FOOD &

BEVERAGES
RETAIL REPORT
Prepared by BritCham Vietnam

September, 2020

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 CONTENTS

ABOUT US

OVERVIEW OF VIETNAM ECONOMY

FOOD & BEVERAGES MARKET

VIETNAM FOOD & BEVERAGE CONSUMERS

OPERATING IN VIETNAMESE F&B MARKET

REFERENCES

This report was produced by BritCham Vietnam with references from sources believed to be accurate and reliable at the
time of publishing. Individuals, companies and organizations are required to acknowledge BritCham Vietnam when using this
work for any papers or publishing purposes. We are not responsible for any loss or damage resulting from opinion, errors,
inaccuracies or omissions affecting any part of the content.

2
 OUR TEAM
MARKETING & COMMUNICATIONS EXECUTIVE TRADE SERVICES ASSISTANT
Nhi Nguyen Tuan Thieu

Deputy Director
An Doan

BUSINESS SERVICES MANAGER

Truc Doan
EXECUTIVE DIRECTOR
FINANCE & HR LEAD
Minh Pham
Brian Bulloch

What we do ?
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 OVERVIEW OF VIETNAM ECONOMY

Middle & Affluent

Middle Class
Population:96.5 million in 2019
population Urban population: 36.6%
Expected to reach 33 million
Urbanization rate: 2.98%
people by 2020
annual rate of change

7.1%
GDP: 255 billion USD (2019) annual change (2018)
GDP per capita: 2,57 USD

57,364,217
Level of expertise: Quantity of labour force
(2019)
21.9 million people with
higher than vocational

primary degree Unemployment Rate:

2.15% (2019)

Asia Development Bank predicts

that Vietnam growth rate will fall World Bank's Ease of Doing
to 4.8% in 2020, but will bounce Business 2019

back to 6.8% in 2021.

According to PwC, Vietnam is one 70th among 190 countries and
of the few countries in the world
that are expected to still grow, 4th in ASEAN
while others go into recession. Best performance in “Getting
credits” and “Paying taxes”
(25th)
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 FOOD & BEVERAGES MARKET
• Vietnam is the 3rd fastest growing country in ASIA in According to Dcorp R- Keeper Vietnam, currently
there are around 540,000 F&B enterprises in Vietnam 2
term of food expenditure 1
• According to Vietnam report, F&B holds the highest 80,000
proportion in Vietnamese spending expenditure, 22,000
accounting for 35% of monthly spending and 15% of
7,000
country GDP, this number is still expected to grow in the
upcoming years.
• In 2018, total retail sales of goods in Vietnam were
estimated to be at VND 3.3 million, in which retail sales of
food and beverage accounts for 12.3%. 430,000
• F&B industry is forecasted to maintain its growth at 10.5%
by 2020 Small local food ventures Fast food
Co ee shops and bars Established restaurants

• The F&B sector accounted for

Proportion of Revenue in VNR500, 2019 - the Industries with
High Potential Growth (Unit: %) 7.8% of Vietnam revenue in 2019
according to VNR500 ranking and is
Finance 14.6 considered to be the fastest
growing industry in both quantity
Telecommunication 9.3
and quality.
Food & Beverages 7.9 • Growing health concerns: In 2019,
Logistic 3.8 Vietnam recorded 76 case of food
poisoning (-29.6% vs 2018), 2,000
Retail 2 infected people (-42.6%), 1,918
Pharmaceutical, people hospitalized (-37.2%), 8
1
medical equipment cases of death (-1.76%)
0 5 10

F&B brands most consumed in % in 2018

(VNR)
45.3
41.8

34.3 32.5
29.2
22.4 23.1
17.2 16.4
11.6

Vissan Nam Vinamilk Heineken La

(Fresh Ngư (Milk) (Alcohol) Vie
Food) (Seasoning) (Mineral
Water)
Hảo Simply Bibica Pepsi G7
Hảo (Oil) (Candy) (Soft (Coffee)
(Instant Drink)
Food)

5
 VIETNAM FOOD & BEVERAGES
CONSUMERS
MEAT:
Vietnam’s total sale volume of meat was around 4.1 million
tons (2019)

25,000
321,000
1,000,000 The fastest growing type of meat
was poultry at 7%, followed by lamb
& goat, then beef & veal.
2,640,000

