Section III. Market Sector Structur

Section III. Market Sector Structure and Trends:
With a large, young consumer base, an improving per capita income and strong economic growth, Vietnam’s best consumer years are still ahead and prospects for faster expansion of the retail, food service and food processing sectors in the next few years are very promising.

According to the Vietnam Ministry of Industry and Trade, Vietnam currently has more than 9,000 traditional markets, accounting for about 80 percent of total country consumer good sales. The best way to enter the Vietnamese market is to develop a relationship with one of the established food trading and distribution companies who are able to extend the distribution network to not only supermarkets, hotels and restaurants, but also wet/open-air markets and “mom and pop” retail shops. Currently, there is only a handful of well-organized food trading and/or distribution companies in Vietnam; so the selection process does not take too long. There is typically some sort of foreign involvement in each of the better- known companies. As these companies tend to be somewhat transient, it is advisable to visit Vietnam and research the company’s customer lists and achievements.

Most chefs and hotel food and beverage managers in the top hotels in Vietnam are from Australia or
Europe, and they tend to promote their home recipes and ingredients, so the HRI sector has a strong preference for products from these countries. Australian products also enjoy advantages from lower tariff rates due to the ASEAN-New Zealand and Australia FTA, shorter delivery time, and cheaper freight. U.S. products tend to be newer to the market, which may or may not be an advantage depending on consumer knowledge of how to use the product. In-store promotions are popular and are a recommended part of an advertising campaign. Point of purchase (POP) displays and other advertising materials are important to attract local consumers that may have a limited knowledge of foreign food products.

While major urban areas (HCMC, Hanoi, Hai Phong, Danang, and Can Tho) have a growing number of modern outlets, much of the country still relies heavily on traditional marketing channels. Small “mom and pop” shops and wet markets continue to play a major role in food distribution.

Retail Sector
Strong economic growth and improved per capita income have contributed to the robust expansion of Vietnam’s retail trade. According to GSO Vietnam, nationwide retail sales of goods and services in 2014 continued to enjoy a high growth rate of 10.6 percent. In 2013, consumption of food and beverage in Vietnam was estimated at about USD 42.8 billion, equivalent to 40% of total consumption and Compound Annual Growth Rate (CAGR) grew about 11% over the period 2012 – 2013.

Although traditional retail outlets still dominate the retail food sector, Vietnam’s retail industry is steadily transitioning away from traditional outlets to the more modern mini-marts, supermarkets, hypermarkets and wholesale centers. Modern retail channels have grown tremendously in the last twelve years, from only a few supermarkets in 1999/2000 to nearly over 421 supermarkets, 23 hypermarkets, 19 wholesale centers and 362 convenience stores (Euromonitor), and the indicators for further development are strong. As a result of Vietnam’s WTO commitments, on January 1, 2009, the retail business sector was fully opened to foreign entities. Some major foreign retail chains (Dairy Farm, Lotte Mart, Casino Guichard-Perrachon SA, NTUC Fairprice Co-operatives Ltd, and Aeon) have already set up their stores in Vietnam and others have closely studied the market for future investment.

Rapid growth of modern trade in Vietnam’s retailing sector continues to be fueled by strong economic growth, rising income levels (especially disposable income), a growing middle class, an increasing young population and increasing exposure to a western lifestyle. Over the last seven years, modern trade in Vietnam has grown at an average rate of 20 percent a year and it is expected to continue at this level for the next five years.

Operators in the modern retail food sector are likely to contend with the following:
• Shelf life labeling regulations that can be both costly and challenging for food importers
/distributors and inventory controllers.
• Supermarkets rely heavily on merchandising services offered by importers/distributors.
• Many supermarkets also earn significant revenues from suppliers in the form of listing fees, shelf space rentals and various fees and discounts.
• It is not unusual for major supermarket chains to receive up to 45 day credit terms from their suppliers.
• Promotional and advertising activities often have an impact on sales.

Further growth and sophistication in the retail sector will create additional opportunities for U.S food exporters. Local importers still continue to play a major role in the introduction, distribution, and promotion of imported food products in Vietnam.

Please refer to GAIN report VM3062 for further information about Vietnam Retail Food Sector.


Food Processing Sector
Vietnam’s food processing and beverage industry continued to grow in 2014, expanding 5.1 percent in the food processing sector, versus a 6 percent growth rate in 2013; and 10 percent in the beverage sector, from 8.8 percent in 2013, according to data provided by Vietnam’s General Statistics Office (GSO) at 2010 prices. At current prices, Vietnam’s food and beverage industry is growing fast at almost 21 percent in 2013, with food production growing at 20 percent, and beverage production growing by almost 27 percent. With more transparent regulations and less burdensome paperwork, the Government of Vietnam has successfully attracted not only foreign investors but also local investors into Vietnam’s food processing industry. Vietnam has also tried to protect local food manufacturers by imposing high import tariffs (from 15 to 40 percent) on selected food imports that compete with locally produced products (edible oil, confectionery, snack foods, juices, ice cream etc.).

