(Tiểu luận) mid – term reportinternational investmenttopic pepsis coconut water

This type ofjuice also contains a lot of protein that the body requires in the form of substituted andnon-replaced amino acids, as well as many vitamins like vitamin C and vitamin B.Mine

FOREIGN TRADE UNIVERSITY

SCHOOL OF ECONOMICS AND INTERNATIONAL

BUSINESS -*** -

MID – TERM REPORT

Nguyễn Thị Quỳnh Nga 2112550036

1.2 History of Suntory PepsiCo (PepsiCo VietNam) 141.3 CEO of Suntory PepsiCo Vietnam Beverage 2022 15

2.1.3 Product’s name: “Cocochill” coconut water 16

2.4 Unique selling point 18

3.1 Become a popular provider of a coconut drink 203.2 Change consumers’ perspectives on the brand’s image 20

4.1 Intensity of rivalry 30

8.1 Recent changes of the market for coconut water in Vietnam 358.2 Future predictions of the Market for Coconut Water in Vietnam 368.3 Factors affecting the Market for Coconut Water in Vietnam 36

8.5 Our plans to meet future demands and changes in the market 39

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5 SWOT Analysis of PepsiCo’s coconut water in Vietnam 49

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QT tại Thái Lan nal

Đầu tưquốc tế 100% (1)

23

4 IP, Patents, Copyrights, Brands 61

1.1 The organization of the company’s divisions 62

1.2.3 Partners with influencers 75

EXECUTIVE SUMMARY

1 Introduction

Coconut water is a natural beverage that is high in nutrients It contains sugarbut digestible sugars to the body (mainly glucose, fructose and sucrose) This type ofjuice also contains a lot of protein that the body requires in the form of substituted andnon-replaced amino acids, as well as many vitamins like vitamin C and vitamin B.Minerals found in coconut water include potassium, sodium, calcium, magnesium,phosphorus, iron, and copper

Having discerned the huge opportunities and fiscal perks of this market, ourteam came up with the idea of a business plan where PepsiCo invests to manufactureand launch the new product of ready-to-drink coconut water in Vietnam

2 Company’s Product

Cocochill is specifically organic coconut water for retail which is manufactured

by Pepsi in Vietnam and the supply for coconut used is domestically sourced We usebottled as well as canned packaging which is capable of keeping unchangednutritional composition compared to the original material, especially retaining thedistinctive flavor of fresh coconut water with an expected shelf life of at least fifteenmonths

3 Market Opportunity

After the COVID-19 pandemic, people are now paying more and moreattention to any diseases happening around or likely to happen, which leads toincreasing concerns about health and immunity In Vietnam, more and more peopleare paying attention to healthy diets and are aware of what plant-based foods are andhow they affect our health Customers are now more interested in products that canbetter replace carbonated drinks than just traditional soft drinks - products that oftencontain a lot of sugar or artificially fizzy drinks

Coconut- flavored beverages are increasingly popular in the market According

to scientific studies, each coconut provides about 45 calories, natural sugar, proteinand is completely fat-free It also contains many nutrients, vitamins and minerals such

as natrium, calcium, vitamin B, C Therefore, coconut water becomes an ideal source

of nutrients for everyone

4 Competition

- Competitors: Cocoxim, Vietcoco, Delta

- Entry barriers: Intensity of rivalry, Limited qualified supply, Difficulty insubstitution of soft drink, Local’s preferences

- Competitive advantages: Ownership’s global brand, Using recycle bottles

Manager

Controller Business

AnalysisManager

8 BMC (Business Model Canvas)

Key partners Key activities Value

propositions

Customerrelationships

Customersegments

- Huge andlong-establisheddistributionsystem

- High- qualityingredients

- Outstandingreputable brand

- Recyclablecarton bottle

- Mostly naturalingredients(sugar,sweetness: zero)

- Automatedmachines(vendingmachines)

