French culture is never far from the surface in Vietnam, whose nightlife capital Ho Chi Minh City (HCMC) is trading up from baguettes to designer handbags. Wine is also gaining devotees among Saigon’s small but growing middle class.
Drinking alcohol has always been an acceptable custom in HCMC and alcohol is one of the fastest-growing sectors in the food and beverage market. Vietnam is Asia’s third largest market for beer, behind Japan and China.
But Saigon’s women and young adults are switching on to wine and consumption is creeping up. Improved living standards, increased spending power, availability, and wine’s purported health benefits saw imports grow 2.3% in 2017 to nearly 1.3m 9L cases ($2.8m retail), according to IWSR Drinks Market Analysis. Chilean wine is most popular followed closely by France, then Australia, Italy and the USA. Despite HCMC’s hot climate, red wine is preferred. Sparkling is a small, but growing category, with Prosecco faring better than Champagne thanks to its price and palate.
As drinking gains lifestyle status, there is an element of premiumisation present in Ho Chi Minh City, most evident in beer, with sales of craft beer sky-rocketing. After beer comes spirits. “Spirits and cocktails are the real nightlife drivers,” says WSET educator, Elena Parkhimovich from CHM Wine School. Gastro bars like Racha Room, Layla, Xu Saigon, Qui Lounge, and Social Club Rooftop Bar are driving drinks culture, educating locals about trends, and inspiring them to train and work in cool bars.
The biggest potential market for wine is the under-30s, Gallet believes. Vietnam’s population is projected to reach 100m by 2020, with a median age of 30 . “Wine is increasingly being seen as a cool social status thing,” he observes.
Due to its cost, wine is assuredly a luxury product. The average HORECA price—where Saigoners consume most of their wine—is in the premium (VND500,000+) category. Compounding cost is Vietnam’s difficult regulatory environment, infamously one of South East Asia’s highest tax structures for alcohol, industry experts divulged. Many countries seek customs relief and improved trade relations: the 2011 Vietnam-Chile Free Trade Agreement (FTA) reduced Chile’s customs duties; the EU is working towards its own FTA; and Australia and New Zealand hope Vietnam’s eventual ratification of the Trans-Pacific Partnership will reduce their wine tariffs.
Despite wine’s high cost, price plays an important role in consumer decisions, up there with country, grape variety, and recommendations from salespeople. Critics scores and Vivino, while consulted by some, are not dominant in decision-making, advises Parkhimovich.
Do Duy Than, business director at Oriental Saigon Group, says Bordeaux blends are his restaurants’ best-sellers: “Branding is a top consideration for Vietnamese wine drinkers; they will drink wines they know. The more premium a bottle looks, the better,” he deduces.
Ipsos UU research, quoted by Dezan Shira & Associates, found people in HCMC are easy-going and willing to try new brands. Wine bars fuel drinkers’ enthusiasm by offering tastings, wine dinners, and events. Venues like Cork & Bottle, Wine Embassy, La Cave de Saigon, Brix Wine Bar, Le Corto, Soi & Meo Taproom, and Sofia Wine Bar help drive wine culture.
“Education is the key,” Huy Nguyen Khac, training and event supervisor at The Warehouse and prize-winning sommelier, told AsiaLife Magazine. Translating wine terms is like teaching Vietnamese people a whole new language, he acknowledged.
Women are more receptive to wine learning, believes Francois Carteau, general director at Wine Embassy, who told Forbes that women are interested in technical wine appreciation, while men prefer the social aspect of tastings.
The job of promoting wine falls on the trade due to a countrywide ban on advertising drinks above 15% ABV. The gatekeepers of the trade—F&B directors, outlet managers, bar owners—all drive wine culture with strong WBTG lists and happy hour offerings, Gallet claims, while importers drive brand power, “They don’t sell Italian, they sell Gaja.”
Importers and Retailers
Vietnam has around 200 wine distributors of varying portfolio size, with the number capped at 249 until 2025, and 264 until 2035, based on Vietnam’s population size . Distribution licenses were recently relaxed to cover the whole country, a move that should boost imports. Previously they restricted distributors to just six provinces.
