Vietnam’s food and beverage–or F&B–industry has experienced remarkable growth in recent years, driven by a combination of factors including rapid urbanisation, rising disposable incomes, and a burgeoning middle class. The country’s rich culinary heritage, coupled with increasing consumer demand for diverse and convenient food options, has created a dynamic and promising market.
With a large and young population, Vietnam presents a substantial consumer base for both domestic and international F&B companies. The industry has witnessed significant investments in production, processing, and distribution infrastructure, leading to improved product quality and wider market reach.
As consumer preferences evolve, the F&B industry in Vietnam is undergoing a transformation. There is a growing emphasis on health and wellness, with consumers seeking products that are natural, organic, and nutritious. Additionally, the rise of e-commerce and digital platforms has reshaped the way consumers discover and purchase food and beverages.
The Vietnamese F&B industry offers immense potential for both local and foreign businesses. However, it is essential to navigate the competitive landscape, understand consumer trends, and adapt to the evolving market dynamics to achieve success.
Food and beverage retail sales numbers
An iPOS food and beverage market report released early this year found that in 2023 Vietnam had around 317,000 restaurants and cafes. This was an increase of 1.26 percent over 2022 which was lower than expected with iPOS noting that a number of food and beverage outlets had downsized their operations.
This was in line with slower growth in the industry overall. Whereas it did manage to expand by 11.6 percent in 2022 it had expanded by almost double that at 19.7 percent. It should be noted, however, that 2022 saw significant growth as a result of COVID-19 lockdowns in 2021.
Of note, the same report found that Ho Chi Minh City accounted for a market share of about 28 percent of Vietnam’s food and beverages market. HCMC was followed closely by Hanoi at 23.3 percent. In third place was Binh Duong, next door to HCMC, followed in fourth place by Danang with 4.2 percent.
Box 1: Snack foods are popular in Vietnam
Vietnam’s snack consumption has been estimated at about 5.2 kg per person, slightly higher than the global average of five kilograms, suggesting a healthy market for snack foods. Furthermore, Vietnam’s snack food market is projected to reach US$3.9 billion this year, with a compound annual growth rate of 8.15 percent from 2024 to 2029, according to Statista.
Vietnam’s food and beverage exports
Vietnam has emerged as a significant player in the global food and beverage export market. The country’s strategic geographic location, coupled with a favourable investment climate and a growing agricultural sector, has positioned it as a competitive exporter.
Vietnam food and beverage exports, July 2024
| Year to date | 2024 vs 2023 % | |||
| Description | Tons | US$ | Tons | Value |
| Coffee | 979,353 | 3,607,219,994 | -12 | 34 |
| Fruits and vegetables | 3,880,719,992 | 26 | ||
| Tea | 77,280 | 133,387,530 | 32 | 34 |
| Seafood | 5,326,538,900 | 8 | ||
| Rice | 5,299,443 | 3,339,710,379 | 8 | 28 |
| Pepper | 163,296 | 760,265,740 | -3 | 41 |
| Pastrycooks, sweets and cereals products | 652,452,392 | 18 | ||
| Cashew nuts | 421,560 | 2,365,490,559 | 26 | 22 |
Source: Vietnam General Department of Customs
Box 2: How to Export Coffee from Vietnam
Vietnam is among the world’s biggest coffee exporters. In 2022, Vietnam exported coffee to the tune of 1.78 million tons second in volume only to Brazil. In this light, there is a huge opportunity in buying and exporting Vietnamese coffee around the world. This can be very profitable but there are a few nuances to the process that foreign firms looking to export coffee from Vietnam should be mindful of. Read more…
Vietnam’s food and beverage imports
Vietnam’s food and beverage import landscape is evolving rapidly due to increasing consumer demand for diverse and high-quality products. While the country is known for its agricultural exports, it also imports a significant volume of food and beverage items to supplement domestic production.
