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A report by Decision Lab reveals that Gen Z in Vietnam dominates the packaged food market, with individuals aged 15 to 24 constituting 68% of the population This demographic presents a significant opportunity for snack companies like Lay's to increase their sales of packaged goods However, Vietnam's population is rapidly aging, with projections indicating that by 2050, seniors will account for 20.4% of the population, rising from 7.7% in 2020 As older consumers prioritize health, this shift could pose challenges for Lay's and similar brands in the future.
In 2022, the GDP exceeded 400 billion USD for the first time, marking a significant milestone for the economy The General Statistics Office estimates that the GDP per capita reached 95.6 million VND, equivalent to approximately 4,110 USD, reflecting an increase of 393 USD from the previous year.
2021 Vietnam's GDP in particular had a significant boost in 2022 in the past
12 years with an increase of 8.02% over the previous year
Tiguưte 1: Vietnam s GDP Growth 2011-2022 from the General Statistics Office
In 2022, final consumption rose by 7.18% compared to 2021, contributing significantly to the overall GDP growth rate at 49.32% The labor force expanded to 51.7 million individuals, an increase of 1.1 million from the previous year, while the unemployment rate for working-age individuals remained low at 2.32% This environment presents an opportunity for products that can enhance productivity and improve the quality of new offerings.
Jul 2020 Jan 2021 Jul 2021 Jan 2022 Jut 2022 Jan 2023
Figure 2: Vietnam's Unemployment rate 2020-2023 from Trading Economics
The predicted total retail sales of products and services for consumers in
In 2022, Vietnam's GDP is projected to reach VND 5,679 trillion, reflecting a 19.8% increase from the previous year Although salaries are expected to rise by at least 5.7% per person, they still lag behind those in other Asian countries Many citizens are willing to accept the federal minimum wage of $260, highlighting the economic challenges faced by low-income individuals Products like Lay's offer affordable snack options for those at work or school, presenting additional opportunities in the market.
Environmental pollution and climate change have adversely affected food production, particularly in the potato industry, leading to a decline in both potato cultivation and yield globally To address diverse consumer demands, Lay's continually introduces new recipes for their French fries, emphasizing the importance of high-quality fresh potatoes However, potato snack companies, including Lay's, face significant challenges in production processes and quantities, as poor-quality potatoes hinder the creation of tasty chips that satisfy consumer preferences.
In 2022, the e-commerce industry in Vietnam is projected to reach $16.4 billion, marking a 20% increase from the previous year, with approximately 57-60 million Vietnamese engaging in online shopping This burgeoning market presents significant opportunities for brands like Lay's, which should capitalize on the industry's growth potential Additionally, Lay's is committed to enhancing technology in potato farming and has invested years into researching potato varieties that thrive in Vietnam's climate, ensuring the production of high-quality potato products that meet international standards.
Since 2018, the Vietnamese government has significantly reduced import duties on special products, including confectionery, from ASEAN countries to nearly zero, fulfilling its commitment under the ATIGA agreement Following the signing of the EVFTA in 2019, EU countries will also benefit from similar incentives for these products This development intensifies competition in Vietnam's already saturated packaged food market, prompting established brands like Lay's to seek strategies to maintain their market share amidst growing rivalry.
In 2022, the Vietnamese Government enacted 17 decrees regarding the Preferential Export Tariff and the Special Preferential Import Tariff, designed to facilitate the implementation of 17 agreements for the period of 2022-2027 These measures align with the List of export and import goods under the AHTN 2022, as outlined in Circular No 31/2022/TT-BTC issued by the Ministry of Finance on June 8, 2022.
Food quality holds significant importance for the Vietnamese, who prioritize a healthy diet and tend to avoid junk food brands like Lay's, potentially affecting their sales The foreign confectionery market in Vietnam has seen steady growth during holidays and cultural events, yet local brands such as Kinh Do, Hai Ha, Bibica, Huu Nghi, and Orion Vietnam dominate the market with a substantial 75-80% share, leaving only 20-25% for imported options Recent surveys indicate that Vietnam boasts the fastest-growing snack market globally, with younger generations shifting from traditional three meals a day to six smaller meals, reflecting changing dietary habits.
Vietnamese youth consume junk food approximately eight times a week, spending an average of $0.70 per purchase Despite 86% of consumers emphasizing portion control and clear ingredient information, a Nielsen report reveals that they collectively spend around VND 13,000 billion on junk food each month.