Major importer The Warehouse, founded by industry pioneer Youri Korsakoff (who began at La Cave in 1992), and now under the umbrella of Annam Group, has stores in Vietnam, Cambodia, and Myanmar. The company’s distribution business came first in 2001, followed two years later by its first store in HCMC. Local and expatriate sales staff cater to both local and expat markets.
Celliers d’Asie, which operates Red Apron Fine Wine & Spirits stores, has a wide retail network, with 17 stores across the country. As a WSET APP, Celliers is helping advance wine education through its schools in HCMC, Hanoi, Danang, and Phu Quoc. The company is headquartered in Hanoi and employs 300 mainly-French employees. “Cabernet is the most popular variety in Vietnam followed by merlot—anything with structure and less sucrocity,” said Celliers’ co-founder Sylvan Bournigault.
Tan Khoa has a large portfolio of wines, spirits, and drink brands. Gallet, who joined the company in 2011, has helped grow the HCMC-headquartered company to 250 people across 11 branches, including its Bacchus Corner Wine & Spirit Shops. Chilean brand Vina San Pedro 1865 is the company’s best-seller, which helps finance its smaller allocations of champagne and riesling. Gallet says red is undoubtedly king in Vietnam, but sees white growth as a huge opportunity. “Our riesling market has expanded remarkably in the past five years,” he said.
Da Loc Fine Wines & Spirits supplies a sizable portfolio of entry-level Chilean and French wines to wholesalers, hotels, restaurants, wine stores, and supermarkets, as well as operating its own showroom.
Malthop is a fast-growing importer that wholesales and operates Wine Cellar stores in key cities. Duc Bao Truong at Malthop is actively building business by signing agencies and opening stores. The company’s Italian portfolio is strong, and Chile and Burgundy wines are among its top sellers, says Malthop’s director brand Riedel, Nguyen Thanh Dung. Deputy Director in charge of Marketing, Events and Wine Trainings for MALTHOP.
Fine Wine complements its portfolio of popular wine brands with wine storage and serving accessories by Riedel, Vinturi, Coravin, and Vintec. The company concentrates on distribution from its HCMC headquarters, with a showroom each in HCMC and Hanoi.
Moet Hennessy imports premium champagne, sparkling, and popular still wines into Vietnam. Pernod Ricard has a small Aussie-focused portfolio. Vincorp Wines & Spirits is a Euro-centric importer. Europe West’s Tay Au Wine pumps up the luxury-feel by supplying beautifully-boxed gift wines from Chile, Italy, and France, with select brands from the Barossa and Napa Valleys. Vinifera imports direct from wineries for Vietnam’s HORECA and retail sectors. French company Vinobeer brings mainly entry-level wines into Vietnam. DGT Elite Wines is a niche importer that represents only Rothschild Estate wineries.
Elite’s managing director Chris Thompson admits doing business in Vietnam is not always easy. “The wine market in Vietnam is challenging. Doing business here can be frustrating, but ultimately successful. We’ve experienced a roller coaster of emotions,” he admits.
Other specialists are organised around regions: So Sexy Wines is focused on boutique Spanish wines; ATC on Rhone Valley and Languedoc wines; and Thaipore imports two Australian brands.
Not all importers are focused solely on wine. Many are ‘hybrid’ wine and spirit importers, such as Bing Minh Food, which imports Label 5 Whisky and Russian Standard Vodka, alongside entry-level wine labels from France, Chile, and Argentina. Phu & Em Group initially imported beer, Chivas Regal, and Hennessy to meet demand in the local market, expanding in 1995 to add wine to its portfolio. Sola Hung-Thinh (also known as HT Wine) distributes entry-level wines from the new world. Chilean wine importer EU Consumer brings in olive oil, raisins, and beer among its imports.
