The breweries in Vietnam – Focus on SABMiller

Focus on SABMillerSeptember 2012 - SABMiller Vietnam 

SABMiller (http://www.sabmiller.com) probably needs no introductions for most of you but for the sake of protocol, here’s a bit of background.  It is headquartered in London, United Kingdom and is listed on both the London and Johannesburg stock exchanges. It is the second largest brewing company in the world, after ABInbev.

In January 2006 SABMiller established a 50:50 JV with Vinamilk and through this partnership commissioned a greenfield brewery outside Ho Chi Minh City in southern Binh Duong province in 2007.

Whether through accident or design, the partnership was not to last and in 2009 SABMiller acquired Vinamilk’s 50% interest in SABMiller Vietnam JV Company Limited to become the sole shareholder in the Company.

SABMiller Vietnam Company Limited now operates as a wholly owned subsidiary of SABMiller

SABMiller market position in Vietnam:

Although a force to be reckoned with globally, SABMiller have never really found their footing in Vietnam. 

They are licensed to produce 500k hL of beer at their brewery in Binh Duong, just outside Saigon. 

According to their corporate website, they produced 171k hL in 2011. 

However, it is notable that a significant portion of this production is exported to countries regionally, such as Cambodia and Singapore. 

The root of the issue seems to be that SABMiller have relied on the model that has served them so well in other developing economies.  Make a better (meaning more consistent) beer, make it more efficiently and cheaper than the competition and the consumers will come.

They appear to have failed to realise that beer is a status product in Vietnam. 

On top of that, they have made a few interesting marketing decisions such as launching brands that the local population cannot easily pronounce such as Gambrinus and Zorok. 

Zorok was in fact developed specifically for the Vietnam market but it seems that it was omitted to check if the Vietnamese alphabet contains the letter “z” (It doesn’t…) thus initially making it almost impossible for anyone to actually order the beer. 

Miller High Life didn’t go so well either.  Among its gaffs was the national media campaign that relied on the tagline “It’s American Time, It’s Miller Time”.  Although American products and America itself are aspirational, American values may not be.  Thus, there was a disconnect and Vietnamese could not see themselves or their values in the brand.  

A campaign focusing simply on “It’s Miller Time”, may have worked.  Had SABMiller listened to this advice it would have saved them a lot of money and perhaps their brand would still be alive today. 

With these examples, we do not intend to be disparaging but merely point out that the beer market in Vietnam is not simple and little things make a big difference.  For brewers to enter the market successfully they need to listen to people on the ground.

SABMiller brands in Vietnam

 Outlook:

Being the second biggest brewing concern in the world would lead us to surmise that SABMiller has deep pockets.  It is unlikely to give up on one of the world’s most promising markets after only six years of effort. 

Yes, it has not had much success to date but has made some subtle but positive tweaks to its approach in recent months. 

Perhaps Gambrinus may not be destined to triumph over Heineken but SABMiller has a significant portfolio of brands globally from which to draw and it has the resources to implement almost any strategy in Vietnam

With a revision of its approach to the market and willingness to ask the right questions, it should certainly remain a contender.

This “Focus on SABMiller” is the sixth in our series of articles looking at the major brewing groups in Vietnam.  You can find the others here http://pomegranate.asia/w/understanding-beer-in-vietnam/.  Our article “Focus on Sapporo” will be released w/c 24th September so please come back for that.

Please feel free to contact us for more information.


Send to friend  |  Go back