Vietnam Food and Beverage Market Outlook to 2028

Vietnam Food and Beverage Market Overview

• The Vietnam Food and Beverage Market was valued at USD 24.8 billion in 2023. The growth is driven by a combination of factors including increasing disposable incomes, urbanization, and a growing middle class.
• The key players in the Vietnam food and beverage market include both domestic and international companies. Major domestic players include Vinamilk, Masan Consumer, and TH Group, while prominent international companies such as Nestle, PepsiCo, and Coca-Cola have established a strong presence in the market.
• In recent news, Masan Group has announced a USD 5 million investment in its food and beverage sector, aiming to enhance its production capacity and introduce new product lines. In 2023, Masan Consumer reported an increase in revenue, reaching USD 1.2 billion, driven by the successful launch of new beverage products and a strategic focus on health and wellness trends.
• In 2023, the North Vietnam region is leading by a large and growing population, urbanization, and rising disposable incomes. The demand for both traditional and modern food products is robust, with an increasing preference for convenient and ready-to-eat options.

Vietnam Food and Beverage Market Segmentation

The Vietnam food and beverage market can be segmented by various factors like product, distribution and region.

• By Product Type: The Vietnam food and beverage market is segmented by product type into beverages, packaged foods, and fresh foods. In 2023, Packaged food leads the market driven by the convenience of ready-to-eat meals and snacks. The busy lifestyles of urban consumers and the rise in single-person households have fueled the demand for packaged foods that are easy to prepare and consume.

• By Distribution Channel: The Vietnam food and beverage market is segmented by distribution channel into Hyper Marts, convenience stores and online retail. In 2023, Supermarkets and hypermarkets dominate the distribution channels due to their wide range of products, attractive pricing, and frequent promotions. They provide consumers with a convenient shopping experience and access to a variety of food and beverage options under one roof.

• By Region: The Vietnam food and beverage market is segmented by region into north, west, east and south. In 2023, the Southern region, including Ho Chi Minh City, dominates the market with the highest share due to its status as the economic hub of Vietnam. Higher disposable incomes, a large urban population, and a strong retail infrastructure drive the demand for food and beverage products in this region.

Vietnam Food and Beverage Competitive Landscape

• In 2024, the TH Group's investment in a new dairy farm in Nghe An was announced. TH Group is involved in multiple projects, including an investment of around USD 220 million in dairy farming and milk processing projects.
• In 2023, Nestle Vietnam has been at the forefront of innovation with the launch of a new line of plant-based beverages. This product line caters to the increasing consumer demand for healthier and sustainable food options. The introduction of these innovative products has helped Nestle Vietnam capture a significant market share in the health and wellness segment.

Vietnam Food and Beverage Market Analysis

Vietnam Food and Beverage Market Growth Drivers

• Increasing Consumer Spending on Premium Products: In 2024, consumer spending on premium food and beverage products is reflecting a growing preference for high-quality and luxury items. This trend is fueled by a rise in disposable incomes and a burgeoning middle class with greater purchasing power. The demand for premium products such as organic foods, craft beverages, and gourmet snacks is on the rise, by health-conscious consumers seeking better quality and unique taste experiences.
• Expansion of Modern Retail Channels: The expansion of modern retail channels, including supermarkets, hypermarkets, and convenience stores, has significantly boosted the food and beverage market in Vietnam. By 2024, the number of modern retail outlets is projected to surpass 5,000, providing wider accessibility and convenience for consumers.
• Boom in E-commerce and Online Grocery Sales: The e-commerce sector in Vietnam is witnessing rapid growth, with valued at 5 billion in 2023. This surge is driven by increasing internet penetration, growing smartphone usage, and the convenience of online shopping. Major e-commerce platforms are investing in logistics and delivery services to enhance customer experience, further propelling the growth of the online food and beverage market.

Vietnam Food and Beverage Market Challenges

• Supply Chain Disruptions and Logistics Issues: In 2024, logistical inefficiencies and transportation bottlenecks are projected to result in an estimated loss for the sector. These issues are exacerbated by inadequate infrastructure, leading to delays and increased costs for manufacturers and distributors. Addressing these challenges requires substantial investment in logistics and transportation networks.
• Volatility in Raw Material Prices: In 2024, the fluctuation in raw material prices is anticipated to impact the sector by USD 300 million. These price variations can disrupt production schedules and affect the cost structure, making it challenging for companies to maintain stable pricing and margins.

Vietnam Food and Beverage Market Government Initiatives

• Support for SMEs in the Food and Beverage Sector: To support the growth of small and medium-sized enterprises (SMEs) in the food and beverage sector, the government has introduced various financial and technical assistance programs. These initiatives include low-interest loans, grants for technology adoption, and training programs to enhance the capabilities of SMEs, enabling them to compete effectively in the market.
• Enhancement of Food Safety Standards: The government is focused on enhancing food safety standards to protect consumer health and improve the competitiveness of Vietnamese food products in international markets. In 2024, the government allocated USD 150 million for initiatives aimed at strengthening food safety regulations and enforcement mechanisms.

Vietnam Food and Beverage Market Future Outlook

The Vietnam food and beverage market is poised for significant growth over the next five years, driven by increasing demand for healthy food, food safety standards and online retail stores.

Vietnam Food and Beverage Future Market Trends

• Growth of Functional Foods and Beverages: Over the next five years, the demand for functional foods and beverages in Vietnam is expected to rise. By 2028, the market for functional foods will be around USD 3 billion. This growth will be driven by consumers' increasing awareness of health and wellness, as well as the rising prevalence of lifestyle-related health issues. Companies will continue to innovate and introduce products that offer additional health benefits, such as fortified beverages and probiotic foods.
• Advancements in Food Technology and Innovation: The food and beverage industry in Vietnam will witness significant advancements in technology and innovation over the next five years. By 2028, investments in food technology are growing to raise. These advancements will include the development of new food processing techniques, packaging innovations, and the introduction of smart manufacturing practices.