F&B market robust on rising middle class
F&B market robust on rising middle class
The food and beverage (F&B) market in Việt Nam is forecast to be robust, with the rising middle class providing significant opportunities for expansion and market entry. However, competition will grow fiercer.
The F&B industry is forecast to reach a revenue of VNĐ655 trillion this year, up from VNĐ590 trillion in 2023. — VNA/VNS Photo |
A recent market analysis by iPOS.vn found optimism across the industry.
Findings showed that the F&B industry reached a revenue of VNĐ590 trillion (US$23.65 billion) in 2023, a rise of 11.47 per cent against 2022, in which dine-in accounted for more than 91 per cent.
More than 79 per cent of F&B establishments saw their business on a good trend and said they had enough resources for further development, while more than 51.7 per cent of owners said that they had plans to expand their operation in the coming future.
iPOS.vn forecast that the industry will reach a revenue of VNĐ655 trillion this year.
Mordor Intelligence estimated that the F&B market will hit a scale of $36.29 billion in 2029 with a compound annual growth rate of 9.82 per cent in the 2024-29 period.
Vũ Thanh Hùng, general director of iPOS.vn, said that 2023 was a challenging year for the F&B industry but the large domestic market coupled with tourism boom after COVID-19 supported the growth of the F&B revenue.
The number of restaurants and cafés rose 1.26 per cent to 317,299 establishments last year, quite a low growth rate due to the wave of closures of small and medium sized F&B establishments and the strategy of reducing the operation scale of major players.
Some major players such as Golden Gate, Phúc Long Coffee & Tea and Highlands Coffee shut down some stores in prime locations to optimise profits and increase efficiency.
Meanwhile, the market saw the expansion of small-scale establishments which fast caught up with trends.
Online food delivery reached VNĐ52.4 trillion in 2023, up 20.18 per cent from the level of 2022 and 3.5 times the figure of pre-pandemic period, demonstrating that ordering food online is increasingly popular and providing significant opportunities for F&B businesses apart from dine-in. Nearly 48 per cent of enterprises had online revenue accounting for 25-50 per cent of total revenues.
The middle class in Việt Nam currently accounts for 13 per cent of the country’s population and is forecast to increase to 26 per cent by 2026.
The country’s GDP per capita is expected to exceed $5,000 this year.
The boom of the middle class will drive the demand for the F&B market, according to the report. Notably, the gen Z (born between 1997 and 2012) is gradually becoming the main market driver.
Although the F&B market has strong potential, given the country’s huge population reaching 100 million and rising middle class, competition is growing fiercer.
iPOS.vn predicted that 2024 will witness the strong rise of small and medium sized beverage shops which follow the trend of convenience.
There will be increasing competition among high-end restaurants for Michelin awards, the company said, adding that many F&B brands are making efforts to improve the quality of their dishes and services.
The competition will not only benefit Vietnamese diners, but also accelerate the popularity of Vietnamese cuisine in the global map, Hùng said.
According to Kao Siêu Lực, general director of Asia Bakery – Confectionery Joint Stock Company, companies should focus on improving product quality, enhancing competitiveness and seeking for new sales and marketing channels to expand international reach.
In addition, F&B should also change their operation models to adapt to market trends and optimise operation, especially online food ordering.