Vietnam food and beverage imports, July 2024
| Year to date | 2024 vs 2023 % | |||
| Description | Tons | US$ | Tons | Value |
| Cashew nuts | 1,781,183 | 2,145,957,088 | 2.5 | 0.6 |
| Seafood | 1,438,070,244 | -3.9 | ||
| Corn | 5,743,871 | 1,430,540,687 | 34.3 | 1.9 |
| Fruits and vegetables | 1,227,127,511 | 13.2 | ||
| Soya beans | 1,313,193 | 687,650,179 | 8.7 | -11.9 |
| Animal, and vegetable fats and oils | 671,987,801 | 2.4 | ||
| Milk and milk products | 635,570,196 | -10.4 | ||
| Other edible food preparations | 741,600,231 | -2.0 | ||
| Pastrycooks, sweets and cereal products | 287,927,008 | 10.3 | ||
| Wheat | 3,440,482 | 954,673,896 | 24.8 | -2.8 |
Source: Vietnam General Department of Customs
Box 3: Japanese food and beverage firm buys Vietnam dairy company
Vietnam’s New Viet Dairy, an importer, exporter, and distributor of specialty dairy and deli products, was sold to Japan’s Sojitz Corporation late last year. The value of the sale was not disclosed, however, New Viet Dairy reported revenue of US$320 million last year. This is in line with a growing demand among Vietnam’s emerging consumer class for new and exotic foods and drinks.
Vietnam’s Food and Beverage Businesses: Key Players
Vietnam’s food and beverage (F&B) industry has witnessed substantial growth, driven by increasing disposable incomes and evolving consumer preferences. The sector is characterised by a dynamic interplay of local and international players.
Vietnamese food and beverage firms
- Masan Group: This conglomerate dominates the F&B landscape with a diverse portfolio encompassing food, beverage, retail, and packaging. Its flagship brands, such as Vinamilk and WinMart, have solidified their positions as household names in Vietnam, capturing a significant market share and influencing consumer preferences. Notably, Masan’s strategic investments in technology and distribution have been key to its success.
- Vinamilk: As Vietnam’s leading dairy producer, Vinamilk has built a strong brand reputation and extensive distribution network, catering to the growing demand for dairy products among Vietnamese consumers of all ages. The company’s focus on product innovation and quality control has contributed to its sustained growth.
- TH True Milk: Known for its fresh milk and yogurt, Th True Milk has carved a niche in the market by emphasising product quality, freshness, and traceability, appealing to health-conscious consumers.
- Kido Group: A major player in the confectionery and bakery sectors, Kido Group offers a wide range of products, including instant noodles, biscuits, and confectionery, catering to various consumer segments and successfully adapting to changing tastes.
- Masan MeatLife: A subsidiary of Masan Group, this company has made significant strides in the meat processing industry, providing high-quality meat products to the market and contributing to food safety standards in Vietnam.
Box 4: Kido fined US$9,660 for stock market disclosure breaches
Last year, well-known food processing firm Kido was fined for three breaches of Ho Chi Minh Stock Exchange disclosure rules. This included US$4,830 for the non-disclosure or late disclosure of information; US$3,800 for not reporting to the Hanoi Stock Exchange how capital from a corporate bond issuance had been used; and US$1,030 for failing to clearly explain remuneration packages of board member and the salaries of C-level executives.
International food and beverage firms in Vietnam
- Unilever: A global consumer goods giant, Unilever offers a diverse product portfolio, including personal care, home care, and food, catering to various consumer segments and income levels. Its ability to adapt to local tastes and preferences while leveraging global expertise has been key to its success.
- Nestle: As a leader in the infant nutrition and dairy market, Nestle has successfully captured a significant share of the Vietnamese market through its range of products and strong brand-building efforts, emphasising nutrition and health benefits.
