Balancing tradition with innovation: Vietnam’s East West Brewery on its strategy to crack country’s emerging craft beer market
The brewery, which has its taproom presence in Ho Chi Minh City and Danang, said that 75% of its consumers are local, while 25% are from international markets mostly via tourism.
Founder and general manager Loc Truong said that the demand for craft beer in Vietnam was mainly driven by more well-travelled local consumers, and demand for high-quality and “good-tasting” beer among its international clientele.
Founded in 2017, it currently brews nine original craft beers, spanning traditional to seasonal products with flavours spanning fruity, vanilla, caramel to its local spin on Vietnamese coffee. They are available in Ready-To-Drink (RTD) bottles and cans, as well as tapped.
Product development: Balancing local and international demand
Loc said that its traditional four – Pale Ale, IPA, Pilsner, and Hefe – are its hero products among local consumers.
“The Vietnam [craft beer market] is still young. Instead of jumping too far from the mass beer to do crazy and interesting products, we want to focus on consumer education in the local market. If we make something unique out there, there’s really no point of comparison on the quality.”
Appealing to the more discerning taste buds of beer tourists coming from more mature markets requires a different approach, he added.
“We still have every now and then some special batches we put out that’s not huge in volume. We experiment with fruits, chocolate, and vanilla. When you get travellers from really developed markets like the US, Australia of in Europe, they usually go for something like Saigon Rose or Coffee Vanilla Porter because there’s already so many IPAs in their markets and they want something that pops out to them.”
Distribution: Bringing small-town beer to international markets
In Vietnam, its products are distributed to over 1,000 restaurants, hotels, supermarkets, and convenience stores. Within the two years, the brewery is planning to expand its experiential taproom presence in the north, south and central areas to pump its consumer education efforts across Vietnam.
Its current export markets include Taiwan and Hong Kong via distributorships. Only 2% of its revenue come from exports but it will debut in Malaysia, Singapore, and Thailand within this year.
“We will leave it to our distributor to decide on the local distribution strategy. For example, in Malaysia, you’re going to see the products in entrée, craft-centric style in premium restaurants and hotels. In our current market in Taiwan, we mainly do RTD trade in cans and bottles,” Loc added.
Loc explained that on the brewery’s end, two factors come into play when deciding on its export markets: (1) Logistical challenges with export to maintain the product freshness; and (2) Market research via its taprooms – located in regions with high tourist traffic – to find out the countries where demand and brand recognition come from.
Local alcohol businesses
The brewery also has stakes in an apple cider business called “Dalat Cider”, as well as a Japanese sake business.
Loc explained that most of its hops and malts are sourced from outside Vietnam, but it uses local ingredients such as mulberries, raspberries, kumquat, guava, coffee and pineapple for its seasonal flavours.