- Social media,Ecommerceplatform,health events,sport events,

center,Customerservice carenumber

testing booth

- Officialbrandambassadors

- Health andfitnessenthusiasts

- HousewivesCovid-19patients

- Vaccinatedpeople

- Sponsor

orders forevents

- Media: social

grocery,restaurant,campus store,e-commerce,

+ Salaries and wages for quality

assurance, industrial engineering,

materials handling, factory

management, and equipment

maintenance personnel

+ Equipment repair parts and

supplies

+ Factory utilities

+ Depreciation on factory assets

+ Factory-related insurance and

property taxes

+ Ingredients and supplies

- Retail sales

- Licensing

- Distribution costs

- R&D

CHAPTER 1: COMPANY DESCRIPTION

1 Overview Of The Company

Suntory Pepsico Vietnam Beverage Company Limited (SPVB), 100% foreigncapital, specializes in the production of non-alcoholic beverages and wastewater Theprinciples of quality control of processes and materials begin with the standards ofSuntory Holdings Limited - one of the largest beverage groups in Japan and Pepsico -one of the leading beverage groups in the world The company's mission and vision is

to continue to strengthen and maintain a leading position in the beverage industrywhile living up to the company's values With a passionate passion to keep "QualityCommitment" and meet the increasing requirements of the market, the company hascontinuously improved the production process, expanded the factory and successfullybuilt trust of the customers In the future, SPVB aims to pursue the goal of sustainabledevelopment, bringing benefits to the company's employees and business partners aswell as contributing to the community where the company does business andoperations

1.1 Shareholders of the company

PepsiCo, Inc and Suntory Holdings Limited (Suntory) announced favorableconditions for establishing a strategic joint venture in Vietnam Under the terms of thisagreement, Suntory will contribute 51% of the total capital of the beverage jointventure while PepsiCo will contribute 49% Suntory and PepsiCo will hold keypositions in the management team of the new joint venture in Vietnam

1.2 History of Suntory PepsiCo (PepsiCo VietNam)

● 1991: International Beverage Company (IBC) was established by a jointventure between SP.Co and Marcondray - Singapore with a capital ratio50%-50% contribution

● 1994: The US lifted the embargo against Vietnam

● 1998: PI buys 97% shares, SP.Co 3% increases investment capital to 110million dollars

● 2003: Pepsi-Cola Global Investment buys the remaining 3%, changes its name

to PepsiCo Vietnam International Beverage Company More labels Brands:Aquafina, Sting, Twister, Lipton-Ice Tea

● 2005: Officially became a company with market share in the beverageVietnam's largest

1.3 CEO of Suntory PepsiCo Vietnam Beverage 2022

Jahanzeb Qayum Khan, Jahanzeb has close to 30 years of working experience

in MNCs His last 19 years in PepsiCo saw him working extensively in Asia, MiddleEast and Africa, namely Pakistan, South Africa, Nigeria, Iran and Thailand Prior tojoining SPVB, he was based in Bangkok as Vice President, Business Developmentand Transformation Asia Pacific Before the Transformation role, he was the GeneralDirector for Pakistan and Afghanistan, leading both Snacks and Beverage portfolios.From July 2019, Jahanzeb assumed the charge of CEO & General Director of SPVB.1.4 Advisors

● Representative: Angela Yang

● Position: Vice President, Corporate Finance Consultant, PwC Vietnam

● Address: 29 Le Duan street, Ben Nghe Ward, District 1, Ho Chi Minh city,Viet Nam

2 Products And Services

2.1 Overview of the product

2.1.1 Coconut water in general

Coconut water is a natural beverage that is high in nutrients It contains sugarbut digestible sugars to the body (mainly glucose, fructose and sucrose) This type ofjuice also contains a lot of protein that the body requires in the form of substituted andnon-replaced amino acids, as well as many vitamins like vitamin C and vitamin B.Minerals found in coconut water include potassium, sodium, calcium, magnesium,phosphorus, iron, and copper

2.1.2 Pepsi’s coconut water

This product is specifically Organic coconut water for retail which ismanufactured by Pepsi in Vietnam and the supply for coconut used is domesticallysourced We use carton bottled packaging by Tetra Pak and direct UHT sterilizationtechnology which is capable of keeping unchanged nutritional composition compared

to the original material, especially retaining the distinctive flavor of fresh coconutwater with an expected shelf life of at least fifteen months

2.1.3 Product’s name: “Cocochill” coconut water

It is simply the combination of the two English words “Coco” and “Chill” As

“Coco” stands for coconut in general and this fruit’s juice specifically, it will describeprecisely the main content of this product “Chill” in this situation has the informalmeaning of “relaxed”, which is quite descriptive in the direction of implying that theproduct has a laid-back style, and is a good choice when customers need somethingthat makes them feel calm or relaxed Moreover, it has the implication that byconsuming this product, customers can both stay healthy and “be chill” at the sametime Overall, this product name is comprehensible, easily pronounced and descriptivewhich can limit the situation of mispronouncing and may be utilized when applyingword-of-mouth