Pork Poultry Beef and Veal

Lamb and Goat

Pork has the highest volume of sales, in which 61% is supplied

through small-medium slaughterhouses. However, ever since
African Swine Fever was detected in Vietnam in early 2019,
the pork industry was damaged tremendously. According to
statistics published by the Ministry of Agriculture and Rural
Development (MARD), as of March 10, Vietnam has a total of
24 million pigs, down by 26% compared to before the
outbreak. With strain in supply, local pork price begun to
rocket with no signs of slowing down despite the government
action, Vietnam intend to boost imported pork from the
United States, Brazil, Laos, and Cambodia.

DAIRY:
Spending on milk accounts for more than 10%
of total food expenditure in Vietnam,
according to Virac Research. In fact, in 2014-
2019, the industry had experienced a
particularly strong growth with CAGR at
16.6%/year with two main revenue attributing
segments being powdered milk and liquid milk.
However according to a research by SSI
(2019), the market capitalization of milk
industry only increased by 0.5% in 2019,
growth rate was down compared to previous
year and is the slowest growing in the FMCG
product sector. It is diagnosed that the milk
market has saturated in demand.

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 VIETNAM FOOD & BEVERAGES
CONSUMERS

FISH:

Fish processing is one of the keys to economic

development in Vietnam with export value of 8.5
billion USD (2019). Import in 2019 was 1.78 billion
USD with shrimp and tuna accounting for the
majority and their respective market share being
34% and 20%, most imported fish are served as
raw materials for processing or re-exporting.
FAO statistics forecasts that fish products
consumption in Vietnam by 2020 is expected to
be 44kg/capita/year, prompting processing
companies to pay more attention to the domestic
market.

Vietnam is the 3rd largest fish exporter in the world,

after China and Norway

Furthermore, many companies have invested in

processing new products for hi-end markets.
Under a strategy to restructure the aquatic
sector by 2020, Vietnam will reduce facilities for
semi-processed products while encouraging the
application of modern technologies to improve
quality. Proportion of instant and high added
value products is aimed to increase to 60-70%
towards meeting demands of various market 3
towar

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 VIETNAM FOOD & BEVERAGES
CONSUMERS
FRUITS & VEGETABLES:

Horticulture production processing is considered the

most potential sub-sector of Vietnam agriculture,
showing rapid increase every year. However, in 2019,
Vietnam recorded an export turnover from fruit and
vegetables of $3.7 billion USD, down 1.9% compared
to 2018, this is mainly due to the decline in export
quantity and revenue regarding the Chinese market,
according to the Ministry of Agriculture and Rural
Development.

However, in the context of declining exports to the

Chinese market, Vietnamese fruit and vegetables saw
increasing export value to fastidious markets such as
US, Korea, Japan and the Netherlands.

Vietnam is the 8th largest fruit consumer in the world 4

BEVERAGES :

Consumption of beverages, including alcoholic

and non-alcoholic drinks, in Vietnam is on the
rise with an annual increase of 6%-8%, reaching
81.6 billion liters in 2016, and is projected to hit
roughly 109 billion liters by 2020, foreign
beverage companies are looking to make inroads
into Vietnam market. The industry is
characterized by a growing population and a
rising number of middle income individuals, thus
consumers are shifting towards higher value
beverages, creating opportunities for upper-class
beverage segments.

However, this segment is dominated by foreign

players, especially in the alcoholic drinks sector,
posing difficulties for local manufacturers due to
their limited capital budget and expertise in
establishing influential brand names.

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Consumer trends:
According a research conducted by Gojek – Kantar (2019) 5, there are 6 main consumer trends in the food and beverage sector
in Vietnam:

1. Lunch and dinner are the most important meals: 80% of

participants stated that they had lunch and dinner the
previous day while only 70% stated that they had breakfast.
Snacking also plays an important role in daily lives as 1/3 of
surveyors said that they snack 2-3 times a week.

2. Vietnamese don’t eat alone: Participants in Hanoi said that

75% of their meals are spent with someone else, this number
is 69% in Ho Chi Minh City.