- Coca-Cola and PepsiCo: These global beverage giants dominate the carbonated drinks market in Vietnam, offering a wide range of products to cater to different consumer preferences and occasions. Their strong distribution networks and marketing campaigns have solidified their positions.
- Heineken: Heineken has been brewing beer in Vietnam since the early 90s. It currently boasts six factories and 3,000 employees. The company currently has three factories in southern Vietnam, two in central Vietnam, and one in Hanoi.
These companies, among others, have significantly shaped the F&B landscape in Vietnam, influencing consumer preferences and driving industry growth. The intense competition has led to product innovation, improved quality, and expanded consumer choices, benefiting the Vietnamese market as a whole.
Box 5: The 2024 Heineken factory closure
The closure of the Heineken plant in Quang Nam, in central Vietnam, announced in 2024 was big news with the provincial government set to lose out on VND 500 billion–or about US$19.8 million–in tax revenue each year. This was off the back of slow growth in beer sales post-pandemic and in line with falling revenues among a number of Vietnam’s major beer brewers blamed on broader economic challenges and harsher drink driving penalties.
See also: What’s Happened to Vietnam’s Beer Market? Unpacked 2024
Food and beverage brands in Vietnam
Vietnam’s restaurant scene has witnessed rapid growth, driven by urbanisation, rising incomes, and changing consumer preferences. A mix of local and international players has shaped the industry.
Local Restaurant Chains
- Golden Gate Group: A leading player in the Vietnamese restaurant scene, owning multiple restaurant brands catering to different segments.
- Phuc Long Coffee & Tea: While primarily known for its coffee and tea, Phuc Long has expanded into the restaurant business with a focus on casual dining and light meals.
- Highlands Coffee: Another major player in the coffee market, Highlands Coffee has also ventured into the food business with a range of Western and Vietnamese dishes.
International Fast Food Chains
- KFC, McDonald’s, Lotteria: These global giants have established a strong presence in Vietnam, catering primarily to the younger demographic.
- Pizza Hut and Domino’s: Dominating the pizza segment, these chains have adapted their menus to suit local tastes.
Independent Restaurants
- Street food vendors: A cornerstone of Vietnamese culinary culture, street food vendors offer a diverse range of affordable and delicious options.
- Family-owned restaurants: These establishments often serve authentic local cuisine and have a loyal customer base.
- Fine dining restaurants: Catering to the growing affluent class, these restaurants offer high-end dining experiences with international and fusion cuisines.
The Vietnamese restaurant industry is dynamic and competitive, with new players emerging and existing ones adapting to changing consumer preferences. Factors such as food safety, service quality, and ambience are crucial for success in this sector.
Box 6: How to Open a Coffee Shop in Vietnam
Opening a cafe or coffee shop in Vietnam for foreign firms or individuals, however, is not always easy. Not only are there a number of technical and licensing requirements that need to be met, but Vietnam has also developed its own very distinct and unique coffee culture which can make penetrating Vietnam’s coffee consumer class challenging.
Understanding the nuances of Vietnamese coffee culture and the complexities of business establishment procedures in advance of entering the market can therefore be crucial to the success of a new cafe or coffee shop in Vietnam. Read more…
What’s next?
Vietnam’s food and beverage industry has experienced remarkable growth, driven by a dynamic interplay of domestic and international players. Local conglomerates and multinational corporations alike have contributed to shaping the market, with a focus on meeting the evolving needs and preferences of Vietnamese consumers.
As the country continues to develop, the F&B sector is poised for further expansion, driven by factors such as urbanisation, rising incomes, and a growing middle class. Challenges such as competition, changing consumer tastes, and supply chain disruptions will require businesses to adapt and innovate to remain competitive.
Overall, the Vietnamese F&B market presents a promising landscape for both local and international companies, offering significant opportunities for growth and development.
With this in mind, to keep abreast of what’s happening in Vietnam’s food and beverage industry, foreign food and beverage industry professionals should make sure to subscribe to the-shiv.