The battle in the fish sauce market.

Competition for market share in the fish sauce industry is becoming increasingly fierce as traditional fish sauce companies change their packaging and flavors, while major brands continue to increase investment.

Before 2002, the market only had the concept of traditional fish sauce with two main ingredients: fish and salt. Meanwhile, fish sauce produced on industrial lines contained less fish and also included several necessary additives.

With its Phu Quoc fish sauce brand, Knorr, Unilever was the first company to establish an industrial-scale production and marketing model for fish sauce. However, due to its premium positioning, the product is not inexpensive. This is also the reason why this brand of fish sauce has not yet revolutionized the market.

It wasn't until 2007, when Masan Consumer Corporation's bottled fish sauce brands were launched, that the real battle began. With the Nam Ngu and Chinsu fish sauce brands, Masan not only dethroned Phu Quoc - Knorr as the number one brand but also created a wave in the market, rapidly increasing its market share thanks to its large-scale production, competitive pricing, and substantial advertising budget.Following Masan, other fish sauce brands continuously emerged, along with aggressive advertising and marketing strategies.

In 2009, Ngoc Nghia Company – a business that had become wealthy by producing packaging for leading names in the beverage and food industries – also decided to invest in the fish sauce industry. By contributing capital to Hong Phu Food Company and investing in a professional production line, Ngoc Nghia soon launched two fish sauce brands: Kabin and Thai Long.

Another major player in the food industry is Acecook Company, with ample resources in technology, finance, market understanding, and distribution systems. In early 2010, they also decided to enter the market with their De Nhat fish sauce brand. Micoem, meanwhile, launched its Ong Tay fish sauce...

Masan plans to triple the current production capacity of its fish sauce factories in the near future.

However, not every business that invests in fish sauce production achieves success.As evidence, since entering the market, Ngoc Nghia has never made a profit in any year; in fact, it has consistently suffered losses exceeding expectations, ranging from tens of billions to 200 billion VND each year.Although this loss was attributed to the nature of the consumer goods industry, where new products require significant investment in advertising and sales, it also created disagreements among the company's shareholders.

Things didn't go smoothly either. After a massive marketing campaign for its De Nhat fish sauce, Acecook quietly transferred the brand to Nam Phuong Vietnam Company at the end of 2013. The product was then renamed Barona fish sauce.

In the market, although there are many fish sauce brands produced on industrially invested lines with fairly systematic investment, the market share is still mainly concentrated in the hands of a single producer. In 2012, when Masan's fish sauce market share peaked at 70% of total market revenue, other businesses such as Hung Thinh, De Nhat, Hong Hanh, Muoi Thu, Micoem, 584 Nha Trang, Thanh Ha… only held market shares of 1-5%. Notably, some fish sauce products that were once heavily advertised, such as Kabin and Phu Quoc - Knorr, are no longer in the top 10 of this statistic.

The intense competition from major brands has also caused traditional fish sauce producers – most of whom operate in a rather fragmented manner – to struggle for many years.When industrial fish sauce production emerged, only a few large enterprises producing according to traditional recipes survived in Phan Thiet (Binh Thuan), Nha Trang (Khanh Hoa), Cat Hai (Hai Phong), etc., while smaller establishments mainly sold raw materials or wholesale by the barrel, resulting in low revenue.Consumer tastes have also changed, with people now preferring fish sauce with more added spices.Direct competition with major brands is considered too risky for traditional fish sauce producers.

Lien Thanh Company, a fish sauce producer established over 100 years ago, was also forced to invest in new production lines, rebuild its distribution system, and improve its packaging and branding. However, the company struggled due to the exorbitant advertising costs. Furthermore, many talented employees left the company to join competitors.

According to market research firm Euromonitor, the Vietnamese fish sauce market in 2015 was worth 11.3 trillion VND, with industrially produced fish sauce accounting for 76% and traditional fish sauce only 24% of the market share.