In recent years, the pandemic has shifted Vietnamese consumers' preferences towards healthier snack options, indicating a growing trend in the market This change suggests that Lay's faces increased indirect competition, as emerging brands not only vie for market share but also present potential synergistic challenges.
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PepsiCo, a leader in the food and beverage industry with its flagship product, Pepsi-Cola, presents significant opportunities for Lay's to leverage the halo effect in its advertising By capitalizing on PepsiCo's established positive reputation, Lay's can diversify into savory snacks like potato chips more effectively The brand can also benefit from the parent company's name recognition, which may help reduce marketing costs and enhance consumer loyalty.
To meet the growing demand for savory snacks in Vietnam, Lay's must ensure a reliable supply of sustainable suppliers Potatoes are cultivated in 28 countries globally using regenerative agriculture and advanced farming technologies to guarantee high-quality production In Vietnam, potato farms in Da Lat, Dak Lak, and Gia Lai have shown potential for increased yields and crops that meet international standards, thanks to training and technical support from Pepsico Foods Vietnam.
Potatoes are sourced globally, but suppliers prioritize offering locally produced potato products to customers This focus presents challenges in identifying potato varieties that thrive in Vietnam's climate Consequently, suppliers must ensure their products meet brand standards and safety regulations PepsiCo places significant emphasis on making necessary adjustments to uphold these quality and conformity standards.
Vietnam's farms are capable of producing over 200,000 tons of potatoes each year, fulfilling 75% of domestic demand This production capacity can significantly enhance farmers' quality of life and financial stability while contributing to the establishment of a sustainable supply chain for potatoes.
In 2020, PepsiCo launched an initiative to enhance its potato cultivation by selecting a province with optimal climate and soil conditions This strategic move aims to increase production during the program's initial phase, with expectations to double output in the producing provinces by 2023.
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Lay’s potato chips enjoy immense popularity in Vietnam, with a wide range of resellers including major supermarkets like Coopmart, Aeon, Lottemart, and Megamall, as well as convenience stores such as Circle K, Family Mart, and Ministop Additionally, Lay’s products are available on e-commerce platforms like Shopee, Lazada, and Tiki, along with traditional grocery stores This diverse availability reflects the growing trend of online shopping in Vietnam, driven by globalization.
Figure 3: Vietnamese supermarkets sell Lay's products b) Marketing service agencies
Lay's is targeting Gen Z consumers in Vietnam, who make up 25% of the workforce, by promoting its products through popular entertainment platforms like YouTube, Facebook, and Instagram A standout initiative is the Lay's Crispy Subtitles campaign, executed by Happiness Saigon, which won the prestigious grand prize in the broadcast/audio category at a festival in August.
The Lay's crispy campaign generated significant excitement in the Vietnamese media landscape, gaining traction in over 80 countries It quickly became a trending topic on Google and across social media platforms worldwide Major outlets, including Gizmodo, Yahoo News, and Virgin Radio, extensively covered the phenomenon, highlighting its global impact.
GRAND PRIX Xi BRONZE Xi HAPPINESS SAIGON
Figure 4: Lay's Crispy Subtitles Campaign
To support individuals affected financially by the Covid-19 pandemic, Lay's Vietnam has reintroduced the "A Million Meals 2021" campaign, promoting the slogan "A Meal, A Trust." This initiative has strengthened Lay's reputation in Vietnam and successfully enhanced local consumer awareness, positioning the brand for long-term benefits.
Lay's potato chips primarily appeal to young snackers and are commonly enjoyed at social gatherings, events, and during travel However, there has been a notable shift towards at-home consumption, influenced by changing consumer behaviors during the Covid-19 pandemic In response to growing health concerns, PepsiCo is reformulating its products to reduce added sugar, sodium, and saturated fat Additionally, the company aims to adapt its product portfolio to align with evolving consumer preferences and trends among affluent customers.
The shift from traditional retail to e-commerce is increasingly evident, especially in the packaged food sector Key factors influencing packaged food purchases include quality, safety, freshness, price, brand, and expiration date Lay's products excel in meeting these essential criteria, leading to an anticipated increase in consumption during and after the Covid-19 pandemic.
Oishi, one of the pioneering global companies in the Philippines, made its mark in Vietnam by establishing commercial operations in Ho Chi Minh City, quickly becoming the most popular brand in the Vietnamese snack industry Generations of Vietnamese people fondly associate Oishi with their childhood, thanks to the successful launch of its first shrimp snack product, which resonated with consumers of all ages nationwide In 1997, Liwayway expanded its food sector in Vietnam, offering a diverse range of products under the Oishi brand, including snacks, candies, and beverages Over the years, Oishi has garnered numerous accolades for its high-quality and food safety standards, solidifying its reputation in the market Despite holding a 9% share in the savory snacks segment, Oishi remains a significant player, leading the market with an 11% share in brand value.
