Nearly 60 per cent of food and beverage companies reported decline in revenue in 2024

Nearly 60 per cent of food and beverage companies reported decline in revenue in 2024

This indicates that while the overall market is expanding, many establishments are struggling to maintain profitability amid challenging economic conditions.

Customers having dinner at a restaurant in Hà Nội. — VNS Photo Mai Hương

The Vietnamese food and beverage industry (F&B) is poised for both significant changes and challenges after nearly 60 per cent of companies in the sector reported a decline in revenue last year, a report from iPOS.vn and Nestlé Professional shows.

Revenues in the F&B sector overall saw a notable rise, reaching approximately VNĐ688.8 trillion (US$27 billion), up 16.6 per cent from 2023. However, only 25.5 per cent of surveyed businesses reported stable revenues, with a mere 14.7 per cent experiencing growth. This translates to nearly 60 per cent of F&B companies witnessing declines in revenue last year. 

This indicates that while the overall market is expanding, many establishments are struggling to maintain profitability amid challenging economic conditions.

Consumer behaviour also played a significant role in shaping market dynamics. While consumer spending did not significantly decline, individuals are increasingly prioritising quality over quantity.

The trend of dining out, particularly on weekends, has gained traction, with frequent and occasional diners constituting nearly 70 per cent of the consumer base.

Interestingly, there is a growing inclination among Vietnamese consumers to spend less than VNĐ35,000 on individual beverages, reflecting a desire to optimise spending while still indulging in external dining experiences.

The culinary sector has also seen the emergence of significant food trends, albeit with a cautious approach from businesses. Surprisingly, 52.8 per cent of companies surveyed admitted they were not pursuing any particular food trends, signifying a more prudent strategy for investment in new culinary fads.

Nonetheless, matcha-based products have surged in popularity, with 29.6 per cent of businesses highlighting it as a key focus. In contrast, the previously dominant flavoured tea trend appears to be fading, as evidenced by a decrease in its popularity.

According to the report, many independent restaurants and other F&B companies, hindered by escalating operational costs and declining consumer purchasing power, are being forced to shut their doors.

Meanwhile, chain restaurants appear to be navigating this turbulent environment successfully, thanks to optimised operational strategies and robust financial management practices.

Despite the prevalent challenges, including rising raw material costs, the F&B market in Việt Nam is expected to achieve a robust growth rate of 9.6 per cent in 2025, according to the report. This projection aligns with broader market trends as the sector continues to adapt to consumer demands and economic fluctuations. 

Bizhub