Vietnam’s dairy market is worth over $5b and consumption is forecast to increase by 40% over the next five years. The cheese sub-segment is dominated by French multinational Groupe Bel with over 85% share.
Bel have played a long and patient game in Vietnam first entering the market 65 years ago.
Bel’s hero product in Vietnam is Laughing Cow, “La Vache qui rit”. Undoubtedly one reason for its success has been local manufacturing (investments worth over $25m) producing formats with nutritional claims to meet local market needs and price points.
Another equally important driver has been Bel’s strategy of targeting low to middle income consumers. To reach this segment, Bel has built an innovative Route to Market programme called ‘Sharing Cities’ that focuses on street vendors selling vegetables and local favourites like Banh Mi (a baguette sandwich).
Bel has a network of over 2000 street vendors in Ho Chi Minh alone and this channel accounts for over 30% of turnover. Bel’s research has shown that the repeat sales rate and loyalty to street vendors is high; vendors typically enjoy a personal relationship with their customers, entrenching Bel ever deeper into the community.
Bel’s CEO Antoine Fievet openly states, “We are aiming to turn the Vietnamese market into Bel’s cradle in Asia!”
Outside of Japan, Vietnam is Bel’s only other Asian manufacturing facility. Bel’s two Vietnamese factories have an annual capacity in excess of 25,000 tons and supply the SE Asia region.
Many foreign brands focus on the modern trade for growth, even in less developed markets. Bel’s success shows the Modern Trade isn’t the only way to make hay. I’ve worked with another major beverage business in Vietnam who like Bel have made the traditional trade the lynchpin of their success.
To paraphrase the French saying, perhaps we can now understand, Pourquoi La Vache Qui Rit rit?
Thanks to my colleague John Cathcart who inspired this blog post and provided photographs.