3. Vietnamese people prefer quality to convenience when it

comes to food: 1/3 of Vietnamese stated that they don’t have
time for themselves, but 75% agreed that they would be
willing to spend their time and money if the food is good,
and 70% stated that they would be fed up if they have to eat
the same food every day.

4. Out of home consumption: 60% of participants reported

to have eaten out within that week, 43% HCMC and 34% said
that they have ordered takeout in one-week period. When
asked whether they had cooked within 24 hours, 75% of
Hanoi and 67% of Ho Chi Minh City agreed.

5. Cash payment is still the norms: 80% pay in cash when

eating out or buying take-outs, cash is still the primary
payment method when ordering through phone (66% Ho Chi
Minh City, 70% Hanoi) and through apps (48% Ho Chi Minh
City, 52% Hanoi).

6. People tend to double their spending when ordering take-

out than seated. Hanoi expenditure on food is higher than
HCMC by 5-10%, however, HCMC spends more than Hanoi
in food-delivery apps by 10%.

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Shift in consumer preferences 6 7 8 :
Health and Wellness: Companies trying to penetrate the
90 Vietnam food and drink market
need to make an effort in building
76 consumer trust and brand’s
80 healthy image. It is suggested by
75 Nielsen that as 74% of Vietnamese
63
57 shoppers prefer products with
simple & recognizable list of
ingredients, companies should aim
43
to make their label clean and
22 concise in order to attract first-
time customers.

Being transparent about the

Vietnam Global product is also important as
Vietnam Global Vietnam Global Vietnam Global products with traceable claims on
Health as top 2 Concerned about Willing to pay Trust health their packaging (ex: QR Code)
biggest concerns long-term health more for guaranties on would increase consumer attraction
impact healthier food packages index by 25%.

Premiumization:
With the constant economic growth Vietnam has been experiencing over the past decade, the monetary mindset of
Vietnamese consumers has also shifted to a positive change. Specifically, 86% of Vietnamese believe that they are
financially better compared to 5 years ago (#1 globally), according to Nielsen (2019). Also, compared to other countries,
luxury and high-quality products play a bigger role in elevating a person’s image in Vietnam as 72% stated that buying
premium products boosts their self-confidence (vs. 51% global).

However, it should be noted that Vietnamese don’t define premium products by its price, but rather they associate premium
with the product’s quality (65%), organic/natural ingredients (52%) and their origins (50%).

Soy& Oyster
Instant noodles Fish Sauce Biscuits Cake Pie
Sauce

16.5 18.2
32.5 36.2 36.7 38.3
45.2 48.3
According to Nielsen, the most
1.8 66.1 66.3 34.9 35.4
1.9 well-received premium product
19.7 18.1 groups are fish sauce and soy
31.2 and oyster sauce.
53.9 29.4 27.1
0.9 0.9 23.8 25.2 36.6 33.5
2.4 2.6
30.7 32.2 31.8
23 22 19.8 18.4
11.8 12 12.9
2016 2017 2016 2017 2016 2017 2016 2017 2016 2017
Economy Mass Mainstream Premium

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Need for Convenience:
Instant
Noodles Pre- Biscuits
Mixed Cake
Cups
Soy Pie
Sauce
27.2
6.7 23.5

4.2 11.9 12.1 9.3 10.4

2016 2017 20162017 2016 2017 2016 2017

Value % growth Value % growth Value % growth Value % growth

69% 4% 30% 21%

Products that can offer convenience and on-the-go solutions have higher
chance of growth and expanding in Vietnamese market. (Nielsen)

According to Nielsen, Vietnamese are living in smaller but richer household, this is contributed by the fact that
women’s participation in the country workforce is increasing faster than ever, as it is estimated that 80% of
Vietnamese women will be in the labor force by 2025, thus resulting in families in which both parents work,
bringing higher income, but having less time for cooking and other household chores. With 56% of shoppers agreed
that anything that saved their time is worth paying extra for, there’s no wondering why the convenience retail
channel in Vietnam has been booming for the past few years. Just in 2019, Vietnam recorded a total number of 1,300
convenient stores in the countries, increasing by 41% compared to 2018. According to Deloitte (2019), the most
valued attribution of a convenience store is the variety in its offered range of products.

