Food & Hotel Vietnam is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726

Will the F&B industry be “immune” to volatility?

Illustrated image: TL.

According to Rong Viet Securities Company (VDSC), due to the non-cyclical nature of food and beverage (F&B) products that consumers cannot cut down regardless of financial situation, the industry Vietnamese food and beverage is expected to show an upward trend in sales despite the difficulties in 2023, including high interest rates, rising unemployment rate or weak purchasing power. “We believe that the total sales of the industry will not be too volatile in 2023,” VDSC acknowledged.

Vietnam’s retail sales in the third quarter of 2022 reached VND 1,137 trillion, not only 40% higher than the third quarter of 2021 but also higher than the pre-pandemic level. In addition, this index also increased slightly in November 2022 to reach 397 trillion dong (or 16 billion USD; up 4.7% over the previous month; up 18.1% over the same period last year). The peak shopping season of the F&B industry falls in the fourth quarter and the first quarter is around Christmas and New Year holidays. Therefore, VDSC thinks that food and beverage consumption will increase.

Another advantage for the F&B industry is the expectation of a recovery from foreign tourists. In 2022, global tourism activity has not yet fully recovered due to the COVID-19 pandemic (blockade policy in China for example) and Ukraine-Russia tensions. VDSC believes that these problems will ease in the second quarter of 2023, boosting global tourism to increase again. The recovery of foreign tourist traffic, especially China, will boost sales.

Selling price will be a big influence on purchasing decisions in 2023

According to Kantar Worldpanel, the average selling price of FMCG products has started to increase since the first quarter of 2022, with the strongest increase in the second and third quarters of 2022. As consumption demand is expected to be stable, selling price will be the driving force for growth in 2023.

Although the price increase in rural areas is higher than in urban areas, the increase in consumption output is also higher.

VDSC believes that rising selling prices will limit spending on high-end products in the context of tight spending. Vietnamese consumers will continue to spend on essential F&B products, but some of them will prefer more popular brands like Vinamilk or Kinh Do. Therefore, companies with diverse product portfolios from affordable to high-end segments will have better business performance.

Besides, an unusual development is occurring: although the price increase in rural areas is higher than in urban areas, the increase in consumption output is also higher. Therefore, VDSC considers that rural people are less sensitive to price increases than urban residents. This could be a result of tourism activities or a wave of people moving back to live in the countryside after COVID-19. Therefore, companies with large distribution networks will gain more profits.

Source: Nhip Cau Dau Tu

Share this post

Must Read


You may be interested in

Starbucks and a decade-long struggle to conquer Vietnamese consumers
By the end of 2022, the number of Starbucks stores in Vietnam has not reached 100 units,...
The company recommended not imposing a separate consumption tax on sugary beverages.
Businesses argue that sugary drinks are not related to obesity, so they recommend not including...
Having spent over 270 million USD to acquire Phuc Long, Masan only gained a meager profit of 38 billion VND from it.
Although spending billions of Vietnamese dong to own up to 85% of the shares of Phuc Long, the tea...
Vietnam Airlines resumes cooperation with Air France from March 26th
Nguyen Tien Hoang, head of Vietnam Airlines’ branches in France and Europe, said he would...
Fruit, vegetable exports rise 17.8%
Durians are sold at a market in Ho Chi Minh City. Photo by VnExpress/Hong ChauVietnam’s fruit...
Opportunities to boost export of processed foodstuff to Asia -Pacific, African markets
The Ministry of Industry and Trade (MoIT) hosted a conference with Vietnamese trade representative...
Kido establishes a subsidiary to produce fish sauce, wants every kitchen shelf to have more seasoning powder, soy sauce, fish sauce from Kido
Kido contributed 196 billion VND to TA Foods and Spices, equivalent to 98% ownership. This is a...
The battle of Thais in the Vietnamese energy drink market: “Golden bull” Red Bull fights “Green buffalo” Carabao
In the energy drink market, if Red Bull is a powerful old “Golden Bull”, Carabao is...

Subscribe to Our eNewsletters