2.2 Background to its development

The global coconut water market was valued at US$5 billion in 2021, and isexpected to be worth US$11 72 billion in 2027 and to grow at a CAGR of 15.27%

over the period of 2022-2027 (Reportlinker.com, 2021) In the Vietnam BeveragesMarket, Euromonitor International has reported that Coconut and other plant waterscontinue to show the strongest volume growth in 2021 Moreover, according to theInternational Coconut Community (ICC), Vietnam coconut has the highest yield andquality in the world Having discerned the huge opportunities and fiscal perks of thismarket, our team came up with the idea of a business plan where PepsiCo invests tomanufacture and launch the new product of ready-to-drink coconut water in Vietnam.2.3 Benefits and features

2.3.2 Features

Packaging Tetra Top® Carton bottle; processed by direct UHT

sterilization technology on Tetra Pak packagingPackaging volume 500 ml

Ingredient 100% made from Blue siamese coconuts that have been

cultivated to meet Organic standard Free ofpreservatives, never from concentrate, no colorings.Flavour Original, Chocolate, Vanilla, Match, mixed with apple

juice, mixed with Chia seeds

● Protein (0g)

● Vitamin D (0mcg)

● Calcium (20mg)

● Potassium (630mg)Shelf life 15 months

Standards Organic (NOP/EU/Korea/ACO/JAS), Food Safety

System Certification (FSSC) 22000, BRC, Halal,Kosher

2.4 Unique selling point

This product is 100% made from Blue siamese coconut water (which isdescribed as the most delicious type of coconut water with natural, sweet flavor andleaves no sour taste after harvesting like Green siamese coconut) The supply forcoconut used in manufacturing this product comes from Vietnam, specifically fromthe central provinces of Vietnam including Ben Tre Additionally, the coconuts usedare entirely organic, grown without the use of synthetic pesticides and fertilizers,sewage sludge, GMOs or ionizing radiation,… Also, the items are available in avariety of flavors for customers to choose, ranging from original to chocolate, ormixed flavors One special thing about the variation is that Coconut water mixed withChia seed is a brand new flavor in the industry of this product The combination willbring customers the more refreshing and nutritious version of coconut water which is

super hydrating, electrolyte-dense, as well as a good source of fiber, vitamin C, andimportant minerals.

In addition, this product takes advantage of its packaging to be outstanding inthe market As processed under Tetra Pak's packaging line, the bottle is capable ofbeing recycled and turned into useful items as part of Tetra Pak's packaging line,helping to preserve the environment You should notice that this type of cartoonbottled packaging is processed under a quite new system of Tetra which is called TetraTop® This packaging is available as FSC™-certified and with a separable top whichallows recycling together with the carton sleeve Moreover, this type of packageprovides great printing possibilities that gives broad scope for creative packagedesign, so it also allows Pepsi to develop a modern look which helps the productreally stand out on the shelf

2.5 Advantages to customers

- Saving time and Convenience:

Ready-to-use drink which can easily be found in any grocery, conveniencestore or supermarket Customers don’t have to walk around to look for vendors orpavement cafes selling fresh coconut but still get the drink Moreover, they just have

to pop the bottle cap or open the can but needn’t crack the whole coconut or wait for it

to be done

- Healthy product suitable for daily use:

As mentioned above, coconut water is a very hydrating drink that containstypes of nutrients, minerals and digestible sugars that benefit the human body in manyways Even though it’s a ready-to-drink product, it is made from 100% fresh coconutand contains no preservatives, added sugars nor colorings In addition, thanks to thedirect UHT sterilization technology, the nutritional composition stays unchangedcompared to the original material

- Natural taste and a variety of flavors:

Due to the selected Blue siamese coconuts used in manufacturing this product,

it provides the naturally sweet flavors without any sour or artificial taste from

saccharin Moreover, the product is supplied in more than one flavor which can satisfythe taste of almost everyone, especially the young.

