Vietnam’s ice cream market: KIDO, Vinamilk, and Unilever

Nutifood’s strategic investment in KIDO Foods

On September 23, Nutifood completed its acquisition of a 51% stake in KIDO Foods. Founded in 2003, KIDO Foods has been a major player in Vietnam’s ice cream sector, with two renowned brands, Celano and Merino, and two production facilities located in Cu Chi (Ho Chi Minh City) and VSIP (Bac Ninh). According to Mr. Tran Bao Minh, Vice Chairman of Nutifood, this investment will allow Nutifood to expand its business operations.

Vietnam’s ice cream market is experiencing rapid growth, driven by shifting consumer preferences and rising incomes. A report by Credence Research released last year predicts that the market will grow at a compound annual growth rate (CAGR) of 8.72% between 2024 and 2032, reflecting an increase in ice cream consumption and market expansion.

Fierce competition among major players

The competition in the ice cream industry is intense. In 2020, a report by market research firm Euromonitor revealed that KIDO Foods held a dominant 44% market share, followed by Unilever Vietnam (11.1%) and Vinamilk (9.1%). Combined, these three companies account for roughly 64% of the market.

KIDO Foods made a significant move in 2003 by acquiring Wall’s ice cream factory from Unilever. In subsequent years, the company introduced two key brands, Merino and Celano. Currently, KIDO has three brands in the top 10: Merino (24.8% market share), Celano (17.4%), and Wel Yo (1.3%).

Unilever Vietnam, another major player, operates three leading brands: Cornetto, Paddle Pop, and Wall’s. In July of last year, Unilever made a bold entry into the premium ice cream segment with its Magnum brand, aiming to capture a larger share of this growing market. The company's strategy focuses on leveraging the rising middle class and the increasing demand for high-end products in major cities and tourist destinations.

According to Unilever Vietnam’s leadership, the premium segment presents a lucrative opportunity. "Vietnam is a rapidly developing market compared to other countries globally. With an average annual growth rate of 8% in the ice cream sector, it's only natural for more companies to enter the competition," a Unilever representative noted at the Magnum launch event in June.

Vinamilk, one of Vietnam's largest dairy companies, has not yet fully capitalized on the ice cream market. During the company’s annual meeting in 2017, CEO Mai Kieu Lien explained that the ice cream sector's annual value of VND 1 trillion is relatively small compared to Vinamilk’s core businesses. "We will focus on this sector when we see more opportunities," she said.

Despite this, Vinamilk holds nearly 10% of the market share in ice cream. Given its strong brand and established distribution network, Vinamilk’s increased focus on ice cream could intensify competition for existing players. Currently, Vinamilk offers 50 SKUs (stock-keeping units) across four brands in its ice cream portfolio.

In addition to the big three, the Vietnamese ice cream market also features smaller brands like Trang Tien (owned by One Capital Hospitality) and Thuy Ta. However, these brands hold a smaller share of the market and are typically not central to their parent companies' business strategies.

Emerging trends and market outlook

According to experts at Credence Research, the Vietnamese ice cream market will continue to see innovation in flavors, product formats, and packaging to meet evolving consumer preferences. The trend toward premium and artisanal ice creams is gaining popularity, while producers are increasingly offering healthier options, such as low-sugar and dairy-free products, to expand their customer base. Global ice cream manufacturers are placing greater emphasis on health and sustainability in their products.

Urbanization, the growth of the middle class, and rising disposable incomes are all factors that will drive further growth in the market. Major cities like Ho Chi Minh City and Hanoi dominate ice cream consumption due to their large populations and higher income levels. These urban centers are also where the most significant product innovations are taking place.

However, market expansion is not limited to major cities. Smaller towns and rural areas are also experiencing growth in ice cream consumption, thanks to rising incomes and improved retail infrastructure.

In this highly competitive market, KIDO and Vinamilk have leveraged their deep understanding of the domestic market and strong distribution networks to maintain their leadership positions. Meanwhile, international brands like Nestlé and Unilever have used their global experience to introduce innovative products that appeal to Vietnamese consumers.

Source: vietnambiz

Compiled by Vietnam Business Information