Food Empire - Phillip Securities 2023-09-05: Entrenching A Consumer Brand In Vietnam

• Built up a 14% market share in an ~US$400mil instant coffee market in Vietnam. The market share of Food Empire's Maccoffee brand was built in around a decade since the introduction of the flagship Café Pho in 2013.
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• The growth will stem from 3 key drivers:
  1. Organic growth in the instant coffee category of 3-5% p.a., in line with GDP and new coffee consumers;
  2. Market share gains from expanding geographically and capturing more new instant coffee consumers;
  3. New products (or extensions) for local and even export markets.
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Key highlights from the visit to Food Empire's factory in Ho Chi Minh over 29-30th August 2023

CONSUMER

• Type: Around 90% of instant coffee is consumed in the morning and largely (~70%) served with ice. This will vary with North Vietnam's consumption of more hot coffee.
• Age: The younger generation prefers tea and consumes coffee more at coffee shops as social drinkers. Instant coffee drinkers usually start in their mid-30s. To capture this group of customers, frequent taste tests, product display visibility and distribution is critical.
• Taste: Consumers tend not to switch to new brands unless they offer something new. Consumers prefer strong tasting coffee. Café Pho provides a strong taste even when ice is added.

COMPETITION

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Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2023-09-05 SGinvestors.io

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