Vietnam's Food and Beverage Industry: Poised for Growth Despite Challenges

Vietnam's culinary landscape is rapidly evolving, showcasing resilience in a challenging economic environment. A recent in-depth report titled "Report on Culinary Business Market in Vietnam in 2023" reveals a burgeoning food and beverage (F&B) industry driven by changing consumer habits, innovation, and a rising emphasis on quality.

Resilience in Uncertain Times

Despite global economic headwinds, Vietnam's F&B industry achieved a strong growth rate of 11.47% in 2023, with revenues exceeding VND 590 trillion ($23.6 billion).

The report, produced by iPOS.vn in collaboration with VIRAC, highlights an optimistic outlook among businesses in the sector. Nearly 80% of surveyed F&B establishments report positive business performance and possess the resources for future expansion.

Consumer Trends: Spending More, Demanding More

Vietnamese consumers are demonstrating increased spending on dining out, with the dine-in market alone contributing over VND 538 trillion ($21.6 billion) to the sector's revenue. Notably, nearly 15% of diners are willing to spend over VND 100,000 ($4) on a daily dinner – a staggering 3.5 times as high as 2022 figures. This suggests a growing appetite for quality dining experiences.

Small and Medium-Sized Enterprises Take Center Stage

The report anticipates a surge in small and medium-sized beverage outlets in 2024, catering to a demand for convenience and affordability. This aligns with evolving preferences, particularly among the young Vietnamese demographic.

Additionally, Hanoi is gaining ground as a major F&B hub, challenging the traditional dominance of Ho Chi Minh City.

The Rise of Delivery and the Quest for Michelin Stars

While online food delivery faced adjustments in 2023, with reduced promotions and higher fees, it remains an integral part of the market. Interestingly, consumers have adapted, and order sizes have increased.

In a fascinating development, high-end restaurants are vying for the coveted Michelin star – a testament to the industry's aspirations for global recognition. This drive for culinary excellence promises to elevate Vietnam's status as a foodie destination.

Looking Ahead

The IMF has projected strong economic growth potential for Vietnam in the coming years, fueling optimism within the F&B industry. By 2024, experts anticipate its value to reach over VND 655 trillion ($26.1 billion), with independent F&B establishments continuing to hold a dominant market share. The report also notes the importance of addressing workforce challenges within the F&B sector.

Furthermore, the increasing popularity of street food among Vietnamese consumers highlights the continued importance of traditional flavors and experiences within the expanding food scene. Gen Z's influence on market trends is also undeniable, as these consumers drive demand for unique culinary offerings and adventurous dining.

Vietnam's F&B industry demonstrates impressive adaptability and an unwavering appetite for growth. As a nation with rich culinary traditions, it seems poised to become a leading force in the Southeast Asian gastronomic scene.