Tuesday, November 5, 2024 2:19:09 AM - Markets closed
VN-INDEX 1,244.71 -10.18/-0.81%
HNX-INDEX 224.45 -0.96/-0.43%
UPCOM-INDEX 91.61 -0.35/-0.38%
Great growth potential for chilled meat market
vietnamnews - 10/29/2024 1:39:40 PM
 (0 ratings. You must sign in to rate.)

RongViet Securities Corporation (VDSC) said that the value of Vietnam's meat market recorded a compound annual growth rate (CAGR) of 4.4 per cent in the 2018-2023 period.

The chilled pork processing line of Masan Meatlife's factory in Ha Nam Province. — VNA/VNS Photo

The speed of the development of modern supermarkets along with the ability to spread the benefits of chilled meat to the public's consumption awareness, are key to unlocking long-term market potential, corresponding to investment opportunities for stocks in the industry.
 
In a recent report on the outlook for Vietnam's chilled meat market, RongViet Securities Corporation (VDSC) said that the value of Vietnam's meat market recorded a compound annual growth rate (CAGR) of 4.4 per cent in the 2018-2023 period, mainly driven by beef, goat, and chicken.
 
This is due to higher awareness of health and the trend of exercising and limiting fatty and cholesterol-rich foods.
 
For the period 2024-28, the analysis unit believes that the beef and goat meat market will continue to play its leading role when per capita consumption is not high, accompanied by tourism recovery with many tourists from countries with culinary cultures more closely associated with these two types of meat.
 
Meanwhile, pork or poultry has reached the saturation threshold in per capita consumption when compared to countries in the region with similar culinary cultures such as China, Thailand, Philippines, Laos and Cambodia.
 
VDSC report cites Euromonitor's research that the meat market's growth will slow down with a low CAGR of 4.1 per cent for the 2024 - 28 period because the growth in consumption of new types of meat such as beef and goat is not enough to compensate for the saturation in consumption of pork and poultry - the main consumption products in Vietnam.
 
Despite the low market growth potential mentioned above, VDSC still observes a wave of new entrants/increased investment in the meat market from major players such as Vissan (VSN), MeatDeli (Masan MEATLife, MML), Hoàng Anh Gia Lai (HAG), Hòa Phát, CP, and Vilico.
 
This comes from the potential for shifting consumption from hot meat to chilled meat, packaged by reputable units in the long term.
 
More specifically, hot meat is mainly sold in markets, of unknown origin, while chilled meat is packaged and produced by reputable units sold in supermarket chains.
 
The growth of modern supermarket channels compared to traditional markets will promote the expansion of the chilled meat industry.
 
In addition, consumer awareness is increasing as many see chilled meat as being healthier, with a clearer origin than hot meat.
 
According to Euromonitor, the proportion of chilled meat consumption in Vietnam is low - reaching approximately 9 per cent by 2023, compared to developed countries such as China, reaching about 40 per cent by 2017.
 
However, VDSC has found that the market still faces bottlenecks that prevent great potential from being realised.
 
First is the habit of consuming hot meat associated with long-standing traditional markets.
 
Many users (especially Gen X) still maintain the habit of buying hot meat, which is meat that is not preserved by cooling equipment, sold at all market stalls.
 
The second is the selling price. Chilled meat developers in Vietnam have to maintain a cumbersome cost structure in operating production plants, importing feed and breeding costs to the storage system, packaging and discounting at modern retail points.
 
Therefore, the output selling price is often higher than the market price to ensure profit.
 
In addition, the fierce competition in the chilled meat market while the scale of the pie is not large enough has also caused businesses to fall into a spiral of low revenue and thin profits in recent years.
 
Investors also need to pay attention to the development of market share of supermarket systems related to these manufacturers such as Co.op Mart (Vissan), Bach Hoa Xanh, Go!, Lan Chi (CP, G), Winmart (MML) for investment decisions; due to fierce competition, a meat brand is often only distributed in certain supermarket chains that they develop themselves.
 
VDSC report further notes that businesses that purely sell chilled meat such as MML or VSN often had higher gross profit margins than businesses that sell wholesale pork such as BAF and DBC because the cost structure of packaged chilled meat at supermarkets is higher than distributing to small businesses, for example, staff costs and sales support. — VNS
 
Read original article here
Newer News
04/11 Numerous US businesses set to arrive in HCM City to implement signed agreements
04/11 Foxconn to invest US$80 million in Bắc Giang for chip manufacturing expansion
04/11 Rice exports likely to set new record in 2024
04/11 VN among the top three ASEAN countries in term of industrial competitiveness
04/11 How the US election result can impact Vietnam's exports
01/11 Vietnam develops 'purely Vietnamese' generative AI
01/11 Ministry of Finance deploys pilot project for smart border gates
01/11 Vietnam poised to become the third-largest data centre market in ASEAN
31/10 Surging rice import is business as usual: MARD
31/10 US receives request for anti-dumping probe into Vietnamese pharmaceutical capsules
Older News
29/10 Coffee price hikes push export revenue up
29/10 Hanoi to organise two big exhibitions to promote supporting industry in 2025
29/10 PM urges Dubai Int’l Financial Centre to help Vietnam develop financial services
29/10 Amended chemical law reduces administrative procedures
28/10 Vietnam remains Singapore's 5th largest aquatic product supplier
28/10 Circular economy a top priority for VN: EuroCham's workshop
28/10 Bac Ninh welcomes a new industrial real estate project in 2024
28/10 HCM City seeks to smoothe cross-border e-commerce
25/10 UK commits to be partner of Việt Nam in energy transition
25/10 Experts gather to chart course for Việt Nam’s 2045 high-income status
 
Newsletter Signup
Top Stories
VCCI recommends mineral mining rights be granted through auction and bidding
Central bank works to raise interbank rates and ease forex market
Inflation a concern following salary increases
National Council for Sustainable Development established
Việt Nam, Cambodia look forward to $20 billion trade
Market Update
Last updated at 3:05:01 PM
VN-INDEX 1,244.71 -10.18/-0.81%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Portfolio
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.