Distribution:
Retailing: Channel preference by product category

Overall, traditional channels such

as wet markets or local stores 49 39 40
53 59
still dominate the F&B retail
channels. In 2018, sales revenue
generated by traditional retailers 51 61 60
47 41
in 2018 was estimated at $43
billion, accounting for 92% of
total grocery retail sales Beverages (alcoholic) Confectionery Tobacco
USDA) 9
(according to USADA) Beverages (non-alcoholic) Packaged Foods

Modern Trade Traditional Trade

Source: Deloitte's Vietnam

Consumer Survey (2019)

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 OPERATING IN THE VIETNAMESE
F&B MARKET

This preference could be explained by the fact

that traditional outlets offer products with
reasonable prices, flexibility in bargaining and
discounting, and buyer-seller relationship.
However, the traditional channel is most often
known to fail below food’s hygiene and safety
standards. In wet markets, meat, fish and fresh
products are exposed to open street air as well
as pests such as flies for hours until they are
purchased. Packaged foods, such as dairy
products and canned foods are not properly
stored in coolers. Additionally, the origins of
the products are hard to trace thus leading to
some consumer shifting to modern retail
channels out of health concerns.

Channel Preference for F&B products

On the other hand, modern retail channels
offer clean, spacious and enjoyable
Beverages (Alcoholic) 51 2 7 40 shopping environment with diverse, fresh
and traceable products. However, the cost
of space rental, air conditioning, cold
Beverages (Non-Alcoholic) 51 6 32 11 storage, labor costs and taxes lead to items
sold in modern retails outlet to have higher
prices than in traditional outlets, which
Confectionery 39 10 42 9
makes it hard for the majority of low and
middle-income households in small cities
Packaged Foods 25 14 51 10 and rural areas to afford daily. According
to USDA (2019), many modern retail chains
are attempting to expand their networks
Tobacco 39 12 58 but are also suffering from losses due to
high operating costs and fierce
competition.
Mom & Pop Store
Wet Markets
Supermarkets
Others

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 OPERATING IN THE VIETNAMESE
F&B MARKET
With Vietnam acceding to the WTO and acquiring various FTAs, Vietnam retail market becomes a promising destination for
foreign retailers. Although domestic player like Saigon Co.op still dominate the market, there is increasing pressure from
foreign firms (e.g., Big C, Aeon,etc.). VinGroup was the largest grocery retailer in Vietnam until they sold their 2,600 VinMart
and VinMart+ stores and 14 high-tech farms to the Masan Group, another Vietnamese conglomerate which specializes in
manufacturing consumer-oriented foods.

Top Supermarkets in Vietnam

Number
Year of
Name Brief introduction of Product Portfolio
entering
outlets

Saigon Co.op Mart belongs to Saigon Union of Trading

Saigon Co- Cooperatives (Saigon Co.op). Starting out in 1996 with one General necessities and fresh goods;
1996 80
op Mart supermarket, Saigon Co.op has become Vietnam's biggest retailer, 90-95% goods are domestic products.
participating in all markets of the retail sector.

Vinmart originally belonged to VinCommerce of Vingroup - the

largest multi-industry private corporation in Vietnam, working in
Over 40,000 necessities and fresh,
Vinmart real estate, retail, education, hospitality, healthcare, agriculture 2014 77
organic goods from VinEco
and heavy industry. In 2019 VinCommerce merged with Masan
Consumer Holding to become a leading consumer retail group.

Big C Originally a domestic firm, Big C joined Central Group (Thailand) General necessities and fresh goods;
1998 36
Supermarket in 2016 and is now one of the largest retailers in Vietnam. 90-95% goods are domestic products.

1994 (as
Started out as a domestic company in 1994, Citimart has risen to Citimart) General necessities and foods;
AEON become one of Vietnam’s major retailers. After AEON purchased 2014 (as 29 products from AEON's TopValue
49% of Citimart’s shares, the two rebranded as AEON Citimart AEON Brand.
Citimart)

MM Mega Market Vietnam (MM) started its wholesale operations

locally in 2002 and now has expanded their stores all over the General necessities and fresh goods;
Mega country. After transferring from Metro Group to Thai Charoen 90-95% goods are domestic products.
2002 20
Market Corporation Group (TCC), MM has been making strong and They also provide direct training to
continuing investments in developing commercial infrastructure over 20000 Vietnam farmers
as well as food safety in Vietnam.