Dairy products (Fresh milk, UHT milk, ice cream, yogurt etc.), condiments, canned foods (meat, seafood, fruits and vegetable), bakery products, snack foods (potato chips, grain-based snacks, dehydrated fruits and vegetables, etc.), juices, confectionery (biscuits, cookies, candy, chocolate etc.) and hot sauces are all produced locally with acceptable quality. However, consumer-oriented food products manufactured in Vietnam still strongly rely on imported food ingredients and additives.

Most large local manufacturers have Good Manufacturing Practice Certificates or the equivalent (ISO 9002, HACCP). U.S. food ingredients with the best prospects include dairy products (milk powder, whey and lactose for bakeries, dairy and confectionary manufacturing), seafood (for further processing and re-exports), meat (pork and chicken meat for meat processing), poultry MDM (for sausages), lysine (for meat processing), dehydrated potato powder (for snack foods), dried fruits and nuts (for bakeries), concentrated juices (for juice manufacturing), sweeteners, and flavorings. Please refer to GAIN report VM5006 for additional information on Vietnam’s Food Processing Ingredients

Food Service Sector
Average disposable income per capita in Vietnam was reported at $1,334 in real terms in 2014
(Euromonitor), which is significantly lower than other countries in the region, such as Thailand and the Philippines. For this reason, foodservice in Vietnam tends to be on a much smaller scale. Moreover, as only 30 percent of the population lives in urban areas where foodservice is more accessible, the total demand for foodservice is also limited. Foodservice outlets are chiefly in the form of small restaurants, cafés and beer garden type restaurants, which serve mostly local products. Foodservice outlet chains are still in their infancy and there are only a few locations present in the market. Management of foodservice chains is weak, thus hampering development and expansion. Management issues aside, the sector is expanding as it responds to strong economic growth, strong tourism growth, rising income levels (particularly disposable income), a growing middle class, a sizeable young population, and an increasing exposure to a Western lifestyle.

The global economic recession and tension between China and Vietnam caused by the Haiyang Shiyou 981 oil rig badly affected the Vietnam tourism industry. According to GSO Vietnam, the country welcomed about 7.9 millions of international tourists in 2014, up 4% over 2013. This figure is apparently much lower than the average growth rate of 18% that the sector enjoyed in the past four years
Vietnam’s HRI food service sector consists of over 540,000 outlets including over 430,000 street stalls/kiosks; 7,000 fast-food restaurants; 80,000 full-service restaurants; 22,000 cafeterias/bars; and more than 12,500 hotels and resorts. The total consumer food service sales in Vietnam achieved an average growth of 8.8 percent per year during 2005-2011, and are forecast to grow at a slower, but still strong, rate of 5 percent during the next five years. Despite the recent worldwide economic slowdown and Vietnam economic slowdown, the outlook for high-value food and beverage exports to Vietnam is still very promising.

Results (Vietnamese) 1:

