Consumers tend to shift to low alcohol beer products.

NielsenIQ: Consumers Shift to Low-Alcohol Beers

Over the past two years, low-alcohol beer products have been increasingly accepted by consumers. This trend stems from the growing concern for health issues in the past few years.

Ms. Le Minh Trang - Deputy Director of NielsenIQ Retail Research Department - Photo: Chi Cuong

Sharing at the Workshop "Tax amendment to promote business activities", Ms. Le Minh Trang, Deputy Director of Retail Research Department, NielsenIQ said that if the special consumption tax (SCT) increases, it can put pressure on consumers. Previously, with the change of Decree 100 on increasing the penalty for drivers using drinks while participating in traffic, it can be seen that the revenue of restaurants and eateries distributing beer products has been affected. Consumers have also begun to reduce the frequency of drinking beer outside and this directly affects the revenue of the beer industry in this channel, and more specifically the high-end segment of the beer industry.

By Q1/2024, the beer industry had positive growth compared to the same period last year. Looking at the longer term, the industry has witnessed a decline of 3.9% from Q1/2023, mainly due to reduced demand.

NielsenIQ's consumer behavior research report for the second quarter of 2024 shows that two of the most popular ways adopted by 50% of consumers in the two major cities - Hanoi and Ho Chi Minh City - are cutting unnecessary expenses, including eating out at restaurants and optimizing home cooking. This change directly affects the continuous decline in revenue of restaurant and food chains from January 2023 to present. In the past 12 months, this decline is 6% nationwide and 11% in 6 major cities, including Hanoi, Hai Phong, Da Nang, Nha Trang, Can Tho, and Ho Chi Minh City.

In addition, over the past 2 years, NielsenIQ has recorded that low-alcohol beer products are being welcomed by consumers with an increase of nearly 35% in output in the past 12 months compared to the same period last year, especially in the 6 major cities and modern channels of Vietnam.

The above trends all stem from the great concern of Vietnamese consumers about health issues in the past few years. And this trend is likely to continue and impact the beer industry in the future.

Also in the past two years, NielsenIQ has seen a polarized consumer trend related to product price segmentation occurring in the beer industry with growth in both the mass and super premium segments.

However, with the impact of the increase in special consumption tax, NielsenIQ believes that the economy segment can still maintain its position as the main segment, contributing about 55 - 60% of the industry's output as it is now, while the super-premium segment will need further observation. This will bring growth potential to businesses with products in the corresponding segment.

“In the trend of cutting consumer spending, in addition to cutting down on dosage, consumers can also cut down on their beer and wine drinking habits. Accordingly, the popular segment will increasingly increase in importance, become more and more popular, and high-end consumers can consider spending to fit their budget,” Ms. Trang analyzed.

The industry has witnessed a 3.9% decline from Q1/2023 - Source: NIQ

From the perspective of the market research unit, NielsenIQ representative said that businesses should understand the limitations of consumers in this difficult period. When having to increase spending on essential needs, up to 55% of surveyed people said that paying for anything that saves them time is worth it.

Second, brands also need to ensure their presence with consumers, especially in the context of consumer behavior shifting flexibly between shopping channels. This means that growth will come from a balanced strategy of online and offline channels. Businesses should also pay attention to health and sustainability factors, exploiting communication factors and emphasizing appropriate product messages to tap into customers' interests in health and sustainable development.

Source: https://baodautu.vn/nielseniq-nguoi-tieu-dung-co-xu-huong-chuyen-dich-sang-cac-san-pham-bia-co-nong-do-con-thap-d222422.html