Despite the challenges of economic growth, the Vietnamese F&B industry is forecasted to still grow and be in the top attractive in the world.08/02/2023
Total spending on food and beverage accounts for the highest proportion with about 35% of spending, the average figure is up to 360 USD/month. This is a higher number than countries in the region such as Indonesia, Thailand, Philippines, Malaysia.
The pandemic has had a significant impact on the economy in general, including the F&B industry in particular. As proof, more than 70,000 restaurants across the United States have closed permanently; while the rest must quickly switch to delivery, and adjust menus and personnel.
A year after Covid-19, the market gradually recovered with a revenue forecast of 898 billion USD in 2022, the labor force also increased by 400,000 jobs, bringing the total number of jobs in the industry to 14.9 million people.
However, in 2023, the industry once again faced the challenge of a global economic recession. Hudson Riehle, senior vice president of research at the National Restaurant Association, said: “The year 2023 will reflect both the impact of the pandemic and economic pressures in the past. Inflation is changing consumer spending habits, while diners focus on finding value. The challenge is how to match the diners’ desire for the food while still keeping it at a price they can afford.”
Particularly in Vietnam, the situation is more positive with the revenue of accommodation and catering services this year estimated at 430,900 billion VND, up 54.7% compared to 2021. The gain was partly due to the strong recovery of tourism.
According to market research firm BMI, Vietnam has become one of the most attractive F&B markets globally. F&B is known to have contributed 15.8% to total GDP (in 2021). Total spending on food and beverage accounts for the highest proportion with about 35% of spending, the average figure is up to 360 USD/month. This is a higher number than countries in the region such as Indonesia, Thailand, Philippines, Malaysia.
Vietnam’s F&B industry is forecast to grow even more. Enterprises also showed investment stimulus to stimulate demand, and at the same time anticipate new trends.
For example, the “big man” in the industry, Golden Gate, has set a goal of doubling its consolidated revenue in 2022 to VND 7,002 billion. Profit after tax is expected to reach VND 375 billion, while in 2021 the loss will reach VND 431 billion. Golden Gate also announced a strategy to increase the total number of restaurants from about 400 restaurants currently (at the end of February 2022) to more than 1,000 in the next few years, aiming for 1 billion USD in revenue. Golden Gate is the owner of the chains Kichi Kichi, iSushi, Gogi House, Sumo BBQ, Cowboy Jack’s, Vuvuzela…
Or the 48 Bistro system (which is famous for beef dishes) has just opened the 48 Hot Pot brand in early December 2022. The brand also designed an open-kitchen hot pot restaurant, a hot beef stand, and a fresh seafood counter based on Chinese cuisine. It is known that the founder and General Director of 48 Bistro system is businessman Ly Anh Tu. He is a chef and has successfully created “Western dishes for Asians”.
A sustained and growing trend is the need for in-restaurant experiences.
In particular, a trend that is maintained and increasingly popular is the demand for restaurant experiences, concentrated in the high-end segment. Surveyed by the association, 70% of diners polled said they still want to dine on-site, connected with a chef. For example, Ibuki – a Japanese restaurant in Ho Chi Minh City, said that other volumes are recovering quite well, especially during Tet.
However, this segment is still facing difficulties due to the inflation situation causing the price of raw materials to increase, even shortage. Not to mention, the requirements of food sources and the health and nutrition of diners are also higher than ever. Recent research by Zagat shows that 3 out of 4 diners say health and safety concerns are the most demanding factors for them when dining out.
Responding to this challenge, Ms. Phan Bich Ha, representative of Ibuki said: “We have long-standing relationships with long-standing corporations in the world, strictly following their transportation and preservation processes, so the input is always stable. As a result, Ibuki can optimize diners’ spending, while ensuring a variety of menu sets with high-quality ingredients.”
In general, although the F&B industry has not been able to return to the level before 2019, there are still bright spots and new opportunities. Businesses can therefore hope for flexibility, as well as insights to anticipate new trends. Because, “understanding the desires and changes of diners in each moment is essential for the success of restaurants in any country. From there, we can apply new trends to enhance the dining experience and how often they return,” the insider emphasized.