Before 2020, Vietnam's food and beverage (F&B) industry continuously grow, and its market is assessed to be full of potential. The compound annual growth rate from 2021 to 2025 is 4.98%. The market size is anticipated to reach 678 million USD, with the number of consumers predicted to reach 17.1 million by 2025.
However, the COVID-19 pandemic has caused many companies in the F&B industry to face dire problems. The fourth pandemic outbreak dealt a blow on the industry, hindering its growth until recently when pandemic prevention methods are lifted.
Vietnam’s F&B industry aims to co-exist with the COVID-19 pandemic and adapt to the new normal. Even then, its recovery rate is still quite modest.
According to the General Statistics Office, the revenue of food services nationwide last month reached 25,900 billion VND, up 48.5% compared to September. Some provinces have high food and accommodation services recovery rates, such as Binh Dinh increased by 78.3%, Hanoi increased by 94.1%, Khanh Hoa increased 127.5%, and Can Tho increased 239.6%.
However, compared with the period before the social distancing period in many localities, the recovery momentum of the foodservice industry in the whole country is not high in general.
Most F&B segments, such as small businesses, restaurant chains, etc., have recorded a slow or partial recovery because customers are still very cautious when eating out.
For the F&B industry to return to the way it was before April 2021, many argue that it will take more time since investors are still hesitant and uncertain about the future. The risks waiting to make many people hesitate to invest and expand businesses.
Starbucks Vietnam believes that the recovery of the F&B industry will depend on the vaccination progress. The prospect of the F&B industry will be bright if the whole population gets 100% first vaccination shot by the end of 2021.
According to experts, what causes hardship for F&B businesses is the problem of decreasing revenue but increasing costs. This contradiction and paradox are what make the F&B sector only recover modestly.
In addition, the situation of financial exhaustion due to a long time of social distancing has made the F&B business less competitive in the future. When the cash flow is not as abundant as before, living with the COVID-19 epidemic makes many F&B business people afraid of running promotions, discounts, giving gifts to customers, etc.
New F&B trends appear as a result of the impact made by COVID-19. F&B brands are adapting to those new trends to get back on track.
Currently, businesses are determined to live safely with the virus. Companies are familiarizing themselves with new characteristics of the market formed during the process of adapting to the pandemic by building a flexible way of working and investing more into technology, adopting new ways to serve customers, etc.
Assessing the industry's outlook in the last months of 2021, 78% of enterprises think that the end of the year will be more difficult, double the 37% of the previous year. However, up to 80% of enterprises in the industry expressed confidence in the quick recovery of Vietnam after the pandemic.
The International Monetary Fund (IMF) forecast that Vietnam's GDP growth this year will be about 3.8% in the World Economic Outlook report. That is a very positive growth rate in the context that the country is struggling to fight the pandemic while developing the economy.
The current outbreaks are gradually under control, creating momentum for an economic recovery in the fourth quarter of 2021. The recovery phase will also be supported by accelerating the mass vaccination campaign, with at least 70% of the adult population being vaccinated by mid-2022, helping to prevent new outbreaks.
Therefore, the recovery time for production and business activities of F&B enterprises is also forecasted positively. 47% of enterprises estimated to recover in six months, 33% of enterprises from 7-12 months, and 13% after more than 12 months.
Compiled by VietnamCredit