Then, there are some retailers who import wine directly: MM Mega Market (formerly Metro Cash and Carry) imports on a ‘direct import basis’ to sell exclusively in its own stores. South Korean transplant Lotte Mart operates ‘Big Box’ supermarkets throughout Vietnam. Other retailers include Big C, which has more than 35 stores, Auchan, local player Vinmart, AEON, and Co-op Mart. IWSR Drinks Market Analysis attributes a rise in local incomes to the shift in local spending from corner shops to supermarkets and convenience stores.
“Sales in the Big Box retail channel tend to be dominated by affordable wines and are especially strong around the Tet Chinese New Year gifting season,” Thompson advises. Vietnam’s local wine market is largely a gifting one, Celliers’ Bourginault concurs. “It will never be a household product, but as a luxury it is in high demand.” Euromonitor confirms that sales of wine peak at the end of the year when Vietnamese people purchase gifts.
Online sales and marketing have improved accessibility in many Asian markets, but while Vietnamese people love to purchase certain items online, such as groceries and overseas fashions, online wine sales fall into a legal grey area, stemming the level of excitement in wine e-commerce. There are even limits on what information consumers can find online. Some importers and retailers list their wines but cannot list prices due to the ban on advertising drinks above 15% ABV.
“Online alcohol sales have traditionally been a small segment due to consumer purchasing behavior in Vietnam and also some ambiguity over the legal aspects,” Thompson explains. There are glimmers of potential, though. “There is growth in e-commerce, apps, and mobile device use across a number of categories. It seems inevitable that wine sales in the e-commerce channel will eventually increase,” he adds.
Australian wine importer Rada Vietnam has had an impact in this channel via its ilovewines.vn platform. Thompson believes it’s only a matter of time before others follow suit.
Some food delivery operators include wine pickups as part of their online ordering service. Customers can order takeaway food and the driver will pick up a bottle of wine on their way.
“The young generation, especially women, love online shopping, so there is a lot of potential for wine in the online space,” foresees Gallet.
Outreach & Events
For the size of the market, HCMC has a healthy number of wine fairs and tasting events. Bordeaux Rendez-Vous, organised by Than Khao, is held annually at the Caravelle Hotel and features more than a dozen Grand Cru’s, trade tastings, a gala dinner, and auctions. The Sheraton Saigon hosts Celliers d’Asie’s Wine of the World Festival, which welcomes 1,500 visitors in eight cities for 70 wine dinners and tastings in November.
Trade commissions and consulates from Italy and Portugal are also active in the education and tasting space, Parkhimovich states. “There are country-specific events such as the annual Taste of Australia and New Zealand Food & Wine Show, too.”
Wine society Commanderie de Bordeaux has a young Saigon Chapter with a growing number of Vietnamese inductees. The society holds quarterly tasting dinners at the Park Hyatt Saigon, some of which boast personal appearances by illustrious Bordelais, such as Hubert de Bouard.
Media & Influencers
While a small group, wine columnists wield influence in Ho Chi Minh City’s little wine world. Alfredo de la Casa, author of Vietnamese Food and Wine Pairing, writes for ‘Oi Magazine’ and launched discoverspanishwines.com to educate Vietnamese drinkers about wines from Spain. Elite’s Chris Thompson is guest editor-at-large for ‘Harper’s Bazaar’. Jim Cawood, Australian wine importer and restaurateur, writes a column for ‘Word Magazine’. Cawood’s restaurant Lubu was the training ground for award-winning sommeliers Huy Nguyen Khac and “Elvis” Nguyen Thanh Tuyen.
The Saigon Sommeliers Group was established earlier this year. The group aims to have a positive influence on HCMC’s wine scene by conducting wine training and tastings and sharing market knowledge among sommeliers and wine lovers. Malthop’s Nguyen Thanh Dung is a founding member.
Guided by expert voices and shaped by market forces, Vietnamese people will integrate wine culture in their own way, tailoring the experience to their enjoyment. But the wine market might undergo some adaptation to meet Saigon’s needs. Take Vietnamese coffee for instance, which is served strong, cold, and sweetened with condensed milk—a world away from France’s hot, milky café au lait!