Brand Shares of Savoury Snacks a4a¢@aeprpeeree t
Figure 5: Brand Shares of Savoury Snacks adapted from Passport (2020) O’star
Orion Vina Co., Ltd is a leading name in the Vietnamese snack market, known for its commitment to quality and safety Each product undergoes rigorous control and verification processes before reaching consumers Following the remarkable success of its ChocoPie in the pastry sector, Orion has solidified its popularity among snack lovers.
Launched between 2008 and 2010, the O'Star potato snack has expanded its flavor offerings and actively participated in community events, enhancing the Orion Vina brand's visibility Oishi aims to deliver enjoyable products while fostering lasting relationships with stakeholders However, as of 2020, O'Star remains a minor competitor to Lay's, ranking four places lower with a market share of 4.3%.
Founded in 1984, Tan Tan has evolved from a modest processing factory into a renowned peanut snack brand, successfully expanding its reach to markets in the United States, Korea, and China Offering a diverse range of flavors, Tan Tan prioritizes quality by annually distributing fresh seeds to farmers The brand also provides gift baskets and tin box packaging for special occasions like Tet Committed to using natural, fresh, and pure ingredients, Tan Tan stands out in the market, particularly as health-conscious consumers increasingly seek better eating habits, impacting competitors like Lay's.
CJ Corporation, a leading South Korean company, excels in various sectors including biotechnology, entertainment, media, and logistics One of its notable subsidiaries, CJ Food Corp, founded in 1978, successfully introduced Korean cuisine to the global market The Bibigo product line, particularly popular in Vietnam, has seen remarkable success, largely due to a partnership with the well-known actor Park Seo Joon, which has significantly boosted CJ's revenue This surge in popularity has alarmed competitors, as many Vietnamese consumers are now opting for Bibigo products for healthier snack options, solidifying Bibigo's status as a preferred choice in the market and positioning Lace as a formidable competitor.
Segment Demographic Geographic Psychographic Behaviour al
Age: 2-14 Compared to Personality: Occasions:
Education: other bright and Daily,
In the competitive landscape of school lunches, brands like Lay's cater to the imaginative needs of kindergarten and primary school students during breaktime Secondary school snacks are essential for consumers who engage in outdoor activities with friends and family, often relying on support from their households While these students may not have personal income, they enjoy the carefree lifestyle that comes with sharing enjoyable and nutritious snacks.
Students throughout the activites oF favorite Gender: Boys, girls country, from want a snack snack Children Marital Status: rural to urban during school Usage
Single or have a Status: relationship Medium to
Heavy Usage Rate: Potential users Loyalty Status: High
Education: Enjoy junk While or
Secondary school, food, creative, middle of
Highschool, College proactive,energ studying,
Income: None to etic, busting don’t have middle income Lifestyle: Spare time
Occupation: Carefree to for cooking,
Student, intern healthy-oriented | break time
Gender: Boys, girls or lunch or
Single or have a Benefits: relationship Avoid hunger, quick snack, reduce stress Usage Status: Regular and potential users Usage Rate: Medium Loyalty Status: Medium to high
Education: postgraduated or higher education
Income: No income to high income
Single or have a relationship or married
Flexible, well organized, independent Lifestyle:
During busy study or work sessions, finding time to cook can be challenging, making quick snacks a convenient solution for meals or breaks These snacks help avoid hunger, provide a quick energy boost, and reduce stress levels However, the current user base is limited, with light usage rates and low loyalty among consumers.
As the leading brand of potato chips worldwide, Lay's enjoys a dominant position in the packaged food industry's savory snacks segment As a result,
Lay's is expanding its consumer base through both traditional retail and online sales, ensuring its products are easily accessible in modern grocery stores, particularly with the rise of convenience stores nationwide The brand is leveraging online platforms to introduce lesser-known snack flavors, allowing consumers to discover new options without the limitations of retail shelf space, despite e-commerce sales for Lay's still being relatively low.
Vietnam offers a thriving snack market, highlighted by Pepsico's insights into its strong purchasing power and promising opportunities Targeting Gen Z consumers, known for their fast-paced lifestyles, Lay's snacks provide ideal solutions that cater to their demand for convenient, practical, and accessible options Whether during work or leisure, Lay's snacks stand out as the perfect choice for busy individuals seeking quick and satisfying treats.