- Easy to store and long shelf life:

Thanks to the packaging technology, Pepsi’s coconut water can be stored atroom temperature for about 15 months or even more without any changes to thequality and taste of the product Moreover, it can be stockpiled for emergencies.2.6 Disadvantages/ Weaknesses

As the product is delectable, some people may drink it non-stop Overconsumption of any kind of coconut water may lead to excess consumption ofpotassium, which may cause diarrhea in some people

2.7 Future development

In order to satisfy and draw in more clients, the business will continue to work

on discovering and creating new flavors as well as utilizing cutting-edge technologies

to better protect the quality of the raw materials To better control and stabilize thesupply, it is also planned to cooperate with farmers cultivating coconuts to form anddevelop organic material areas These areas are coconut gardens whose outputs havebeen ensured in advance to be used in the manufacture of Pepsi’s coconut water

3 Long Term Aim

3.1 Become a popular provider of a coconut drink

With the high demand in healthy and organic beverages, Suntory Pepsico aims

to provide a green daily drink for all generations Together with the use of organiccoconuts and other plant-based ingredients, customers can now enjoy a delicious andfresh drink that is reminiscent of nature and homeland

3.2 Change consumers’ perspectives on the brand’s image

Suntory Pepsico has long been recognized as the leading multinationalbeverage corporation with the most popular product being Pepsi However, SuntoryPepsico is now expanding and has a wide range of food and beverages One of themain focuses of Suntory Pepsico is providing a healthy and sustainable lifestyle, that

is why Suntory Pepsico invests more in healthy consumption

4 Objectives

4.1 Economic objectives

- Increase market share: After penetrating the market then gradually increase themarket share in the healthy beverage industry: by 20% after one year

- Increase sales volume by 15% after 6 months

- Reduce overhead cost by 15% using economy of scale after 6 months.4.2 Human objectives

- Promote a diverse and inclusive workplace: Advance respect for human rights

by using Suntory Pepsico's capabilities and scale

- Support women’s economic advancement: Increase the earnings potential ofwomen to drive economic growth and increase food security

4.3 Social objectives

- Advance environmental, social and economic benefits to different communities

by promoting improved farmer livelihoods and agricultural resiliency

- Improve choices of our ingredient portfolio: Reduce added sugars, sodium andsaturated fats

- Climate change mitigation: Do our part to curb climate change by reducinggreenhouse gas (GHG) emissions across our value chain

- Create a circular future for packaging: Fundamentally change the wayconsumers interact with our packaging to deliver our vision of a world whereplastics need never become waste

5 SWOT Analysis

Strengths

- Great brand value together with

effective supply chain management

- Flavorful taste

Weaknesses

- Consumer tastes still go towards localbrands such as Ben Tre

- Shortage of raw materials

- Disadvantages of being a latecomer

- Increasing demand for high quality

coconut water products

- Export to foreign markets that Vietnam

has signed an FTA with

- The competition with domestic brands

- Brands like Pepsico have higher coststhan local brands due to internationalpolicies

5.1 Strengths

- Best beverages brand in Vietnam: Pepsico is the brand with the largest marketshare in the Vietnamese beverage market with a market share of up to 41% in2020

- Direct- Store- Delivery: PepsiCo uses direct store delivery (DSD) for its supplychain and distribution network, which ensures that independent bottlers anddistributors deliver beverages, snacks, and foods directly to retail stores DSDensures faster restocking, better in-store promotion and maximum visibility

- Iconic Youthful Brand: Pepsi’s target audience has always been a youngergeneration Pepsi has nurtured its image as an iconic youth brand Historically,many iconic ads were targeted towards pre-teens/ teens with the fun element ofsports, music, etc

- Wide range of products: Pepsi's product portfolio is more diverse and richerthan that of Coca-Cola Pepsi's position as the "comprehensive beveragecompany" is the biggest reason for its global success

- Effective Supply Chain Management: In the current highly globalizedmarketplace, businesses operate in different markets across the world to attain

cost-efficiency, which can be challenging without an effective supply chainmanagement.

- Customer Loyalty: PepsiCo has an extremely loyal customer base, particularlyamong the younger generation who love the iconic taste of the company’s softdrinks

+ Product and Consumer related: Organic products:

● Focuses on exploiting the organic coconut water market with product lines thatsay no flavors, odors or sweeteners

● The product has achieved organic certifications according to strict standards ofthe US and Europe

● The product completely retains the wonderful nutrients of fresh coconut water,has a fresh and natural taste, and provides many essential vitamins andminerals for the body such as: K, Na, Ca, Ma, P

● Stabilizing the best source of raw materials, providing consumers with qualityand healthy products

● Using the world's leading production line and the latest technology, it is safe forconsumers' health and can retain the most natural flavor of coconut

5.2 Weakness

- Products Perceived as Unhealthy: Perception is everything when it comes toconsumer products such as soft drinks and snacks When consumers think ofPepsi, they will think of a company that specializes in producing unhealthycarbonated drinks, which will negatively affect coconut water products Most

of PepsiCo’s carbonated soft drinks contain high sugar concentrates while itssnacks are excessively salted with chemical additives and flavors This is amajor weakness, particularly in the current health-conscious consumer markets

