Vietnam: the switch of food and beverage consumption

With its 97M of inhabitants (the half under 25 years old)  and its GDP Gross rate of 9,2%  in the first quarter of 2019, Vietnam is one of the fastest-growing economies in the world. The country attracts more and more foreign investments: 5,7B USD from January to April 2019. This is a 7,5% increase regarding the same period In 2018

 

With US$63,380m expected in 2020, the food and beverage sector is considered to be among the rising sector up to the emergence of retail systems with changing consumption habits. We expect annual growth of 6.8% (2020 – 2025). Vietnamese consumers are shifting towards consumption of beverage with higher-value, creating gaps for penetration to high-end beverage segments. Overseas companies enjoy the edge as local consumers now favor international brands.

The food and beverage market in Vietnam in key data*:

  • 750 hypermarkets / Supermarkets
  • 130 shopping centers
  • 89% of Vietnamese are paying / willing to pay more for healthier food (versus 76% worldwide)
  • 88% Vietnamese read nutritional content info on the product labels (than 75% worldwide)

Vietnamese consumers’ top priorities 

According to a VietnamCredit’s survey led in 2019, the consumers’ top priorities when they buy food and beverages are:

  • 60,3% Nutritious
  • 51,5% Organic
  • 45,6% Affordable
  • 33,8%: Certified by Medical Experts
  • 5,9%: Other

What does Vietnamese like to eat?

Vietnamese habits are changing. People here take more and more care of their health and body. They do more sport, but also they take more and more care about their food consumption. They eat more white meat, fiber, and dairy products while fat, sugar, and red meat are less and less popular.

76% say they are trying to reduce their fat consumption.

With US$ 10,873m expected in 2020 (on the US$63.380m), The Bread & Cereal products are the market’s larger segment.

  1. Bread & Cereals
  2. Confectionery and snacks
  3. Vegetables
  4. Fish and seafood
  5. Meats
  6. Fruits and nuts
  7. Dairy products and eggs
  8. Baby food
  9. Convenience food
  10. Sauces and spices

Besides, 35% of the Vietnamese out of home consumption is dedicated to Western food. Family or special occasion dining represents 40% of the whole venues in Western food places

Soft drinks VS healthy drinks: 

US$ 6,480m is expected to be spent in non-alcoholic drinks this year. Besides, we also expect an average annual growth of 9,7% to 2023. In this field, the soft drinks barely lead the sales revenues with US$5,210 (81%) in 2020.  Spending is shifting towards healthier, less-sugared products like bottled water, juices, and some non-carbonated soft drinks (like ready-to-drink tea and coffee) that will represent around 25% of the soft drink consumption in the 3 years.

 

Beer is still no.1 but more and more challenged:

On the US$8,362m expected to spend on Alcoholic drinks in 2020, US$6,3m are for Beers (75,3%). Meanwhile Ciders and wines with respectively US$1.254m (15%) and US$585,000(7%). In 2023, the beers’ segment will be 73%

 

Vietnam and free-trade agreements:

More and more international brands show interest in this country as the government has signed free-trade agreements for food and Beverage with the ASEAN countries, European-Union, Japan, India, Korea, and so on…

With its fast growth, the Vietnamese market becomes more and more important toward the foreign investors’ eyes. The country is progressively opening more of the world with visible effects on its food and beverage culture.

 

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