TEA IN VIETNAM - ANALYSIS

Country Report | Nov 2024

KEY DATA FINDINGS Market sizes

Retail value sales rise by 5% in current terms in 2024 to VND8.7 trillion Sales of Tea
Other tea is the best performing category in 2024, with retail value sales rising by 6% Retail Value RSP - VND billion - Current - 2010-2029
in current terms to VND257 billion
Lipton Teas & Infusions is the leading player in 2024, with a retail value share of 17%
8,739 Forecast
14,000
Retail sales are set to grow at a current value CAGR of 7% (2024 constant value CAGR
of 3%) over the forecast period to VND12.0 trillion 12,000

2024 DEVELOPMENTS 10,000

Vietnamese consumers continue to tighten their spending, affecting 8,000

the growth of tea

6,000
While the price of raw coffee has increased by two to three times in the past year,
increasing the cost of this product, the price of raw tea has been relatively stable. 4,000
However, consumers are still concerned about the economic downturn, and feel
insecurity about job losses caused by slow economic recovery and global uncertainty 2,000
due to wars and security crises. Thus, Vietnamese consumers have shown a more
cautious approach to their spending, prioritising essential items over those that are 0
non-essential. They regularly look out for discount events, hoping for anywhere 2010 2024 2029
between 20% and 50% price reductions, and are open to buying alternative brands if
they offer more competitive pricing. Consequently, these factors are set to prevent
stronger retail volume and current value growth for tea in 2024. Sales Performance of Tea
% Y-O-Y Retail Value RSP Growth 2010-2029
Product innovation stimulates consumer demand and interest
Despite the challenges, tea is set to maintain volume and current value growth in retail
4.7% Forecast
in Vietnam in 2024. Health awareness has been steadily increasing amongst 12%
Vietnamese consumers, influenced by the expansion of the internet and social
networks. An increasing number of people are placing more emphasis on their health, 10%
and are attracted to products which provide additional benefits, including weight loss,
skin enhancement, and hormone balance. Therefore, many people continue to 8%
purchase these innovative products for their added health benefits, despite the higher
costs. This trend has also led local and international players to concentrate on 6%
developing and releasing new innovative tea products in 2024, to enhance consumer
demand and interest. For instance, Lipton Teas & Infusions has a selection of three
4%
aromatic milk tea flavours which offer a delightful consumption experience, skilfully
combining exquisite taste with a focus on health, with each cup containing fewer than
100 calories. 2%

Online channels help boost sales of tea in 2024 0%

In 2024, despite a decrease in shopping frequency, consumers are expanding their -2%
2010 2024 2029
shopping channels and increasing the average spend per purchase. Indeed, Vietnamese
men in particular are showing significant interest in online shopping through retail e-
commerce platforms such as Shopee, Lazada, and TikTok, due to regular discount
campaigns and convenience. More brands are also using livestreaming on online
platforms to reach and interact with customers in Vietnam. For example, Cozy
Sales of Tea by Category
Retail Value RSP - VND billion - Current - 2024 Growth Performance
(Ecological Product JSC) advertised a massive sale with up to 15% off, and a discount
down to VND19,000 for Gold Label Cozy tea bags via a livestream on TikTok Shop.
Black Tea
Furthermore, consumers can often enjoy free shipping and receive free items such as 2,134.4
spoons or glasses when they purchase products during livestreams. Overall, online
Fruit/Herbal Tea
channels have been helping to boost sales of tea in 2024, and retail e-commerce is 1,064.6
therefore set to witness notable value growth in Vietnam in 2024, and represent an
Green Tea
increasing share of sales of tea in this year. However, while the shift in share from 4,795.2
traditional offline retail channels to modern online e-commerce platforms presents
Instant Tea
opportunities to reach new customers across the country, it also presents business 487.6
challenges. This is because it becomes more challenging to build customer loyalty, as
Other Tea
customers can easily switch to other brands with lower prices within the same e- 256.9
commerce platform.
0% 5% 10%

PROSPECTS AND OPPORTUNITIES TEA 8,738.7 CURRENT % CAGR % CAGR

YEAR % 2019-2024 2024-2029
GROWTH
Tea predicted to grow well thanks to a brighter economic performance