Lotte Mart is a South Korean hypermarket and a subsidiary of General necessities and fresh goods
Lotte LOTTE Group of Korea. (2008) one of the first foreign retailers to 2008 14 with more than 50.000 items and 1000
be present in Vietnam. private label products

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Convenience stores and Mini-markets in Vietnam

Number
Year of
Name Brief introduction of
entering
stores

Similar to Vinmart, Vinmart + originally belonged to Vingroup but in 2019 was taken control by
Vinmart + 2019 2870
Masan Group

“Modern wet market” Bach Hoa Xanh is one of the latest concept by MWG (Mobile World
Bach Hoa
Investment Corporation) who originally operated in mobile phone and consumer electronics 2016 1622
Xanh
retail chains

Starting from 1951 in Texas, United States, Circle K is now one of the most widely recognized
Circle K 2008 400
convenience store brands

Santrafoods It belongs to Saigon Trading Group (Santra). 2011 183

FamilyMart It is a Japanese convenience store franchise chain 2009 147

MINISTOP A member of AEON Corporation 2011 144

In 2013, FamilyMart was acquired indirectly by Berli Jucker Public Company Limited and
B's Mart 2013 150
renamed as B's Mart

GS25 GS25 is a joint venture between Vietnam’s retailer Son Kim Group and South Korea’s GS Retail. 2018 54

7-Eleven Inc. was an American international chain of convenience stores. After 70% of the
company was acquired by Japanese affiliate Ito-Yokado in 1991, it was reorganized as a
7-eleven 2017 33
subsidiary of Seven-Eleven Japan Co., Ltd in 2005, and is now held by Chiyoda, Tokyo-based
Seven & I Holdings Co., Ltd. 2017

Franchising:
According the International Franchise Association in 2019,
Vietnam currently ranks 8th out of 12th top most valuable
markets for global expansion. Another report by Korea
Agriculture-Food Group also stated that Vietnam is the
destination chosen by 43% of Korean companies for
franchising. Major Western brands are also now appearing in
considerable numbers, and Vietnam has developed a few of
its own franchise brands. The Vietnam government is in the
process of easing the country’s franchise laws and
regulations in order to encourage more franchise business
development as it would create more employment.

Most Vietnam franchised enterprises operate in the food and

beverage sector with major international burger, chicken, and
pizza brands present. Most of these franchised stores are
focused in Vietnam's two main metropolises, Ho Chi Minh
City and Hanoi. The biggest franchises continue to be
dominated by QSR brands such as KFC, Lotteria, Jollibee,
Domino's, McDonald's, and many local and foreign brands in
this sector.

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Important F&B Legislations:
Market Access:
• For foreign investors looking to establish a new venture in Vietnam, they would need the following procedures as
prescribed in the current legislation which applies to both wholly foreign-owned and joint venture with Vietnamese partners,
the required certificates are the Investment Registration Certificate (“IRC”) and the Enterprise Registration Certificate
(“ERC”). Other than that, other sub-licenses must be satisfied before and during operations (e.g. certificate of food safety are
applied to food manufacturers and sellers; veterinary hygiene certificate for fresh and raw food originated from animals,
etc.).

• Foreign investors who enter the market through a Merger & Acquisition (“M&A”) would not be required to apply for the IRC
when contributing capital or buying shares of a local company according to the investment regulations. Another advantage
of the M&A access method would be time reduction for the licensing process as sub-licenses would have already been
granted to the existing Vietnamese establishments. However, M&A companies would be posed with other challenges to
overcome that is different strategies, vision, culture with the Vietnamese companies, as well as compliance standard such as
(health safety environment and quality – HSEQ, accounting & financial reporting, social, tax, etc.) would still remain as vital.

Vietnam Food Safety:

In February 2018, Vietnam updated its food safety law by replacing Decree 38/2012-ND-CP with Decree 15/2018/ND-CP and
reduce regulatory burdens and enhance international trade of goods. According to Decree 15, various administrative
procedures was removed with the ultimate aim to increase channels of international trade for food products. More emphasis
was put on food safety inspection while the procedures for safety audits diminished: Previously, any food shipments to
Vietnam were examined. Now, 90 percent can enter country without examination. The responsibility is now placed on
enterprises serving or selling food to declare self-compliance with regard to food safety regulations.