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In the mid-2000s, the Vivaldi group identified a risk to the American market for their company, prompting a collaboration to create a new brand strategy They recognized that their original slogan, “Betcha cannot eat only one,” was too literal and overlooked consumer emotions In response, Vivaldi introduced the new tagline "Get Your Smile," which focused on enhancing consumer joy and satisfaction This repositioning strategy proved successful, leading to a revenue increase of approximately 20% Now, Frito Lays not only acknowledges the irresistible nature of their products but also aims to bring happiness to their customers.
PepsiCo's Lay's is a leading brand of fresh potato snacks known for its commitment to product quality and customer satisfaction Originally named Poca in Vietnam, the brand rebranded to Lay's in 2009, offering a diverse range of flavors tailored to regional preferences Each market sees unique product launches designed to cater to local tastes while ensuring high quality The eye-catching packaging, featuring convenient trays and vibrant branding, enhances the consumer experience, allowing customers to savor each moment with vitality According to Euromonitor International Limited, Lay's captured a 7.7% market share in Vietnam in 2021.
This diverse snack food line offers ten unique flavors to cater to various consumer preferences, including Lay's Natural Classic Flavor, Seafood Flavor, Brazil BBQ Pork Rib, Nor Seaweed, Wavy Texas Tenderloin Steak, Wavy Cheddar Cheese, Wavy Hong Kong Crab XO Sauce, Wavy Korean Spicy Chicken with Cheese, Wavy Lobster with Golden Salted Egg Sauce, and Wavy Original Fine Salt.
Lays has established itself as an affordable and delicious snack option globally, offering its chips at competitive prices Factors such as size, production locations, and availability affect the cost of Lays products Additionally, pricing strategies are shaped by bulk ordering, promotions, and product quality On average, a bag of Lays chips costs between 12,000 to 23,000 VND, contributing to Frito-Lay's impressive revenue of over USD 15 billion worldwide.
Lays Orion Oishi Tan Tan Bibigo
Healthy ingredients | Fried by oil | Fried by oil | Not fried by oil | Not fried Fried by sunflower oil
Brand recognition High High High Low Low
Figure 6: Snack Companies Prices comparision 2.4.3 Place/Distribution
Suntory PepsiCo Vietnam, a joint venture between PepsiCo and Suntory, leverages its extensive distribution network to ensure that Lay's products are widely available across most retail locations in Vietnam.
Traditional Trade: Implement Business objectives to bring in revenue and promote profits Traditional sales channels (including: Markets, Grocery Stores, Internet ) through a nationwide distribution network
Modern Trade: Implement company objectives to increase sales and profitability Convenience stores, supermarkets, and hypermarkets are examples of contemporary sales channels
On-premise: Put company goals into action to increase local profitability and boost local income (restaurants, hotels, amusement parks, transportation/airline services, industrial catering services, etc.)
Lays was a pioneer in recognizing the importance of advertising, becoming the first snack food manufacturer to hire a celebrity ambassador, Bert Lahr, for a television ad in 1944 Since then, Lay's has consistently utilized brand ambassadors, keeping its products associated with celebrity culture.
The use of celebrities in the campaign has significantly increased sales because consumers cannot help but buy the product because it 1s so attractive
Lays has successfully established itself as a prominent brand through strategic marketing tactics, including enticing free samples of new flavors and eye-catching displays in retail locations Their fresh chips manufacturing equipment in organizational canteens further enhances brand visibility Lays engages consumers across multiple platforms, advertising through TV, radio, print, online, outdoor, and cinema, ensuring widespread recognition and appeal.
* ACompany - The lack of nutrients and high
- Reliable parent company | fat, cholesterol, and carbohydrates levels
1n potato chips can lead to weight gain It may cause obesity in some severe cases
- Lay’s successfully trademarked | 1n instance, Mozaffarian et al (2011)
Foods high in refined carbohydrates, such as certain potato products, are linked to weight gain due to their low sugar and high starch content.