Phần III. Thị trường ngành cấu trúc và các xu hướng:Với người tiêu dùng lớn, trẻ cơ sở, một thu nhập bình quân đầu người cải thiện và tăng trưởng kinh tế mạnh mẽ, người tiêu dùng tốt nhất Việt Nam năm vẫn còn phía trước và khách hàng tiềm năng cho việc mở rộng nhanh hơn bán lẻ, Dịch vụ thực phẩm và thực phẩm chế biến các lĩnh vực trong kế tiếp vài năm là rất hứa hẹn.Theo bộ công nghiệp Việt Nam và thương mại, Việt Nam hiện nay có hơn 9.000 thị trường truyền thống, chiếm khoảng 80 phần trăm của tất cả các quốc gia người tiêu dùng bán hàng tốt. Cách tốt nhất để vào thị trường Việt Nam là phát triển một mối quan hệ với một trong những thành lập thực phẩm kinh doanh và phân phối công ty có thể mở rộng mạng lưới phân phối không chỉ siêu thị, khách sạn và nhà hàng, nhưng cũng ướt/mở-khí thị trường và cửa hàng bán lẻ "mẹ và pop". Hiện nay, đó là chỉ một số ít các công ty thương mại và/hoặc phân phối thực phẩm được tổ chức tại Việt Nam; quá trình lựa chọn không mất quá lâu. Thường là một số loại nước ngoài tham gia trong mỗi của các công ty tốt hơn được biết đến. Như các công ty này có xu hướng phần nào thoáng qua, đó là khuyến khích để truy cập vào Việt Nam và nghiên cứu sách khách hàng và những thành tựu của công ty.Hầu hết các đầu bếp và người quản lý thực phẩm và đồ uống khách sạn trong những khách sạn hàng đầu ở Việt Nam từ Úc hoặcChâu Âu, và họ có xu hướng để thúc đẩy các công thức nấu ăn nhà của họ và các thành phần, do đó, ngành HRI có một sở thích mạnh mẽ cho các sản phẩm từ các quốc gia này. Úc sản phẩm cũng tận hưởng lợi thế từ tỷ lệ thuế thấp hơn do ASEAN-New Zealand và Úc FTA, thời gian giao hàng ngắn hơn và rẻ hơn vận chuyển hàng hóa. Sản phẩm Mỹ có xu hướng mới hơn để thị trường, mà có thể hoặc có thể không có một lợi thế tùy thuộc vào người tiêu dùng kiến thức về làm thế nào để sử dụng sản phẩm. Chương trình khuyến mại trong cửa hàng phổ biến và là một phần được đề nghị của một chiến dịch quảng cáo. Điểm mua (POP) Hiển thị và các tài liệu quảng cáo khác rất quan trọng để thu hút người tiêu dùng địa phương có thể có một kiến thức hạn chế của nước ngoài thực phẩm.Trong khi chính khu vực đô thị (TP. Hồ Chí Minh, Hà Nội, Hải Phòng, Đà Nẵng, và cần thơ) có một số ngày càng tăng của các cửa hàng hiện đại, phần lớn đất nước vẫn còn dựa chủ yếu vào kênh tiếp thị truyền thống. Nhỏ "mẹ và pop" mua sắm và ẩm ướt thị trường tiếp tục chơi một vai trò quan trọng trong phân phối thực phẩm.Lĩnh vực bán lẻTăng trưởng kinh tế mạnh mẽ và cải thiện thu nhập bình quân đầu người đã góp phần vào sự mở rộng mạnh mẽ của kinh doanh bán lẻ của Việt Nam. Theo GSO Việt Nam, doanh thu bán lẻ trên toàn quốc của hàng hoá và dịch vụ vào năm 2014 tiếp tục tận hưởng một tỷ lệ tăng trưởng cao 10.6%. Vào năm 2013, tiêu thụ thực phẩm và nước giải khát Việt Nam ước về 42,8 tỷ USD, tương đương với 40% của tất cả các tiêu thụ và hợp chất hàng năm tăng trưởng tỷ lệ (bình quân hàng năm) đã tăng trưởng khoảng 11% so với kỳ 2012-2013.Mặc dù cửa hàng bán lẻ truyền thống vẫn thống trị lĩnh vực bán lẻ thực phẩm, ngành bán lẻ Việt Nam đều chuyển đi từ các cửa hàng truyền thống hiện đại hơn mini-marts, siêu thị, hypermarkets và bán buôn trung tâm. Kênh bán lẻ hiện đại đã trưởng thành rất nhiều trong mười hai năm qua, từ chỉ một vài siêu thị trong 1999/2000 đến gần hơn 421 siêu thị, 23 hypermarkets, 19 Trung tâm bán buôn và cửa hàng tiện lợi 362 (Euromonitor), và các chỉ số cho phát triển rất mạnh. Là kết quả của các cam kết gia nhập WTO của Việt Nam, ngày 1 tháng 1 năm 2009, lĩnh vực kinh doanh bán lẻ được hoàn toàn mở cửa cho cơ quan nước ngoài. Một số chuỗi bán lẻ nước ngoài lớn (trang trại chăn nuôi bò sữa, Lotte Mart, Casino Guichard – Perrachon SA, NTUC Fairprice đồng HTX Ltd và Aeon) đã đã thiết lập cửa hàng của họ ở Việt Nam và những người khác đã chặt chẽ nghiên cứu thị trường cho đầu tư trong tương lai.Tăng trưởng nhanh chóng của các thương mại hiện đại trong lĩnh vực bán lẻ của Việt Nam tiếp tục được thúc đẩy bởi tăng trưởng kinh tế mạnh mẽ, tăng mức thu nhập (đặc biệt là thu nhập dùng một lần), một tầng lớp trung lưu ngày càng tăng, một dân số trẻ ngày càng tăng và ngày càng tăng tiếp xúc với một lối sống phương Tây. Trong bảy năm qua, các thương mại hiện đại ở Việt Nam đã phát triển ở mức trung bình 20 phần trăm một năm và nó dự kiến sẽ tiếp tục ở cấp độ này trong năm năm tiếp theo.Nhà điều hành trong lĩnh vực thực phẩm bán lẻ hiện đại có khả năng để contend với các điều sau đây:• Shelf life labeling regulations that can be both costly and challenging for food importers/distributors and inventory controllers.• Supermarkets rely heavily on merchandising services offered by importers/distributors.• Many supermarkets also earn significant revenues from suppliers in the form of listing fees, shelf space rentals and various fees and discounts.