Proposal for a Beer Club opening in Hochiminh City Demand
- The Vietnam beer market volume is the third biggest in Asia, (after China and Japan), up from 8th position in 2004.
- Vietnamese drinkers put down 2.6 billion liters of beer in 2011, ranking first in the Southeast Asian region, followed by Thailand and the Philippines, according to the global market research company Euro Monitor International.
- Beer holds 98% volume share of the total official alcoholic drinks industry in Vietnam.
- Beer worth >89% of the total official alcoholic drinks market value and growing.
- The beer market has a historical growth rate of 9 – 11% & forecast to grow at 12 – 15% until 2015 and 8% 2016-25.
- The population of “primary drinkers” (20 – 40 year olds) forecast to grow by 5%, equivalent to 1.7 million additional consumers, by 2015.
- Beer production focused around population centres in South-East, Red River Delta & central region.
- Increasing investment, both domestic & foreign.
- Beer is status – Westernization just keeps on advancing!
Services offered
In recent years, many more formal restaurants have been built to serve the high and middle class customers with more beer options. They mostly offer customers diverse kinds of beer bottles and cans, along with fresh beer, draught beer in small keg (2l) and imported beer from countries such as Germany, Czech or Australia. These places are cleaner than the sidewalk ones, but the price is often 15 -20% higher.
Plus, you will hear much less noise and cheers than the street ones.
Opportunity
The middle class prefer more and more to drink differently with the so called labor community. Also their wish to learn more about the culture and the taste of foreign beer contribute a strong growth for this sector.
Therefore the Vietnam beer market structure is changing. The low-end is contracting and premium is growing. This is due to a number of factors such as:
· Excise rationalisation post WTO accession, including Increased excise on Bia Hoi
· Rising consumer incomes beginning to erode consumer price sensitivity
· If beer is status, then why be seen to drink cheap?
Recently foreign brewers are establishing a stronger presence and marketing techniques are improving.
Therefore the understanding of these demands both in quality as well as in price is a very important factor to be successful.
Assumptions
• Project's period: 5 years. Working day: 361 days per year
• Low season: March -June; 60 client/day
• High season: Jan. –Feb. and July -October; 100 clients/day
• Peak season: November –December; 130 clients/day
• Location: Ngo Duc Ke street, at the heart of district 1, has 2 floors with each 12.5m wide and 13.5m depth. 8’000 USD/month
• Inventory turnover muss exceed 50, with product being purchased and sold often within the week
• Food costs must be kept below 32%, beverage costs below 21%.
• All systems are computer based that allow for accurate off-premises control of all aspects of food
• Management's background in corporate finance indicates understanding of the importance of these control systems.
Financial Data • Capital investment: 235'000 USD
• IRR: 40,8%
• NPV: 255'264 USD
• Payback: 2.32 year Our Company
With our strongly experience in business administration, investment management consulting, risk assessment, plus the intensive and credible contacts with our partners in the area of drinks industry, the Investment and Financial Management INVFIMA will accompany the investor during the investment process and assure the project management as well. |