- Not very good at product demand forecasting: This will lead to a higher rate ofmissed opportunities compared to its competitors One of the reasons why theday's inventory is high compared to its competitors is that PepsiCo is not verygood at demand forecasting, this ends up keeping higher inventory bothin-house and in channel

+ Product and Consumer related:

● Consumer tastes

Consumers prefer fresh coconut products with local brands such as Ben Tre Ithas been embedded into local residents with the familiar brand and affordable pricethrough many periods of time Ben Tre brand also represents the pride of the country,

of the nation and it is suitable for many occasions when consumers in Vietnam bringout the local special drink with a local brand to foreigners, visitors from othercountries compared to a novel and international brands like PepsiCo Not to mentionthat carbonated drinks will be one of the first choices when it comes to PepsiCo, Inc.,not coconut water

● Possibility of shortage of raw materials due to influence from nature

The situation of drought and salinity intrusion is earlier and more prolongedthan in the past, it is forecasted that coconut production in the coming time willdecrease seriously

5.3 Opportunities

- General market entry:

+ Opening up sectors traditionally owned by the government

+ Government push on private international investment is expected to continue,creating opportunities for EU investors

+ “Doi Moi” policy that empowers private businesses and supports freer markets

is expected to continue

+ Vietnam is one of the countries with the fastest growing middle class in Asia It

is forecasted that by 2045, half of Vietnam's population will be in this group.Thereby creating a high demand for canned coconut water products from bigbrands like Pepsi

+ Currently, Vietnam has signed a total of 15 FTAs, facilitating the export ofcoconut water products to other countries

+ Product and Consumer Related:

● The middle class is increasingly willing to pay more for ecological and healthyfood

● A healthier lifestyle is expected to become more and more popular amongstVietnamese consumers.

● Traditional wet markets are being replaced by supermarkets, which mightincrease the need for canned and bottled products

● Vietnamese Government campaigns promote the health benefits deriving fromcoconut water consumption which in return boosts drinking of coconutproducts

5.4 Threats

- General market entry:

+ In the coming time, interest rates around the world will increase, which willcause difficulties for businesses Pepsi needs a thorough capital structurestrategy

+ The Vietnamese government has the tendency to protect their own producersand production, especially in the agriculture-related food sector, where EUproducts need to compete with local producers who enjoy favorable businessconditions, this policy is also expected to continue

+ Personal relationships are important in order to enter the Vietnamese market,

EU producers who do not pay enough attention to cultivating goodrelationships with partners and distributors may have difficulties entering themarket

+ Product and Consumer related:

● Pepsi's coconut water products may lose to Vietnamese domestic brands suchas: Cocoxim of Betrimex with a factory located in Ben Tre, CoCo Fresh ofdairy giant Vinamilk, Vietcoco of Luong Quoi Coconut Company because ofpride ethnic

● The difficulty for Pepsi is to adapt to the standards of the domestic market.However, Pepsi is facing a huge challenge Pepsi has a rather large scale, so itrequires the company to have marketing policies, appropriate solutions to copewith each condition, regulations on culture, society, economy, politics andregulations regulations of the Governments of the countries

● Standing among competitors with the advantage of national pride, Pepsi needed

a strategy to bring outstanding performance and maintain its market

CHAPTER 2: MARKET ANALYSIS

1 Target Market

Vietnamese customers have become more and more aware of the impacts ofhealthy eating on their well-being, and this trend is guaranteed to become even moremainstream in the future, when the overall living conditions and education levels ofthe nationals are both improved Hence, Pepsi’s Coconut water, with their completelyorganic ingredients, would attract a lot of potential consumers

Segment Demographic

Characteristics

PsychographicCharacteristics

Behavioralcharacteristics

Geographiccharacteristics

Active lifestyle;

sportsaficionados

- Looking forproducts that boththeir children andparents can use

suburban andurban market

- Density: Highclimate,Tropicalmonsoonclimate

weight loss

suburban andurban market

- Density: Highclimate,TropicalmonsoonclimateIII - Age: 20-30

suburban andurban market

- Density: Highclimate,Tropicalmonsoonclimate

2 Total Market Valuation

2.1 Domestic market valuation

In general, Vietnam’s food and beverage market was one of the most attractivemarkets globally (ranked 10th in Asia) in 2019 as per BMI Total sales of food andbeverage reached US$41.7 million (+ 3.8 percent YoY) in 2020 The market demandincreased as well, recording a figure of 11.6 percent between 2018-2022 and be worthUS$40 billion by 2021

