Food and beverage sector maintains stellar growth with dealmaking nous

Food and beverage sector maintains stellar growth with dealmaking nous

Vietnam’s food and beverage market is set to record increased activity as local and foreign players ramp up investments and mergers and acquisitions.

F&B players in coffee, tea, and others are moving to expand and invest in their factories, photo Le Toan

In mid-March, Trung Nguyen Legend broke ground on a coffee factory in Buon Ma Thuot city of the Central Highlands province of Dak Lak, at a cost of over $78 million.

This is Trung Nguyen Legend’s fifth factory in Vietnam, with the venture expected to boost robusta coffee processing and exporting capabilities in Vietnam’s largest coffee-growing region.

Vanusia Nogueira, executive director of the International Coffee Organisation, said, “With the growing demand for robusta coffee beans globally, we appreciate Trung Nguyen Legend’s efforts to expand and invest in a factory in Buon Ma Thuot. The project extends beyond economic development to prove a harmonious blend of global vision and indigenous traditions. It sets a model for sustainable development, bringing benefits to farmers, communities, and consumers around the world.”

Elsewhere, in early February, HiteJinro, a South Korean beverage company, started construction of its soju plant at the Green I-Park Industrial Complex in the northern province of Thai Binh. The initiative is slated to be completed in 2026, with an annual production capacity of up to five million cases. The plant will produce products to serve the Vietnamese and global markets.

HiteJinro CEO Kim In-Kyu said, “The new plant is of strategic importance as a bridgehead for global market expansion centred on Southeast Asia. The venture marks a pivotal turning point in our journey towards becoming a global comprehensive liquor company. It is significant to break ground for our first overseas production plant in Vietnam, which was the starting point for soju exports.”

As reported by Bangkok Post, Suntory Beverage & Food, part of Suntory Group, is gearing up to boost production capacity in Thailand and Vietnam.

Its president and chief executive Makiko Ono said the Asia-Pacific region is a vital growth driver for the company, highlighting the significant potential in Thailand and Vietnam as key markets.

“We are building a new factory in Vietnam. In Thailand, we are now expanding our capacity by installing two new production lines this year and next year,” Ono added.

Last April, Suntory PepsiCo Vietnam commenced construction on a $300 million beverage plant in the Mekong Delta province of Long An. The 20-hectare facility in Duc Hoa district will have an annual capacity of 800 million litres, and become the company’s largest and most advanced plant in the Asia-Pacific region.

According to the Vietnam Food & Beverage (F&B) market report 2024 released by iPOS.vn and Nestlé Professional on March 18, Vietnam’s market is set to register a growth rate of 9.6 per cent in 2025. At the end of 2024, the number of F&B establishments was estimated at just over 323,000, up 1.8 per cent from the previous year.

Despite consumption challenges, the F&B market posted a revenue of $27 billion in 2024, marking a rise of 16.6 per cent against 2023.

Besides expanding manufacturing capacity, F&B players also boost their dealmaking activities to get a bigger slice of the market.

Vietnamese restaurant group Golden Gate is reportedly acquiring The Coffee House from local retail group Seedcom. The deal takes place amid The Coffee House’s lacklustre performance. Last year, the chain shut down over 30 outlets in Can Tho, Danang, Haiphong, Hanoi, and Ho Chi Minh City. At present, the chain runs 93 outlets, a sharp drop from 150 outlets in late 2023.

Meanwhile, Golden Gate was the largest player in terms of value sales in 2024, supported by its ownership of the Kichi Kichi (hot pot), Gogi House (Korean BBQ), and Manwah (Taiwanese) full-service restaurant chains, according to Euromonitor International.

Private equity firm Excelsior Capital Vietnam Partners has made an investment in local restaurant operator Aladdin. Founded in 2017, Aladdin is one of the fastest-growing companies in the industry, with restaurant chains like Bo To Quan Moc, Long Wang Hotpot, and Banh Trang An Vu.

Nguyen Thai Binh, co-founder of Hoc Vien Concepts, said that instead of investing in new brands, many funds are prioritising the purchase of F&B chains to optimise cash flows and reduce risks.

“Through acquisitions, investors can shorten the time to build a new business and take advantage of the system in efficient operation while increasing the value of their investment portfolio. Owning a business with stable revenue not only ensures positive cash flow but also helps increase valuation value, creating an advantage in the next fundraising rounds,” Binh said.

VIR