In 2024, Việt Nam’s confectionery industry experienced a combination of growth opportunities and significant challenges, as the market underwent shifts in consumer preferences, rising costs, and intensified competition.
Traditionally enjoying strong demand during festive seasons, the industry has seen some businesses flourish while others have faced difficulties in maintaining market position. The year has tested the resilience of companies striving to solidify their presence.
Despite economic uncertainties, certain confectionery businesses reported notable growth. Hữu Nghị Food JSC, for example, managed to increase its gross profit by 12 percent in the fourth quarter (Q4) to VNĐ201 billion (US$24.3 million) despite a 2 percent decline in revenue. The company improved its profit margins by reducing production costs, resulting in a 2.5 times surge in profit after tax to VNĐ71.8 billion for the quarter, and an annual net profit of VNĐ178 billion, a 150.7 percent increase from the previous year.
Bibica Corporation also posted strong results, with a 19 percent increase in net revenue to VNĐ1.78 trillion and a 25 percent rise in gross profit to VNĐ621 billion. The company’s net profit grew by 20 percent to VNĐ116 billion, outperforming its revenue and profit targets for the year.
Not all companies shared in the success. Hải Hà Confectionery JSC, a long-standing industry player, experienced a 10 percent decline in revenue to nearly VNĐ777.2 billion. While the company managed to stabilize its gross profits, it fell short of expectations with a profit before tax of nearly VNĐ64 billion, down 0.1 percent, and a net profit increase of only 2 percent to VNĐ50.3 billion. Hải Hà did not meet its target of VNĐ1.2 trillion in revenue and VNĐ70 billion in profit before tax.
KIDO Group Corporation, while posting growth in Q4 2024, faced an overall decline for the year. Despite diversifying into sectors such as ice cream and cooking oil, the company struggled with profitability. In Q4, KIDO reported a 29 percent year-on-year increase in net revenue to nearly VNĐ2.6 trillion and a 22 percent rise in gross profit to VNĐ472 billion, but selling and administrative expenses surged significantly. This led to a profit of VNĐ13.7 billion, an improvement from the VNĐ551 billion loss in the same quarter last year. However, for the entire year, KIDO’s net revenue fell by 3.7 percent to over VNĐ8.3 trillion, and its profit after tax declined by 50 percent to VNĐ67 billion, marking the lowest in 15 years.
The struggles faced by companies like Hải Hà and KIDO highlight the challenges of a shifting market, where traditional strategies may no longer be enough to succeed. — BIZHUB/VNS
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