- In the 'Best Places To Work in the strongest associations with weight gain”
Foods came in at number nine, according to the Anphabe community and market research organization
-Because of their availability, affordability, and convenience, potato chips are regarded as a savory snack that can satisfy consumers of all income levels -The innovation of Lay's is to
20 use cutting-edge equipment to produce healthier and more environmentally friendly goods
-Lay's snacks are currently available in Vietnam in two _ lines,
Wavy and Classic, with a total of ten varieties
-Lay's makes its products widely available and distributed Lay's currently holds 7.7% of the market for savory snacks in Vietnam
-Vietnamese people, particularly in areas where COVID-19 is endemic, have a tendency to stock up on dairy products, packaged foods, and personal care items
-The idea that reputable businesses may provide goods of high quality
-In 2023, the Snack Food segment will generate $5.81 billion in revenue The market is anticipated to expand at 8.92% yearly (CAGR 2023-
- By volume, the snack food market 1s anticipated to expand by
Threat -The same pricing range offered by rival businesses Lays is a tiny packet for 6.000 VND Oishi's price ranges from 3.000 to 5.000 VND, whereas Ostar's is between 5.000 and 6.000 VND
-The growing, public consciousness of nutritional and health information ‘Artificial components’ are viewed negatively and negatively impacting health, and consumers are Increasingly seeking natural and clean goods
- In the snack food market, the average volume per person is anticipated to reach 8.81 kg in 2023
- The likelihood for exploding sales during national holidays including
Tet and the Mid Autumn Festival in
Lay's is a leading brand in the packaged snack industry, known for its innovative technology that delivers tasty potato chips at competitive prices However, following its merger with Poca in late 2019, the brand faced challenges in product promotion due to the COVID pandemic Additionally, Lay's must address environmental concerns related to packaging, which can be mitigated through a robust recycling initiative By adopting non-roasted technologies and incorporating natural flavors, Lay's can better cater to health-conscious consumers moving forward.
The Editors of Encyclopaedia Britannica (1998, July 20) PepsiCo.Inc, Encyclopedia Britannica https://www.britannica.com/topic/PepsiCo-Inc/
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Nam, Chỉ cục Dân số
Giả hóa dân số: Nhìn từ thế giới đến Việt Nam - DÂN SỐ KẼ HOẠCH HOÁ
GIA DINH (dansobp.gov.vn)
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Thông cáo báo chí về tỉnh hình kinh tế — xã hội quý IV và nam 2022 — General Statistics Office of Vietnam (gso.gov.vn)
Cam Tu (2023, January 1) 2022 nhin lai: GDP cao ky luc va diém sang kinh tế Việt Nam, Báo Thanh niên nam-1851537768.htm/
Ministry of Labour Vietnam (2022) Minimum Wages in Vietnam in 2022, Trading Economics https://tradingeconomics.com/vietnam/minimum-wages/
Thu Ha (2023, February 15) Ngwoi Viet chi 285 USD đề mua sắm online năm
2022, Báo Pháp luật https://plo.vn/nguoi-viet-chi-285-usd-de-mua-sam-online-trong-nam-2022- post719952.amp/
9) Minh Phương (2019, December 12) Cốt giảm thuế quan với các mặt hàng theo hiệp định thương mại tự do, Báo điện tử Đảng Cộng sản Việt Nam https:/daneconssan.vn/kinh-te/cat-ứIam-thue-quan-voi-cac-mat-hang-theo- hiep-dinh-thuong-mai-tu-do-544787.html/
10) Tạp chí Tài chính điện tử (2023, January 8) Ban hành các nghị định thực thi cam kết cắt giảm thuế xuất khẩu tu đãi, thuế nhập khẩu ưu đãi đặc biệt, Trung tâm WTO Việt Nam https://trungtamwto.vn/chuyen-de/2249 | -ban-hanh-cac-nghi-dinh-thuc-thi- cam-ket-cat-p1am-thue-xuat-khau-uu-dai-thue-nhap-khau-uu-dai-dac-biet/
11) Vũ Khuê (2022, October 24) 7⁄‡ rường đồ ăn nhẹ Uiệt Nam tăng trưởng nhanh nhất châu Á, VnEconomy https://vneconomy vn/thi-truong-do-an-nhe-viet-nam-tang-truong-nhanh-nhat- chau-a/
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Thị trường bánh kẹo Việt: cuộc đua ngọt ngào' của những người cũ - Tap chi Kinh tế Sài Gòn (thesaigontimes.vn)
13) Happiness Saigon (2021, August 30) AD STARS Awards 2021: Chién dich
Lay's Crispy Subtitles gianh giai Grand Prix, Brands Vietnam https://www.brandsvietnam.com/congdong/topic/3 1997 1-AD-STARS -Awards-
202 1-Chien-dich-Lay-s-Crispy-Subtitles-cua-Happiness-Saigon-gianh-giai- Grand-Prix/
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Metric https://metric.vn/snack-lays/
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