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5 trends of Vietnam’s F&B industry in 2023

5 trends of Vietnam’s F&B industry in 2023

Tuesday 07, 02 2023
With a turbulent 2023 incoming, new trends will appear and influence how Vietnam’s F&B industry will turn out.

Vietnam’s F&B industry in 2022

According to a recent report by iPOS.vn, by the end of 2022, Vietnam had nearly 338,600 restaurants/cafes. Ho Chi Minh City is the province that owns the most restaurants, accounting for 39.78% of the number of shops nationwide, nearly 3 times higher than Hanoi in the second place. The revenue scale of Vietnam's F&B industry in 2022 is estimated at around 610 trillion VND. 333.69 trillion VND of that revenue comes from the eating-out market.

Vietnamcredit F&B

In nearly 3,000 restaurants and cafes surveyed, up to 46.5% of F&B businesses still have not sold online. However, 82.8% of F&B businesses have started the digital transformation, and applied it mainly in sales and inventory management, raw materials, etc.

With nearly 4,000 diners interviewed, the two most important criteria when choosing an outdoor restaurant are good food, good drink, and price. 40,000 - 70,000 VND is the cost that Vietnamese people usually spend to go to coffee, and they are willing to spend up to 500,000 VND for special dining occasions.

More surprisingly, 77.16% of diners kept their spending and even increased their spending on food in 2023. It shows that although the economy in 2023 is forecast to have many difficulties, most diners still want to spend a lot of money on culinary experiences.

Vietnam’s F&B - 5 trends in 2023

Although the economy in 2023 is forecasted to have many difficulties, according to Euromonitor, the market value of Vietnam's F&B industry in 2023 is expected to increase by 18% compared to 2022, reaching a revenue milestone of about 720,300 billion VND. Even after a strong recovery and growth, the F&B industry will continue to develop at a stable rate and is expected to reach a value of 938,305 billion VND by 2026.

According to the Vietnam Culinary Business Market Report 2022, Vietnam’s F&B industry will experience a few prominent trends as follow:

Cloud kitchen – A hot trend no longer

In recent years, with the development of online food ordering applications, the "cloud kitchen" models are expected to become popular in the Vietnamese market. The model proved quite attractive in theory.

Vietnamcredit Vietnamese market

After a while, though, the trial projects of ShopeeFood, GrabFood, and several other independent individuals all closed down. The main reason was that the lessee and the owner could not find a balance in the cost/profit structure, leading to famous brands not being interested in joining. The Cloud Kitchen model may be refined and optimized into a new version.

The trend of healthy eating and vegetarianism will be promoted but won’t be as grand

More and more customers are paying better attention to their health post-pandemic. Brands that follow the healthy eating trend are increasing. The trend is most visible in big cities like Hanoi, Ho Chi Minh City, and Da Nang.

However, this trend is not a new one. It has been around for the last 10 years and is resurging due to the pandemic. The Vietnamese will still favor hotpot, grilled food, fast food, rice, pho, etc., over healthy eating brands, because of their consuming habit. Though, the percentage of customers that are choosing healthy food is gradually rising.

A fight for market share among big brands

In the last quarter of 2022, the F&B market in Vietnam did not follow its trend in previous years. The last quarter of the year usually was the time when new restaurants, cafes, etc., mushroomed across Vietnam. It was also a time when customers dined out with high frequency.

With the global economic situation getting complicated in 2022, the trend was not as strong and is expected to remain so for 2023. In that context, individual investors decide to lay low and be more cautious. Plans for new openings are delayed until they can better grasp the market situation.

Vietnamcredit Golden Gate

With competition getting weaker, big brands, especially chain brands, are exploiting the chance to claim market share with their accumulated capital. Golden Gate, Highlands Coffee, The Coffee House, etc., keep expanding their chains. Up-and-coming brands, such as Phe La, Katinat, etc., will also compete for a place in the market.

Online ordering gets popular - The trend is 8/2 between running a food delivery app and self-delivering

Selling food online has become common practice in Vietnam’s F&B market. The most problematic issue between restaurants and online food ordering platforms is related to the cost of commissions per order, which ranges from 20-25%, a pretty high percentage.

In addition, all brands are getting on food ordering applications, and participating in the “discount race” to win orders is eroding profits. The profit is now entirely dependent on each platform’s policy.

Therefore, many F&B brands are balancing at an optimal ratio of 8/2: 80% of online orders from applications, and 20% from self-operated systems via hotline and inbox, in addition to making self-delivery via AhaMove, GrabExpress, etc. In the coming time, the ratio can be 7/3, or even 6/4.

A more widespread trend of digital transformation

The government in Vietnam is promoting the process of digital transformation, and the F&B industry is happily involved. In 2022, the number of restaurants participating in digitization has increased significantly. Not only stopping at sales management software, but now many brands have seriously evaluated the role of technology in many other operations such as customer care, human resource management, management purchase value, etc. Managerial decisions are now made based on technology, reports, and data.

 

Source: baodautu

Compiled by VietnamCredit

Tags: Vietnam industries, Vietnam companies, F&B industry, F&B trends, 2023 trends, industry forecast

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