• It is not unusual for major supermarket chains to receive up to 45 day credit terms from their suppliers.• Promotional and advertising activities often have an impact on sales.Further growth and sophistication in the retail sector will create additional opportunities for U.S food exporters. Local importers still continue to play a major role in the introduction, distribution, and promotion of imported food products in Vietnam.Please refer to GAIN report VM3062 for further information about Vietnam Retail Food Sector.Food Processing SectorVietnam’s food processing and beverage industry continued to grow in 2014, expanding 5.1 percent in the food processing sector, versus a 6 percent growth rate in 2013; and 10 percent in the beverage sector, from 8.8 percent in 2013, according to data provided by Vietnam’s General Statistics Office (GSO) at 2010 prices. At current prices, Vietnam’s food and beverage industry is growing fast at almost 21 percent in 2013, with food production growing at 20 percent, and beverage production growing by almost 27 percent. With more transparent regulations and less burdensome paperwork, the Government of Vietnam has successfully attracted not only foreign investors but also local investors into Vietnam’s food processing industry. Vietnam has also tried to protect local food manufacturers by imposing high import tariffs (from 15 to 40 percent) on selected food imports that compete with locally produced products (edible oil, confectionery, snack foods, juices, ice cream etc.).Dairy products (Fresh milk, UHT milk, ice cream, yogurt etc.), condiments, canned foods (meat, seafood, fruits and vegetable), bakery products, snack foods (potato chips, grain-based snacks, dehydrated fruits and vegetables, etc.), juices, confectionery (biscuits, cookies, candy, chocolate etc.) and hot sauces are all produced locally with acceptable quality. However, consumer-oriented food products manufactured in Vietnam still strongly rely on imported food ingredients and additives.Most large local manufacturers have Good Manufacturing Practice Certificates or the equivalent (ISO 9002, HACCP). U.S. food ingredients with the best prospects include dairy products (milk powder, whey and lactose for bakeries, dairy and confectionary manufacturing), seafood (for further processing and re-exports), meat (pork and chicken meat for meat processing), poultry MDM (for sausages), lysine (for meat processing), dehydrated potato powder (for snack foods), dried fruits and nuts (for bakeries), concentrated juices (for juice manufacturing), sweeteners, and flavorings. Please refer to GAIN report VM5006 for additional information on Vietnam’s Food Processing IngredientsFood Service SectorAverage disposable income per capita in Vietnam was reported at $1,334 in real terms in 2014(Euromonitor), which is significantly lower than other countries in the region, such as Thailand and the Philippines. For this reason, foodservice in Vietnam tends to be on a much smaller scale. Moreover, as only 30 percent of the population lives in urban areas where foodservice is more accessible, the total demand for foodservice is also limited. Foodservice outlets are chiefly in the form of small restaurants, cafés and beer garden type restaurants, which serve mostly local products. Foodservice outlet chains are still in their infancy and there are only a few locations present in the market. Management of foodservice chains is weak, thus hampering development and expansion. Management issues aside, the sector is expanding as it responds to strong economic growth, strong tourism growth, rising income levels (particularly disposable income), a growing middle class, a sizeable young population, and an increasing exposure to a Western lifestyle.The global economic recession and tension between China and Vietnam caused by the Haiyang Shiyou 981 oil rig badly affected the Vietnam tourism industry. According to GSO Vietnam, the country welcomed about 7.9 millions of international tourists in 2014, up 4% over 2013. This figure is apparently much lower than the average growth rate of 18% that the sector enjoyed in the past four yearsVietnam’s HRI food service sector consists of over 540,000 outlets including over 430,000 street stalls/kiosks; 7,000 fast-food restaurants; 80,000 full-service restaurants; 22,000 cafeterias/bars; and more than 12,500 hotels and resorts. The total consumer food service sales in Vietnam achieved an average growth of 8.8 percent per year during 2005-2011, and are forecast to grow at a slower, but still strong, rate of 5 percent during the next five years. Despite the recent worldwide economic slowdown and Vietnam economic slowdown, the outlook for high-value food and beverage exports to Vietnam is still very promising.