Vietnamese dairy giant, Vietnam Dairy Products JSC (Vinamilk) and packaged food producer, Kido Group Corporation have recently announced the dissolution of their ice cream and non-alcoholic beverage joint venture, Vibev Food and Beverage Joint Venture Co. Limited, after nearly 2 years of operation.
Both partners attributed the closure due to changes in each company’s business strategy and development, apart from the negative impact of the global economy on Vibev business.
In June 2020, both partners announced the establishment of Vibev, which specialized in the manufacturing and selling of beverages such as tea, milk tea, ice cream, and frozen food. Due to the pandemic, Vibev officially started operation only last year with an investment of US$16.4 million.
The initial plan was for Vibev to dominate the non-carbonated beverage segment in Vietnam as the 2 partners have substantial market strengths, however inflation has led to rising material costs on top of intense competition in the beverage market between local and foreign players. In addition, Vibey’s product launch was also delayed by the pandemic which stifled its ambition to be a leading bottled water producer in the country.
As a result, Vibev suffered from an accumulated loss of nearly Dong 73 billion (US$3 million) after just 2 years of its establishment.