Following that, businesses must be prepared for the potential to be inspected by regulatory authorities. The Ministry of
Health, Ministry of Agriculture and Rural Development, and the Ministry of Industry and Trade will inspect up to five percent
of total food imports per year at random.

Packaging:
• In 2011, The Ministry of Health has issued three national technical regulations on food safety and hygiene for packages,
containers and equipment directly in contact with food in keeping with the Food Safety Law and the Standard and Technical
Regulation Law as follows:

   + QCVN 12-1:2011/BYT on food safety and hygiene for synthetic resin packages, containers and equipment in direct contact
with food.

  + QCVN 12-2:2011/BYT on food safety and hygiene for rubber packages containers and equipment in direct contact with
food.

  + QCVN 12-3:2011/BYT on food safety and hygiene for metallic packages containers and equipment in direct contact with
food.

• According to the Law on Food Safety, prior to the circulation of food packages, containers and equipment that have been in
direct contact with food into the Vietnamese market, an Announcement of Conformity with technical regulations must be
registered with Ministry of Health. Decree 38/2012 and Circular 19/2012/TT-BYT dated November 9, 2012 provides
guidelines on the Announcement on Conformity with Technical Regulations and Food Safety Regulations for food as well as
food packages, containers and equipment in direct contact with food.

15
 OPERATING IN THE VIETNAMESE
F&B MARKET
F&B Sector during COVID-19:
The rise of online food purchase and delivery:
During the unprecedented public health crisis, the food and grocery
delivery segment has gained remarkable momentum. Notably, Cho Tot
had teamed up with Unilever Food Solutions to launch a food category
to its online marketplace and experienced an average traffic growth of
40% with the number of orders up 26%. Similarly, other e-commerce
operators like Tiki, Lazada and Shopee also jumped on the bandwagon
by introducing grocery delivery services during the corona virus
outbreak.

A survey by market research service provider Q&Me showed that some

75% of respondents have used food delivery services and 24% of them
were new users who started to use food delivery services due to
COVID-19. Also, a research by Kantar Worldpanel also showed that a
significant number of new consumers are picking up online shopping
and mini-markets for fast-moving consumer goods. Consequently, both
online shopping and the minimart format reached a peak in shopper
base versus any historical four-week period.

Shifting preference for healthier food:

According to Nielsen Vietnam, consumers have become more
aware of food’s health benefits. For many, the coronavirus
pandemic has served as a wake-up call for people to
recognize the importance of a strong immune system and
adopt a healthy lifestyle and products. A research on post
covid-19 consumer behavior conducted by Nielsen shows
that among items that have seen robust consumption,
consumers are prioritizing healthy food along with essential
items.

Respondents listed the top five most important benefits in

food and drink which are Vitamin C, D, Omega 3 and
Probiotics, which are the auxiliary nutrients that keep the
immune system healthy. For essential commodities such as
milk, Vietnamese consumers have switched from pasteurized
or sterilized milk to plant-based milk such as dak sesame
milk, beans, walnuts and rice milk. As for beverage, bottled
tea such as Tan Hiep Phat, Zero Degree Green Tea and Dr.
Thanh revenue continue too do well as customer believe that
traditional herbal medicine tea can boost the immune system
and prevent diseases.

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 OPERATING IN THE VIETNAMESE
F&B MARKET
Shut down of physical restaurants and coffee shop:
The nationwide social distancing campaign during the pandemic has badly affected restaurants, cafes and street vendors.
According to General Statistics Office, revenues from lodging and food and beverages in the first seven months of 2020 fell
16.6 % YoY to $12.1 billion. In Ho Chi Minh City it was almost three times the rate at 45.1 %, while it was 24.5% in Da Nang and
18.95 in Ha Noi.