While it is arguable that Vietnam is a lucrative market for alcoholic and softdrinks, healthy beverages have been witnessing a significant increase and contributingmore to total market demand, with a value sales of naturally healthy beverages rose by12% to reach US $4.9 billion in 2019 This trend is predicted to rise when Vietnameseconsumers become more health-conscious The majority of the increasing value sales

is attributed to rising consumption of tea and fruit/vegetable juices, among otherhealthy beverages

Considering the impacts of COVID19 pandemic, this trend acceleratessignificantly with nearly 50% of Gen Y and Gen Z consumers in Vietnam saying thatCOVID-19 motivated them to consume healthy food Hence, the Vietnamese marketsize of coconut water is projected to get larger at a steady growth rate in the future.2.2 International market valuation

The global coconut water market size is estimated to be worth USD 6521.5million in 2022 Asia-Pacific region acquires the largest consumption of packagedcoconut water (especially Indonesia, India, Australia and China) while Europe has thehighest market growth rate for the time being

During Covid, the health trend has recently gained even more momentum, andleading players are expanding the availability of their products globally Thus,products such as coconut water started gaining popularity in the global marketplaceowing to its several health benefits Furthermore, international health organizationssuch as WHO also encourage consumers to strengthen their immune systems toprevent COVID-19, and facilitate the demand for healthy beverages like coconutwater

According to the International Food Information Council’s 2020 Food &Health Survey findings, 54% of all consumers, and 63% of those 50+, care more aboutthe healthfulness of their food and beverage choices in 2020 than did in 2010;healthfulness is the biggest mover, more so than taste and price This is the motivationrequired for the expanding market size of coconut water for the time being and in thefuture.

2.3 Predicted market valuation in the future

According to Statista, coconut water market valuation worldwide is projected

to reach 8.3 billion U.S dollars by 2023, and the growing trend is dominant withIMARC Group expects the market to reach US$14.3 billion by 2027, exhibiting at aCAGR of 16.8% during 2022-2027 Future Market Insights also indicates that despiteavailability in various flavors, regular coconut water will remain consumer favorite,accounting for nearly one-fourth of the market

In general, health will continue to be a priority for consumers through 2030 Inthe next ten years, Mintel predicts that consumers will combine their personalmotivations for healthy living with the potential for a healthy diet Customers wouldfocus on sustainable or environmentally responsible diets including fruits, vegetables,whole grains and seeds This is a good sign for the demand for healthy beverages likeorganic coconut water in the future

The company has spent more than 20 million USD to invest in a coconut waterprocessing plant In particular, technology investment alone accounts for 40% of thetotal investment value The rest, Betrimex invests in auxiliary machinery and factoryland As a result, a coconut water processing area with a total area of 7.5 hectares inBen Tre was started by Betrimex and completed at the end of last year Although the

plant has just started operation, the plant has reached 35-40% of the total designcapacity It is expected that, one year later, Betrimex will increase the factory capacity

to 80-90%

The unique selling point of Betrimex is the use of Tetra Pak technology toincrease the longevity of product and the natural flavor without using preservatives.3.2 Vietcoco

Understanding the strict demand of the customers, Luong Quoi company isalways conscious of strictly following the operating motto "safety, quality,responsibility for sustainable development", constantly investing in advancedtechnology equipment Developed human resources and state-of-the-art productionplants with the goal of producing canned coconut water products of the highestquality Vietcoco is the pioneer in this market field with the expectation to take the topspot for gas soft drink Moreover, the company also aims to serve the demand ofdomestic and foreign countries

3.3 Delta

The product of Delta company contains many nutrients that benefit health.Coconut water is used as a popular drink in tropical countries, and is a naturalbeverage rich in nutritional value Coconut water contains a lot of protein for the body

in the form of amino acids to replace vitamin C Delta only produces coconut water as

an add-on product and sells it centrally in the North, products have so far reached out

to the domestic market, connecting with many consumers, step by step affirming thebrand of local agricultural products, increasing incomes for people

4 Entry Barrier

4.1 Intensity of rivalry

The existing companies and enterprises such as Cocoxim, Vietcoco, Delta,etc… have solidified themselves in the Vietnam market For example, Cocoxim has avariety of products with its highlight being the Organic coconut water It’s advertised

as 100% organic coconut and it has received verification from USDA standard andControl Union from the EU Moreover, they do their best to fulfill Corporate SocialResponsibility by making sure the packaging that they use are recyclable, ensuring

their ingredient source is fully organic, not using any pesticides And for Vietcoco,they also have an organic coconut water that has an average monthly sale of 3-4million/month.

