Vietnamese beer culture is about to get even more interesting. With the announcement that the two largest state-run beverage companies, Hanoi’s Habeco (Hanoi Alcohol Beer and Beverage Corporation) and Ho Chi Minh City’s Sabeco, will be selling off the majority of their market shares, a series of multinational breweries, among them Carlsberg, Heineken and Anheuser-Busch are lining up to stake a claim in the lucrative Vietnamese beer drinking market.
Vietnam has always had a strong culture of beer drinking. But with the population experiencing a surge in income, the increase of disposable income is immediately reflected in the country’s social life. Annual beer sales in Vietnam have been rising steadily for over a decade. Currently the country ranks third in Asia for overall beer consumption, bested only by South Korea and Japan. 2017 saw Vietnam consume over 4 billion litres of ale, which is a remarkable 41% rise from 2010.
Habeco and Sabeco’s total combined net worth is valued at over US$6 billion, with Sabeco earning nearly five times that of its northern cousin. They are also one of the few major brewing companies remaining in the world which are not already controlled by an international investor, making the two beverage powerhouses highly sought after.
Dutch beer giants, Heineken, acquired 5% of Sabeco shares in 2008, while the Danish owned, Carlsberg has maintained 17% of holdings in Habeco since 2009. Currently Carlsberg reserves priority purchasing rights to 60% of Habeco shares when the state finally plans to make them public.
Putting numbers aside, it’s easy to see why Vietnam ranks so predominantly in beer sales. On any given weekend, Hanoi’s famous bia hoi corner from Luong Ngoc Quyen to Ta Hien and Saigon’s Bui Vien are awash with local and foreign beer companies advertising their presence. They pander to the crowded mix of locals, expats and tourists with street advertisements, live music events and promotional girls wearing dresses sporting logos for Heineken, Carlsberg, Tiger and Sapporo. With such a crowded marketplace, is there room for more?
Enter Craft Beer
The inception of Vietnamese craft beer in the American format can be dated officially as Jan. 2, 2015. The honour goes to two Americans, John Reid and Alex Violette, when the pair opened the Pasteur Street Brewing Company in Ho Chi Minh City. The Pasteur Street Brewing Company may have the distinction of being Vietnam’s first craft brewery, but since then, the floodgates have opened, as other trendy microbreweries, with names such as Fuzzy Logic, Rooster Beers and Heart of Darkness have begun gaining momentum in the country. There is even a Pho Essence craft beer, which tastes exactly as it sounds.
Hanoi was quick to follow Saigon’s lead. First, with Barett microbrewery, followed by Furbrew Craft Beer, which now holds two locations in the Westlake area of Hanoi. Furbrew’s co-founder Thomas Bilgram, a native of Denmark, along with his Vietnamese partner Phan Thanh Trung currently offer over 20 different flavours of craft since opening in 2016.
But are the Vietnamese embracing craft beer, with a snifter of a hoppy IPA on average costing upwards of 10 to 15 times the price of a glass of bia hoi?
“It’s a lot of foreigners on a weekend,” Thomas says. “On weekdays we have a more equal distribution. I’m quite optimistic about craft beer being open to the Vietnamese market. I always thought, and rightfully so, that Vietnamese people don’t mind spending money on drinking.”
Survival of the Cheapest
With bia hoi, bottles and now craft, choices for beer in Vietnam hit on all price points, making it possible for all types to coexist. Bia hoi also has its devoted loyalists.
“I love bia hoi,” Thomas says enthusiastically. “We are not trying to compete with that market. I think good bia hoi beer is the best value for the money of any beer in the world.”
At VND5,000 for a glass of bia hoi, it is not always easy to coax customers away from Vietnam’s traditional draft. Translated as “fresh beer” or “air beer” this very light (3% alcohol) golden lager is cheaper than water.
With that in mind, the draft has also long been subject to rumours about its quality, whether it’s for cleanliness or for reported toxins found in the beer itself. It also doesn’t help matters that established brands Heineken, Tiger, Tuborg and Sapporo have all opened breweries in Vietnam, driving the prices of their own products down substantially.
Despite all of this, bia hoi still has managed to survive. Partly due to staying true to its original formula, which grew in popularity during the 1950s, shortly after the authorities restricted households from producing their own home-brewed alcohol. Bia hoi became the cheap and legal alternative.
We asked a table of office workers sitting at the Bia Hoi Hanoi Lien Doan (212 Hao Nam, Dong Da, Hanoi) what their thoughts were on bia hoi’s bad press.
“This is our history,” Cuong, 36, explains. “The rumours [of the beer’s quality] are false. I don’t get headaches. Maybe I’ve been drinking it so much, I have become immune,” he laughs.
Cuong and his colleagues often frequent Bia Hoi Lien Doan after work. I asked him further about his thoughts on craft beer.
“I have not tried it. I don’t have to… because I know that bia hoi beer is the best. Bottled beers are full of preservatives. [Bia hoi beer] is the freshest and purest you can buy. Once the beer leaves the brewery, it must be finished the same day, because it will spoil in 24 hours, because it has no preservatives.”
Most of the bia hoi draft beer served throughout Hanoi is brewed and shipped daily from the large Habeco brewery on Hoang Hoa Tham. Demand is sometimes so high that the brewery often does not produce enough beer to last a night. The owner of the Bia Hoi Hanoi Lien Doan assures us of the quality of the beer he sells by showing us the serial numbers labelled on each keg, which coincides with a list kept at the brewery.
“This guarantees that the beer is not fake or watered down. There is also a test that you can perform,” he continues. “If you pour a glass of bia hoi beer, let it sit for 10 minutes. If after that time it tastes bitter, it is fake. 100 percent bia hoi beer should still be sweet-tasting in the throat.”
The décor at Bia Hoi Lien Doan looks as though it has not changed since the day it opened. Modern bar trends need not apply here. There are no droll signs proclaiming “save water, drink beer” or “free beer tomorrow”. Bia hoi is bia hoi, what you see is what you get. A world away from craft, where beers can be chosen by their ABV (alcohol content), IBU (bitterness level) and EBC (colour profile).
An Uncertain Future
It may seem that every pint of craft beer has its own tale, but the biggest and most important story for Vietnamese beer moving forward is how the divesting of Habeco/Sabeco shares will affect its drinkers.
The answer may still be unclear, but Thomas from Furbrew remains optimistic.
“It is more about what will happen backstage,” he says. “The infrastructure of suppliers might change, but I don’t think it’ll affect the actual beer, beer prices or the drinking culture here.”
Will bia hoi continue to stay as cheap or even exist at all? Will more acquisitions allow for even more diverse imported beer brands to enter Vietnam’s market? Will the balance which has made Vietnam such a popular beer drinking country stay intact?
The beer market has changed so much in this country in the past 10 years, that don’t be surprised if more changes are in the offing.