-16.6
percentage

-25 -18.9
-21.5
-24.5
-27.5

-50 -46.5 -45.1

-59.1

Nationwide Khanh Ba Ria - HCMC Can Tho Da Nang Thanh Ha Noi

Hoa Vung Tau Hoa

Reduction in revenue from lodging, food and beverages

(Jan-Jul 2020 vs Jan-Jul 2019)

Opportunities & Challenges:

Opportunities:

o Young & affluent population: With 70% of the population under 35 and growing income, companies are required to come up
with innovative solution to meet with consumer demand for convenient, high quality and unique food.

o High demand for organic food: In recent years, there have been a growing global awareness about organic, natural-
preserving food and packaging and Vietnam is no exception. According to Vietnam Report (2019), green and clean products
will be the new market train in the coming years.

o Expansion of convenience store: The growth of local and foreign convenience stores and other modern retail channels
create easier access for enterprises to bring their products into the local market.

o Free Trade Agreements & Globalization: Vietnam is currently in signatory to 16 free trade agreements which poses as its
greatest strength in international trade and investments.

o High consumer confidence: In 2019, Vietnam ranked 3rd in World’s consumer confidence index of 129 percentage points,
indicating high job opportunities, personal finance and readiness to spend.

o Big Data and Artificial Intelligent: Technology have been applied to the F&B sector allowing immediate payment, source
tracking and personalization from collected data.

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 OPERATING IN THE VIETNAMESE
F&B MARKET

Challenges:
Top 5 barriers, threats affecting growth potential of enterprises in 2019 and the first half of 2020 according to assessment of enterprises (%)

Unstable economic growth Complex administrative procedures

Volatile exchange rate Tax burden

Access to affordable capital

30.2 36.5 39.7 52.4 55.6

Source: Vietnam Report, Enterprise conducted in September 2019

Problems that are unique to the F&B sector:

+ Infrastructure for manufacturing, transporting and interrogating systems have not been properly invested and developed,
thus increasing production and management cost.

+ The export market lacks stability as policies on quality barriers are constantly changing, and Vietnam has failed to meet
with requirements in FTAs concerning the technical procedures and product qualities.

+ High competition: Regarding F&B, foreign companies when entering Vietnam’s market not only have to face fierce
competition with locally produced goods but also with other countries’. Vietnam is already a large producer of agricultural
products such as pork, coffee, vegetables and fruits and has become more globally integrated by signing a wide range of
FTAs, resulting in the proliferation of the partners’ products, especially Asian partners, on Vietnamese shelves.

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<1> Đâu là cơ hội cho ngành F&B trong thời điểm hiện tại? (2020, March 31). Printgo.
https://printgo.vn/dau-la-co-hoi-cho-nganh-fb-trong-thoi-diem-hien-tai-v478

<2> Thanh Giang. (2019, December 19). Công nghiệp chế biến thực phẩm hút vốn đầu tư. Đại Đoàn
Kết. http://daidoanket.vn/kinh-te/cong-nghiep-che-bien-thuc-pham-hut-von-dau-tu-
tintuc455021

<3> Vietnam to become global seafood processing centre. (2016, October 22). Public Security.
http://en.cand.com.vn/Law-Society/Vietnam-to-become-global-seafood-processing-centre-
413650/

<4> Which Country Eats the Most Fruits? (2017). HelgiLibrary.

https://www.helgilibrary.com/charts
/which-country-eats-the-most-fruits/

<5> Goviet công bố kết quả khảo sát xu hướng hành vi tiêu dùng ẩm thực. (2020). Goviet.
https://www.go-viet.vn/blog/tin-tuc/goviet-cong-bo-ket-qua-khao-sat-xu-huong-hanh-vi-tieu-
dung-am-thuc/

<6> What’s next in food? https://www.nielsen.com/wp-

content/uploads/sites/3/2019/04/Whats20next20in20Food_2018.pdf

<7> Deloitte. (2020, January). The Vietnam Consumer Survey.

https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/consumer-business/sea-cb-
vietnam-consumer-survey-2020.pdf

<8> Nielson. (2019). Enable Your Success in Vietnam.

https://eurochamvn.eventbank.com/resources/protected/organization/726/event/15756/f7dc67c
4-e78c-425c-adaf-4e55270a0b88.pdf

<9> USDA & G.A.I.N. (2019, December). Retail Foods.

https://agfstorage.blob.core.windows.net/misc/FP_com/2019/12/12/Viet.pdf

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