VietNamNet Bridge – Though their growth rates have been lower than food and dairy producers, ice cream producers are still pocketing high profits.

A report shows that ice cream is a large market with annual revenue of trillions of dong and a CAGR (compound annual growth rate) of 12.8 percent over the last three years.

More and more foreign ice cream brands have arrived in Vietnam and are in hot competition with veteran domestic brands.

Following US Buds and world-famous brands such as Baskin-Robbins, Snowee and Swensens, Haagen-Dazs, New Zealand, Monte Rosa, Fanny’s and Dairy Queen (DQ) have set up shop in Vietnam.

Baskin Robbins, when debuting in Vietnam, announced that it would open 50 shops in large cities within five years. After three years, it now has 23 shops in HCM City, Can Tho, Ba Ria – Vung Tau, Hanoi and Khanh Hoa.

Meanwhile, Buds has had eight branches, six franchised shops and seven kiosks;  Fanny’s has four shops in HCM City and one in Hanoi.

Orana Vietnam, a joint venture between Danish Orana and Vietnamese Phu Cong Minh Companies, which supplies materials made of fresh fruit to Vietnamese dairy producers such as Vinamilk, Dutch Lady and Dalat Milk, recently opened a $2 million factory making an ice-cream base.

It has also announced a plan to open a Danish-styled Osterberg ice cream shop. If the company succeeds with the shop, it will develop an Osterberg chain of shops.

The new factory will help the company increase its output by twofold to 6,000 tons per annum. In 2015, it plans to make 60-70 tons of ice cream base.

The Orana Vietnam’s factory would supply products to the distribution chain in Vietnam.

Vietnamese ice cream brands are feeling the pressure from foreign rivals. However, market survey firms say the domestic market is still controlled by Vietnamese brands.

A report from VP Bank Securities Company (VPS), citing figures from different sources, pointed out that Vietnamese products are still dominant.

Kinh Do group, known as a large sweets manufacturer, led the market in 2013 with its two well-known brands, Celano and Merino, accounting for 29 percent of market share. The second and third positions belonged to the Vinamilk, the nation’s leading dairy producer, and Thuy Ta, respectively.

Also in 2013, Kinh Do had the highest retail turnover growth rate in the industry, at 27.8 percent.

According to VPS, consumers are familiar with Vietnamese brands which understand local consumers well.

DNSG