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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