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The World Bank’s 2024 forecast indicates that Vietnam’s GDP is expected to experience
growth in the coming years, with projections of 6.0% for 2025 and 6.5% for 2026. This is Competitive landscape
expected to contribute to growth in demand for tea in the future, as individuals
become more assured in their financial ability to purchase tea products. Consequently, Company Shares of Tea
tea in Vietnam is expected to see steady rises in both retail volume and current value % Share (NBO) - Retail Value RSP - 2024
terms throughout the forecast period. Furthermore, Vietnamese consumers are
expected to increasingly acknowledge the importance of their health, as they are Lipton Teas & Infusions 16.7%
constantly influenced by information from the government, media, and online
platforms. This trend is expected to boost sales of tea, since many consumers hold a Ecological Product JSC 8.6%
strong belief in the health benefits of tea, including stress reduction, weight loss, and Vietnam National Tea JSC 4.9%
skin improvement, amongst others.
Vinh Tien Co Ltd 4.3%
The category will see diversification in the future Hoang Long Tea Co Ltd 3.0%

According to the Vietnam Tea Association, the most popular domestic tea products Cau Tre Export Goods Pro... 2.8%
during the forecast period are expected to remain those within green tea. However, Nestlé Vietnam Co Ltd 1.3%
sales are increasingly split, with various consumer preferences. One of the outstanding
demands is strong flavours. There is a common misconception that young people today MJF Group 1.1%
prefer coffee to tea. However, some young people also like tea; they enjoy it in Tam Chau Tea & Coffee Co... 0.7%
different ways than young people did in the past. Instead of drinking pure tea, they mix
it with fruits and other ingredients to create unique flavours. Thus, international brands Dai Gia Trade & Service ... 0.4%
such as Cozy and Lipton are launching innovative products for the younger generation, Others 56.2%
such as new fruit-flavoured instant teas
Meanwhile, local companies are paying more attention to exporting speciality teas
from each region to high-end customers. For example, Tay Bac Tea and Special Food
Company Ltd (Shanam tea brand) has invested in speciality teas made from ancient tea Brand Shares of Tea
trees named “Thach Co Tra”, located in the primeval forest. This local ancient tea holds % Share (LBN) - Retail Value RSP - 2024
significant economic value due to its numerous medicinal properties, and its processed
products can sell for between VND2.5 and VND25 million per kilogram, therefore Lipton Yellow Label 13.3%
offering a higher profit margin than other speciality teas. The company, having
succeeded in the northern market, is now targeting the high-end gifting segment in the Cozy 8.6%
southern region. Vinh Tien 4.3%
Vinatea 4.2%
Both the government and manufacturers will continue to focus on the
sustainable development of tea in the future Lipton 3.0%
Hoang Long 3.0%
During the forecast period, more people in Vietnam are expected to pay more for
sustainable products, driven by the government’s strong promotion of a Net Zero Cau Tre 2.2%
lifestyle. Therefore, local companies such as Tan Hiep Phat and Cau Dat will collaborate Nestea 1.3%
with the government to push the development of sustainable tea moving forward. As
an example, Thai Nguyen has been chosen as a key area for growing a number of Dilmah 1.1%
industrial crops, mostly tea trees that are used for processing and drinking. This has Vinatea O Long Tea 0.7%
made Thai Nguyen a centre for processing tea. To make the Northern Midland and
Tam Chau O Long Tea 0.7%
Mountainous Region Planning for 2021-2030 work better, with a vision towards 2050,
the government has pushed for the use of science and technology in the production Cau Tre O Long Tea 0.6%
and processing of safe VietGAP (Vietnamese Good Agricultural Practices) and organic
Tra Dai Gia O Long Tea 0.4%
tea, which will improve the quality of products. At the same time, the Provincial
People’s Committee, unions, and cooperatives will work closely with farmers to review Others 56.6%
tea production areas associated with tourism development, building growing area
5-Year Trend
codes, and expanding the area for organic and clean tea. Increasing share Decreasing share No change

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