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Timely entrance into Vietnam for Baskin-Robbins

By Kacey Culliney , 10-Jan-2012

US ice cream brand Baskin-Robbins has timed entrance into Vietnam carefully via a franchise with a local food company amid a snowballing economy and emerging middle class with a taste for luxuries, the company said.

The franchise agreement with Blue Star Food Corporation, that will see 50 ice cream shops opened throughout Vietnam over the next few years, commenced with the opening of three stores in Ho Chi Minh City last week.

Sara Larcombe, director of marketing, Asia, for Baskin-Robbins, told FoodNavigator-Asia that timing is crucial when entering developing markets around the world.

“With the future growth potential of the Vietnam economy, we believe now is a prime time to develop in this market, with a government that is friendly to businesses and an expanding middle class that can afford to treat themselves to an affordable luxury like ice cream,” Larcombe said.

According to a recent Euromonitor report ‘Ice cream in Vietnam’, as market conditions improve and living standards have upgraded, so too has the demand for indulgent products such as ice cream.

Business operations

Larcombe said that the franchise business model is successful as the “hands-on, small business approach allows franchisees the ability to create a strong presence in local communities.”

Product development and merchandising will be handled at the company’s headquarters in North America, she explained, and brand development and distribution within Vietnam will be the responsibility of Blue Star Food.

All of our ice cream products are produced in North America and so consumers in Vietnam will be able to enjoy premium imported ice cream, she said.

Baskin-Robbins has stores throughout Asia Pacific in Japan, South Korea, Malaysia, Indonesia, India, Thailand and Taiwan, and Larcombe added that in there is over 85% brand awareness in the strongest markets.

“We have gained a keen understanding of the Asian perspective from our long experience in the region… And we can adapt our flavour variety to meet the demands of the Vietnamese customer base,” she said.

As well as traditional global flavours, the company has tailored product ranges to suit local tastes, with Green Tea and Mango Mania available throughout Asia Pacific.

Strategy in Vietnam

Larcombe explained that while the initial phase of the franchise will focus on ice cream shops, there are plans to explore other distribution channels.

“There is great potential in the take-home ice cream market in Vietnam… So we look forward to exploring distribution in supermarkets down the road,” Larcombe said.

Euromonitor statistics pegged Vietnam’s ice cream market at US$65.9 million in 2011 with a forecast worth of US$70.5m in 2012. It showed a market growth of 11.9% for 2010-2011; compared to the global market growth of 8.4%.

In 2011 Vietnam retailed nearly 22 thousand tonnes of ice cream, up 5.6% from the year before.

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