-conscious consumer.

Potential obstacles to the growth of the craft beer industry in Vietnam

But it’s not entirely easy for Vietnam’s craft beer brewers.

Recently, the government issued Decision 508/QD-TTg on April 23, specifying that there would be a roadmap to increase the Special Consumption Tax (TSP) on beer and alcoholic products by 2030.

This could lead to the imposition of a higher tax rate on certain alcoholic beverages. Currently, beer is subject to an SCT tax rate of 65%.

A higher tax on craft beer will drive up prices, causing profit problems for brewers.

However, it may also stimulate an exchange effect: at a higher price, craft beer may be considered a premium or luxury product, thereby increasing its perceived value.

Where is the craft beer industry heading in Vietnam?

Even though the beer market in Vietnam is dominated by major players like Sabeco, Habeco, Heineken and Carlsberg, craft beer still has its own slice of the pie – a rapidly growing slice.

This is due to the availability of unique products, ideal conditions for brewing craft beer, and changing attitudes among young Vietnamese.

Many see Vietnam’s craft beer boom as a fad – easy to carry.

However, it is more likely that this is just the beginning.

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Briefing Vietnam is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce equipment for foreign investors throughout Eurasia, including ASEAN, China, India, Indonesia, Russia & the Silk Road. For editorial questions, please contact us here and for a free subscription to our products, please click on here.

Dezan Shira & Associates providing business intelligence, due diligence, legal, tax and advisory services throughout Vietnam and the Asian region. We have offices in Hanoi and Ho Chi Minh City, as well as throughout China, Southeast Asia, India and Russia. For assistance with investing in Vietnam, please contact us at [email protected] or visit us at www.dezshira.com


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