Condiments

Fish Sauce

Overview

Fish sauce, a condiment derived from fermented anchovies, is a staple Vietnamese consumer product. In 2012, the fish sauce market in Vietnam is expected to reach approximately US$368 million. 

The Vietnamese fish sauce market contains many small, unbranded local producers whose products are typically sold in wet markets (traditional open food markets commonly found all over Vietnam) at low price points. With the increase in the disposable income, the market has shifted significantly to branded segment, thereby benefiting Masan. 

Fish sauce market value data (2007 - 2016F)

Source: Euromonitor as of May 2012

Growth Drivers

Vietnam’s branded fish sauce market is expected to continue to grow steadily in coming years due to a number of market trends, including:

• Demand for quality products - Consumers are more willing to pay for quality and safety, and have therefore shifted toward premium branded fish sauce products. The concern is mainly driven by a series of recent food safety scandals; in 2007 some local producers were found guilty of adding urea, a toxic chemical, to artificially raise the protein content of their fish sauce.
• Increase in product offerings - Fish sauce manufacturers have adapted to the increasingly sophisticated demands of consumers in Vietnam, offering new products, varying price points and different bottle sizes to appeal to a wider customer base.
• Room for further penetration - Vietnam’s consumption per capita of fish sauce is estimated to be lower than that of other Southeast Asian countries, mainly Thailand, indicating potential for further growth.
• Changing consumer behavior - Vietnamese consumers are increasingly using fish sauce not only as a dipping agent, but also as a seasoning ingredient in cooking. Consumers are also looking for greater convenience and value add.

Competition

Driven by Masan Consumer’s aggressive advertizing and marketing strategies, the fish sauce market has become highly organized over the least 3-4 years. Major food manufacturers such as Masan Consumer, Hung Thinh Co Ltd, Acecook Vietnam, and Lien Thanh Co Ltd successfully captured market share of 65.3%, 4.6%, 2.6%, and 2.1%, respectively, in 2010. In 2010, the top five brands together accounted for 76.6% of the total fish sauce retail market in Vietnam.