4.2 Limited qualified supply

All of our three main competitors are based in Ben Tre, with Cocoxim evenbelonging to the People’s Committee of Ben Tre Province before turning into a JointStock company And the coconut from Ben Tre is of extreme good quality, as they arewhat Ben Tre is known for The province also possesses the largest share in thequantity of coconut being produced in all of Vietnam However, even with this amount

of supply, competing with all three competitors in their hometown is going to bedifficult the price of inputs could be increased tremendously as the demand for itgrows

4.3 Difficulty in substitution of soft drink

People have a tendency to be loyal to one brand when it comes to soft drinkshence it might be difficult to gain their attention In opposition, people who love tojump brands to try out different drinks are hard to retain

4.4 Local’s preferences

A recent study shows that 76% of Vietnamese prefer locally-branded products.The Ministry of Industry and Trade releases figures that show more than 90% of allgoods sold in locally-owned supermarkets, and 60% in traditional retail This isn’tspecifically coconut water but it still should be taken into account since mostVietnamese coconut water brands are all well-established

5 Competitive Advantages

5.1 Ownership’s global brand

- With the advantage of having the Pepsi name in the brand, consumers will bemore inclined to give your product a try as Pepsi has been one of the mostfamous brands in Foods & Beverages

- Pepsi is well-received in Vietnam as a lot of young people choose Pepsi’s softdrink as their go-to

- Your brand will have more reach as part of the perk of having Pepsi in thebrand.

5.2 Using recycle bottles

- An outstanding advantage of using Tetra Pak's packaging line is that thepackaging can be recycled into valuable products, contributing to the protection

of the surrounding environment After-use packaging will be collected andrecycled, and up to 50% to 55% of the pulp can be used after recycling.Products that can be recycled include stationery, business cards, pencil cases,envelopes, roofing sheets, waterproof plywood, fertilizers, etc

- The use of renewable materials, defined as natural resources that can bereplenished over time, such as wood fiber from trees or bio-based plastic fromsugarcane, plays an important role in mitigating resource scarcity and climatechange Packages made from renewable materials are not only good for theenvironment, but also offer our customers a competitive advantage

- Currently, the consumption market of dairy products and canned drinks inSoutheast Asia, South Asia, Japan, Korea, Australia and New Zealand has greatpotential, expected to grow at 5-6% annually as of 2019 Vietnam is alsoamong the countries with the highest growth in consumption of dairy productsand beverages in the world This requires that leading coconut water suppliers

in particular and beverage and dairy suppliers in general need to invest more intechnical manpower and new technology to deliver these growths

6 Benefits To Clients

With the great health benefits of coconut water, plus the tendency to choosefast, compact and nutritious drinks in modern life, coconut water products have beencanned and are being sold, preferred by many people and have strong potential forgrowth in the future

6.1 Skin beauty

Research has shown that cytokinins found in coconut water help regulate skincell growth Coconut water contains lauric acid, which can minimize the aging of skincells, balance the pH and keep the connective tissue strong, moisturizing the skin

Besides, coconut water has vitamin C, K and A, which helps to stimulate collagenproduction for plumper and healthier-looking skin Its antioxidants and hydratingproperties keep skin soft and glowing It can also be used in different facial packs toremove sun-tan This is one of the significant benefits of drinking coconut water forthe skin.

6.2 Benefit for health

● High in nutrition

Coconuts contain protein, several important minerals, and small amounts of Bvitamins However, they’re not a significant source of most other vitamins Theminerals in coconut are involved in many functions in the body Coconuts areespecially high in manganese, which is essential for bone health and the metabolism

of carbohydrates, proteins, and cholesterol

They are rich in copper and iron, which help form red blood cells, as well asselenium, an important antioxidant that protects your cells

Here are the nutrition facts for 3.5 ounces (100 grams) of raw and unsweeteneddried coconut meat:

Manganese 65% of the Daily Value

(DV)

119% of the DV

Magnesium 8% of the DV 21% of the DV

● Rapid Energy, Mineral & Water Replenishment

Thanks to its abundance of vitamins, minerals and nutrients, coconut water is agreat energy drink with significantly less sugar and sodium content compared to othersports drinks At the same time, coconut water also provides Potassium (K),Phosphorus (P), Calcium (Ca), Magnesium (Mg), helping to restore and boost yourenergy

