Political

Vietnam has a stable political environment, with no institutional or ethnic disputes. Therefore,
this is a very favorable condition for foreign enterprises to invest in production and business in
the Vietnamese market. Vietnam is one of Heineken's largest markets globally. However, due to
the new law in Vietnam, Heineken's share price has taken a strike, causing it to lose at least a
quarter of the share price since the beginning of the year as authorities cracked down on drink-
driving.

Vietnam - an independent country led by the Party of Vietnam which gives strategic direction
and decides on all major policy issues. Vietnam is being appreciated by international investors in
terms of a more stable and sustainable political situation than other Southeast Asian countries, so
this is an attractive factor for investors to penetrate. and develop in the Vietnamese market.

 Stability and safety in the political context are important successes to make HEINEKEN
Vietnam grow, expand its business and become the market leader in Vietnam in the beer markets
sector.
Economic
It is undeniable that Covid-19 has negatively impacted the economy of almost every industry,
including Beer one. According to Kanta (2020), with the lockdown in Vietnam and social
distance policy, the beer consumption is sharply decreasing. Specifically, when Vietnamese bars
and restaurants are closed, there was a dramatic decline in on-trade volume sales of beer, which
is 35%. In May 2019, when nobody could define what is coronavirus, people forecasted that the
usage of beer in restaurants or bars would increase 5%. Despite the decrease of the on-trade
volume sales of beer, the off-trade one experienced 17% of rising which is much higher than the
prediction (Jarred Neubronner 2020). This beer consumption does have an impact on the income
of Heineken.
As the economy recovers, the income of each household increases. This leads to higher living
standards, and therefore, people will be able to afford products such as Heineken beer. However,
the lack of international tourism and increasingly negative consumers have caused beer volume
to decline organically by 12.3%. But Heineken cooperation continues to outpace the market and
successfully apply their expansion strategy. With the solid momentum of their innovations, the
creation of Heineken Silver, Heineken 0.0, and local beer brand Bia Viet has been launched into
the Vietnam marketplace. (MarketWatch 2020).

Affected by Covid-19, not only Heineken beer consumption, the production of beer is also
affected. Heineken Vietnam needs to import malt, which is a crucial ingredient to produce beer,
from European countries. Although European countries still allow import and export, Covid-19
somehow prevents the shipment of ingredients transported to Vietnam (Jarred Neubronner 2020).
In the context of integration with the global economy, the Vietnamese market is increasingly
developing: the tax rate is the most important factor affecting transaction business, especially
income. Currently, the government tax rate on industrial food is increasing. As tax rates increase,
food prices also increase, affecting consumer demand. Therefore, it is also a challenge for
businesses to continue to comply with tax rates and maintain and expand sales.
As of August 20, 2022, the total newly registered capital, adjusted and contributed capital to buy
shares, buy capital contribution (GVMCP) of foreign investors reached nearly 16.8 billion USD,
equaling 87.7% compared to the same period last year. The period in 2021. Although newly
registered capital has not fully recovered after the interruption of anti-epidemic measures in
2021, adjusted capital and GVMCP increased by 50.7% and 3.6%, respectively. Realized capital
of foreign investment projects is estimated at 12.8 billion USD, up 10.5% over the same period
in 2021. In 2021, Heineken was the market leader of the Vietnamese beer market, holding 44.4
percent of the total market share. Sabeco, formerly the market leader in the past years, had a
market share of 34 percent that year. Heineken's product portfolio in Vietnam includes Tiger
beer, which was one of the most chosen beverage brands in urban areas that year.
Social

Vietnam’s population
 The current population of Vietnam in 2021 is more than 98.51 million people.
 Vietnam’s population increased by 922,7 thousand (+0.9%) compared to 2020
 50.1% of Vietnam’s population is female, while 49.9% of its population is male
 Vietnam's population is equivalent to 1.25% of the total world population. Vietnam ranks
number 15 in the list of countries (and dependencies) by population.
 The median age in Vietnam is 32.5 years.

Vietnam’s age structure

As of the beginning of 2022 according to our estimates Vietnam had the following population
age distribution:
In absolute figures (estimate):
 24,964,596 young people under 15 years old ( 13,071,361 males / 11,893,235 females)
 68,633,565 persons between 15 and 64 years old ( 34,252,872 males / 34,381,684
females)
 5,487,356 persons above 64 years old ( 2,102,595 males / 3,383,770 females)

The Vietnam population pyramid has an expanding type. This type of pyramid is common for
developing countries with high birth and death rates.
Cultural - Vietnamese people have a hobby of celebrating, socializing, and gathering with family
and friends. At those parties, the drink is mostly beer. Many people drink beer because of its
delicious taste, not only that, but beer also helps people become more open and approachable.
Because the alcohol in beer will help people produce hormones to increase excitement, or beer is
suitable for certain occasions. In addition, people from rural areas tend to migrate from their
hometown to bigger cities. Depending on ASIA business culture, most of business’ contract are
signed after dishes and drinks. It's how the business world operates in Vietnam. Consequently,
alcohol drinkers are rising rapidly. Beside that, Vietnam is considered the fastest growth rate of
alcohol in South East Asia, the group's major target market is male in average working age is 30
years old and its proportion for 60% of total working age population and alcohol account for
77,3% of male population in Vietnam. Especially, in the past few years, Heineken Vietnam has
launched many product lines to serve the ever-changing needs of Gen Z customers, who are 18-
24 years old. Heineken Vietnam has a different vision compared to its competitors. They
understand that this Gen Z customer will contribute a lot to the future development process.

→ Capturing this taste, Heineken has been present in Vietnam for a long time and has become
one of the top choices of beer lovers. A huge opportunity to expand in Vietnam’s market.
Technological
With society developing faster than ever before, technologies are becoming more and more
advanced. As a result, companies are forced to be innovative, agile, and adaptive to these
dynamic changes if they want to keep up with their competitors. Businesses need to apply the
latest technology into operations to boost their production and provide better products with
higher quality. The Heineken brewery in Tien Giang, Vietnam, was able to increase its
production output with Sidel's help (an experienced line design team) by installing a completely
new can line that could double the capacity of the old ones (Packaging Strategies, 2019). In
addition to this, in 2018, Heineken signed a contract with ABB, a global technology company
specializing in electrification, robotics, automation, and motion portfolio products (ABB 2020).
The company was chosen to provide power distribution systems for Heineken's new brewery in
Vung Tau, Vietnam. The expansion project of Heineken includes "one main power station and
five sub-stations for which ABB will provide 22kV medium voltage and 0.4kV low voltage
switchboards, compact substation, electric meters with digital communication which will enable
users to store real-time operational data, dry-type transformers with high efficiency and low
losses, cables and cables trays, earthing and other installation materials" 2018). The partnership
with ABB helped improve Heineken's facility by delivering reliable and efficient technologies.

Heineken claims themselves as an environmentally friendly company, they pay attention to

reduce CO2 emissions across their value chain, which contains production, packaging, logistics,
cooling, processing and agriculture (Heineken N.V, Annual Report 2019, p.128). Heineken
Vietnam is on the way to become eco-friendly as much as possible. To be specific, the managing
director of Heineken Vietnam Brewery said that Heineken will make Vung Tau brewery become
the first carbon neutral brewery in Asia and completely uses renewable and thermal energy .
Additionally, they are planning to use renewable electric energy for all their breweries in
Vietnam by next year (Alexander Koch, 2020).