How much do beer giants spend on advertising?

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According to the Vietnam Beer Association, beer consumption in 2017 reached more than 4 billion liters, with each Vietnamese person drinking an average of nearly 45 liters of beer per year.The attractiveness of the market makesEuromonitor Internationalcalls Vietnam "the next battlefield for brewers".

The battle at the drinking table is not only about market share, but also about "burning money" for advertising and marketing to increase brand awareness. In the past three years, Sabeco has not spent less than 1,000 billion VND on this item, while Habeco is maintaining a double-digit growth rate each year for advertising costs.

Writing about the marketAsia Pacific,EuromonitorVietnam reviewwill become a notable market. Thanks to street food culture and rapid urbanization, beer consumption in Vietnam is forecast to reach the highest growth rate in the period 2016 - 2021.

According to analysis by securities companies, more than 90% of the Vietnamese beer market is in the hands of 4 companies:Habeco, Hue Brewery (100% owned by Carlsberg), Sabeco and Heineken VN.The remaining 10% of the market belongs to a number of new businesses such as Masan Brewery, Sapporo, AB InBev or Carlsberg's Southeast Asia Brewery.

The attractiveness of the market always comes with fierce competition to grab every small piece of the market share pie. For the leading names, although their position has been established, to maintain market share in an attractive market, these businesses have to spend hundreds, even thousands of billions of VND each year on advertising and marketing.

In 2017, Sabeco spent VND1,221 billion on advertising and marketing expenses. Although it decreased by more than 6% compared to 2016, this is still a budget that is among the top in the market.

In a report to shareholders, the company's board of directors said the level of competition in the beer market is fierce, especially with foreign beer companies with strong financial resources. "Competitors are constantly investing in advertising, marketing, expanding capacity, and even engaging in unfair competition," the report said.

Marketing and sales are also the top tasks in recent years' reports to implement the tasks of the year. "Focus on investing in marketing costs to build the image and brand for brands according to long-term positioning and strategy, including product positioning in each segment," Sabeco's board of directors' report wrote.

With Habeco, once the leading name in the Northern market, however, this business's market share has been on the decline in recent years. Securities companies believe thatAlthough Habeco's Hanoi Beer is considered an iconic brand in the North, it is only a product in the low-cost, affordable segment. Losing market share in the mid-range and high-end segments to Sabeco and foreign competitors has caused Habeco to "fall" in its main market.

One of the weaknesses of this beer company, according to the assessment, lies in its marketing and branding activities."While major competitors, such as Sabeco and Heineken, are not only increasing spending on A&P but also improving the quality of marketing activities, Habeco is falling behind in its "safe zone" as we have not seen any breakthrough in branding activities recently," VCSC commented.

In the past two years, Habeco has been making efforts to change this. Expenditures on advertising, marketing, and sales support have more than doubled compared to the previous three years. In 2017, Habeco spent nearly VND570 billion.

For Heineken, although it has never announced its advertising revenue, according to businesses in the industry, this activity is always in the leading group. Specifically, Saigon Petroleum Services Joint Stock Company (SPSC) is the unit specializing in providing marketing staff for Heineken VN. However, in 2016, Heineken terminated the contract, causing SPSC's total revenue to lose more than 123 billion VND.