● Reduce high blood pressure

Research has shown that people with high blood pressure often have lowerpotassium levels in the body than normal people Therefore, drinking coconut waterregularly is effective in regulating high blood pressure because it contains manyminerals Potassium and lauric acid

● Weight loss

Coconut water is rich in natural electrolytes to boost the body's metabolism.Therefore, coconut water is very useful for those who are struggling with their weightproblem

● Strengthening the digestive and immune system

Coconut water contains lauric acid when entering the body, it will convert tomonolaurin, which helps fight viruses, bacteria, intestinal worms, parasites andgastrointestinal infections

6.3 Convenience for customers

Canned organic coconut water from the world famous brand Suntory PepsiCo

is produced and distributed across the country, ensuring a supply of coconut wateravailable everywhere and at all times during the year With advanced technologies,

canned coconut water can be stored and available during the year, hence customerscan enjoy this favorable drink without depending on the season.

7 Target Company Revenue

Target revenue of Coconut water

to increasing concerns about health and immunity The second is the global anddomestic economic slowdown affecting people's income As a result, living expensesare significantly reduced, in other words, people want to spend less and save more fortheir future According to these points, consumers require a balanced and healthy diet,but at the same time must be convenient and eco-friendly Additionally, Work fromHome (WFH) is increasingly popular, making people afraid to eat out, but have lesstime to prepare for meals and want to save more

The second trend is plant-based products which dominate the food market inVietnam :

● In Vietnam, Customers are now more interested in products that can betterreplace carbonated drinks than just traditional soft drinks - products that oftencontain a lot of sugar or artificially fizzy drinks

● According to a survey by Rakuten Insight in Vietnam in November 2021, about86% of the respondents stated that they have consumed plant-based alternatives

to animal-based food products

● This also proves that coconut-flavored beverages are increasingly popular inthe market According to scientific studies, each coconut provides about 45calories, natural sugar, protein and is completely fat-free It also contains manynutrients, vitamins and minerals such as natrium, calcium, vitamin B, C

● According to research by Mirital and the juice market in Germany, up to 40%

of millennial and Gen Z consumers say they enjoy using coconut water.8.2 Future predictions of the Market for Coconut Water in VietnamCoconut water will become more and more popular because of its convenience,reasonable price and benefits Brands of coconut-flavored drinks will continue to grow

as consumers become increasingly interested in healthy foods

Consumers choose to use transparent packaging to see the product inside,rather than sealed packaging like current products

The advantage in price as well as quality will help coconut water products bewidely exported to foreign countries

8.3 Factors affecting the Market for Coconut Water in Vietnam8.3.1 Demographic factors

Health has become the major concern, accounting for 40%, which has led to aproliferation of premiumised goods According to Mirae Investment research, 62% ofVietnamese consumers consider usage of premium products to be one of the attributes

of high self-esteem

Most Vietnamese are young, the median age is 32.5 years They keep up withthe trends of food consumption in the world such as eat-clean, plant-based products,…and want to have a healthy but convenient lifestyle and save time and money.Vietnam’s expanding middle class and population of around 99.5 million havegenerated significant revenue from retail sales and consumer services After Covid-19pandemic, although consumers are trying to reduce spending due to reduced income,they are more and more aware of having to protect and improve their health, so they

are still willing to splash out to buy products of all natural origin that are good forhealth This ensures the need for a health product like coconut water when peopleworry more about health issues as they are willing to pay for their health.

Figure 1: Infographic Population, Labour

And Employment In 2021

Figure 2: Vietnam’s PopulationPyramid, 2022Health has become the major concern, accounting for 40%, which has led to aproliferation of premiumised goods According to Mirae Investment research, 62% ofVietnamese consumers consider usage of premium products to be one of the attributes

of high self-esteem

Figure 3: The Conference Board Global Consumer Confidence Report, 20188.3.2 Economic factors

Vietnam has long established itself as a favorable destination for foreigninvestors Building on Vietnam’s favorable conditions for doing business, namely itsstrategic location, stable political system, and ample workforce, Vietnam hascemented its position as a safe and stable destination for investment

Despite the pandemic, Vietnam recorded a positive GDP growth rate of 2.58percent in 2021 and now seems poised to return to its typical 6 percent annual growthrate in 2022 as the government gradually reopens the country

On April 2, 2014, the Ministry of Agriculture and Rural Development issuedDecision 639 on agricultural and rural planning in the Mekong Delta until 2020 with avision to 2030