Vietnam's beer brewers get creative as economy loses fizz

But CEO Trang Le says her team has spent less time pouring tipples this year, with drinkers watching their wallets amid a sharp fall in global demand for goods that has sapped Vietnam's export-focused economy. The communist country ranks No. 3 in Asia for both reliance on trade and consumption of beer.

Heineken logged a revenue drop of more than 20% in Vietnam, forcing the Dutch drinks giant to cut global profit forecasts in the first half of 2023, for example.

"Everyone is the same. We're all suffering," Le told Nikkei Asia.

In a bid to retain customers, C-Brewmaster's tap rooms in Hanoi and Ho Chi Minh City are offering new beers that cost 20% less.

And its rivals in the country's relatively young craft beer sector also have been rolling out retention strategies. BiaCraft partnered with new brands to raise exposure to its "artisan ales" and has promotions like "Toss the Boss," whereby customers toss a coin and get a free drink if they predict how it lands.

With locals' discretionary spending down, brewers East West and Heart of Darkness have started serving more tourists. Many companies are catering to a shift in demand to lower-cost drinks, as well as concocting new mixes to pique punters' curiosity. That includes Heineken, which has recorded lower sales of its premium brands but growing thirst for its cheaper Tiger and Bia Viet options, and launched a beer infused with Korean spirit soju.

Vietnamese down more beers by total volume than anyone else in Asia except Chinese and Japanese people, according to Kirin Holdings data released in December. But the tropical nation is also leading declines, with volume decreasing 5.5% year-on-year, the data shows. Craft beer is having a moment, as dozens of small-batch entrepreneurs fire up their fermenters, but corporations still dominate.

One reason for the high volume is that locals favor light drinks that are refreshing in the humid climate and that they can put away in copious amounts, especially lagers and watered-down brews. A glass of Heineken in Vietnam contains less alcohol than its U.S. cousin, for instance. A common saying in the country is "Khong say, khong ve." That is, "If you're not drunk, it's not time to go home."

But that sentiment appears to have less traction these days.

"People go out less, or when they do go out, they spend less," Heart of Darkness founder John Pemberton said of the downturn. "They have dinner and maybe instead of two beers, they have one."

He said distribution and traffic at his bar are down, so he is pivoting to contract brewing, or making other brands' brews. The pullback is being felt across Vietnam, even for the cheapest cans sold at outdoor markets, he added.

"That's scary when even the wet markets are struggling," he said at the Brew Asia expo on Thursday.

Most brewers blame the overall economic downturn, driven by a combination of Vietnam's real estate turmoil, decreasing exports and a corruption crackdown that unnerved investors. The slowdown, in turn, led to layoffs, consumer gloom and less disposable income. Taxes and a stricter law against drunken driving also pushed down demand.

Affected companies range from major Vietnamese brewer Sabeco, which said in a statement that "2023 has been challenging for the entire industry," to the likes of Saigon Fresh Beer Equipment. Ngo Tan Vu, the owner of the latter, said less drinking means fewer restaurants and manufacturers are ordering his kegs and chillers.

"Everything is so hard for people," he said.

Source: Nikkei Asia