According to an industry expert, many fish sauce businesses in Phu Quoc, Nha Trang, and Binh Thuan, such as Lien Thanh, Hung Viet, and Hanh Phuc, are also facing considerable difficulties.According to him, manufacturers buy one liter of pure fish sauce for 30,000-50,000 VND, then process and dilute it to make five liters of industrial fish sauce.

However, according to Mr. Pham Ngoc Dung, an experienced expert in the field of fish sauce production: "Currently, there is no government document that uses the terms 'traditional fish sauce' and 'industrial fish sauce,' but only a general standard that fish sauce must have 10 degrees of protein content, while anything below 10 degrees of protein is called dipping sauce. Also, according to many people's understanding, 'traditional fish sauce' is fish sauce made only of fish, salt, and water, while anything with additives is called 'industrial fish sauce.' However, most fish sauce producers today, including those in Phu Quoc, Nha Trang, and Phan Thiet, use flavor enhancers to adjust the taste, because pure fish sauce is raw fish sauce with a high salt content."

Regarding food additives, Mr. Dung noted that additives are not chemicals but rather seasonings used in permitted quantities to enhance the flavor of food and ensure the health of consumers. With permitted dosages and a reliable source of additives, these substances will improve the quality of the product without compromising its essence.

Sharing the same viewpoint, Ms. Le Thi Nga - Senior Director of Product Research and Development at Masan, stated: “For over 10 years, we have continuously learned and researched Vietnamese cuisine as well as the science of the fish sauce industry. And we have discovered some truths that people may not know: high protein content doesn't necessarily mean it's delicious, high protein content doesn't necessarily mean it's good, and high salt content doesn't necessarily mean it's clean.”

According to the director, since 2008, Masan has invested in a fish sauce fermentation facility in Phu Quoc, operating with 448 fermentation vats and a total capacity of 10,000 tons of fish. With its current capacity, the Masan Phu Quoc facility annually supplies approximately 15% of the total raw fish sauce needs for Chin-su and Nam Ngu fish sauce products. In addition, to meet the large production demand, the company also collaborates with reputable suppliers to purchase fish sauce. It is estimated that annually, the company purchases about 60% of the total fish sauce production from major fish sauce producing regions in Vietnam (Phu Quoc, Kien Giang, Nha Trang, Phan Thiet, etc.), meeting 85% of Masan's remaining raw fish sauce needs.

According to a company representative, Masan plans to triple its current production capacity and become the largest sausage factory in Phu Quoc island district by 2017-2018.

With significant investment from major players in the industry, many traditional fish sauce producers have recently made more thorough preparations and calculations, improving packaging and flavor, and seeking to expand their markets. Nha Trang 584 Seafood Joint Stock Company, with its traditional fish sauce product, sold 20% of its capital to PAN Food Company. This is one of the moves demonstrating that traditional fish sauce businesses are moving towards more professional operations.

"Traditional fish sauce producers have sought to introduce their products into modern distribution channels such as supermarkets and convenience stores. With limited financial resources and unable to pursue expensive advertising methods, they choose social media and online forums for the cheapest marketing option," commented Ms. Nguyen Thi Tinh, President of the Phu Quoc Fish Sauce Association.

She also stated that geographical indications are one of the professional ways to help traditional fish sauce brands gain a new position. This was the case in the first half of the year.In 2016, the number of geographical indication stamps issued for Phu Quoc fish sauce increased by 1.5 times compared to the same period last year.

A report on consumer goods market share in Vietnam published by Massan Consumer in April also showed that the company's fish sauce market share currently accounts for 67.8% (Nielsen report updated 2015).According to Nielsen Market Research, the Vietnamese spice industry is expected to maintain an annual growth rate of 25-32% from now until 2022, with fish sauce being the most competitive product. Therefore, the market share landscape for fish sauce is likely to continue to change significantly in the coming period.

According to VNE