F&B Magazine Vol. 5 F&B Insight Asia Vol. 5 | Page 15

Structural trends

Net household incomes are set to increase by more than 53 % by 2021, as compared to the 2016 levels. As a result, consumer tastes and preferences are expected to shift towards higher-value food and beverage segments, which will be very likely to guarantee a receptive and growing audience for branded food and beverage products in the medium term.
Staples continue to account for the great majority of food purchases, which is consistent with low consumption levels. Bread, rice and cereals continue to account for more than 40 % of the Vietnamese total food sales. Whilst this is expected to remain the case throughout the forecasted period to 2021, currently underdeveloped categories, such as dairy products will experience rapid growth.
The massive potential provided by the burgeoning middle class in Vietnam is already attracting the sights of major consumer-facing players in the country. The on-going expansion of the mass grocery retail industry will drive up per capita food consumption levels, provided goods sold through such outlets remain competitively priced. Ultimately, food consumption growth will be driven by the government’ s ability to harness rural spending power and by modern retailers’ ability to find a model that stirs consumer interest, without forgetting that price will remain the major purchasing determinant.
As a regional manufacturing and trade hub, Vietnam’ s strong food processing sector is an on-going investment driver.

Vietnam food sales 2015- 2021f( VND billion)

2015
2016e
2017f
2018f
2019f
2020f
2021f
Food sales
433,374.3
473,314.8
530,426.9
592,562.1
657,719.4
730,096.3
809,725.1
% growth y-o-y
9.8
9.2
12.1
11.7
11.0
11.0
10.9
Bread, rice,
175,569.5
191,613.2
214,550.1
239,505.7
265,677.5
294,750.5
326,738.5
and cereals
% growth y-o-y
9.8
9.1
12
11.6
10.9
10.9
10.9
Pasta products
577.0
629.5
704.5
786.1
871.7
966.7
1,071.3
% growth y-o-y
9.7
9.1
11.9
11.6
10.9
10.9
10.8
Meat and
101,663.8
110,936.4
124,192.9
138,615.9
153,741.6
170,544.0
189,031.0
poultry products
% growth y-o-y
9.7
9.1
11.9
11.6
10.9
10.9
10.8
Fish and
46,623.8
51,286.3
57,955.7
65,215.6
72,832.1
81,295.6
90,609.9
fish products
% growth y-o-y
10.8
10.0
13.0
12.5
11.7
11.6
11.5
Dairy
8,093.8
8,852.5
9,937.4
11,117.8
12,356.0
13,731.5
15,245.1
% growth y-o-y
10.0
9.4
12.3
11.9
11.1
11.1
11.0
Oils and fats
14,306.9
15,644.5
17,557.0
19,638.1
21,820.9
24,245.8
26,914.0
% growth y-o-y
10.0
9.3
12.2
11.9
11.1
11.1
11.0
Fresh and
26,800.2
29,379.8
33,069.0
37,083.9
41,295.5
45,974.8
51,123.9
preserved fruits
% growth y-o-y
10.3
9.6
12.6
12.1
11.4
11.3
11.2
Fresh vegetables
24,107.9
26,364.7
29,588.5
33,092.5
36,763.5
40,837.9
45,316.9
% growth y-o-y
10.0
9.4
12.2
11.8
11.1
11.1
11.0
Sugar and
8203.9
8581.6
9129.1
9719.1
10331.0
11006.8
11745.6
sugar products
% growth y-o-y
4.8
4.6
6.4
6.5
6.3
6.5
6.7
Other food
27,427.3
30,026.3
33,742.9
37,787.4
42,029.6
46,742.8
51,929.0
% growth y-o-y
10.1
9.5
12.4
12.0
11.2
11.2
11.1
Source: BMI
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