Condiments

Chili Sauce

Overview

Vietnam’s chili sauce market is underpenetrated in comparison to other condiments such as fish sauce and soya sauce. Until recently, chili sauce was primarily utilized as a dipping agent, but it is increasingly becoming a cooking aid. The market has also seen a shift in consumer behavior from the use of fresh chili to branded chili sauce due to widespread availability, stronger demand for convenience and health concerns. By 2013, the retail value of chili sauce in Vietnam is expected to reach approximately VND558 billion.

Chili sauce market sales and volume data (2007-2017F)

Growth Prospects

The following trends have emerged over the past few years and are likely to continue to drive retail sales of chili sauce:

• Growth of fast food restaurants - Traditionally, chili sauce was a dipping sauce for dried seafood in Southern Vietnam, and added to rice and noodles in the North. The introduction of chili sauce in quick service restaurants such as KFC, Lotteria and Pizza Hut has influenced consumer tastes, driving chili sauce consumption.
• Shifts in consumer behavior - Aggressive advertising and innovative packaging have made consumers more receptive to chili sauce. The progressive substituting of chili sauce for fresh chili has also contributed to the steady growth in consumption.
• Health and safety concerns - Increased health concerns in food production and consumption, Vietnamese consumers began switching to branded chili sauces. This trend is expected to continue as consumers become more brand-conscious and wary about food safety.
• Product Innovation - In response to increasing demand, producers have introduced chili sauce brands with added benefits, such as Masan’s Chin-su chili sauce, which is fortified with Vitamin A. "Sweet and sour” chili sauces, and sauces blended with other ingredients such as garlic, plum and tamarind are also capturing small market shares. The entry of new products is expected to continue to stimulate consumer interest in branded chili sauce.

Competition

The leading companies in the chili sauce market are Masan Consumer, Cholimex, , Trung Thanh and Nam Duong. The five leading companies are all domestic Vietnamese companies; foreign brands, such as Heinz, Del Monte and Remia are imported into Vietnam but remain relatively small players due to higher price points and consumer local taste preferences.