Press Release

Vietnam Food Service Market to Grow with a CAGR of 10.75% through 2028

Vietnam Food Service Market is driven by a combination of factors such as rapid urbanization, changing lifestyles, rising disposable income, tourism, and technological advancements.

           

According to TechSci Research report, “Vietnam Food Service Market – By Region, Competition, Forecast and Opportunities, 2018-2028F”, the Vietnam Food Service Market stood at USD 20.52 billion in 2022 and is anticipated to grow with a CAGR of 10.75% in the forecast period, 2024-2028. Vietnam, a Southeast Asian country known for its lush landscapes, bustling cities, and rich cultural heritage, has made a name for itself in the global culinary scene. The Vietnam Food Service Market, a dynamic and ever-evolving sector, reflects the nation's deep-rooted love for food.  Vietnam's food culture has a long and storied history, dating back thousands of years. The nation's culinary traditions are deeply rooted in the ancient practices of growing and preparing food, which have been passed down through generations. A rich tapestry of influences from Chinese, French, and Southeast Asian cuisines has shaped the contemporary Vietnamese culinary landscape.

One of the most iconic dishes that exemplifies this fusion of culinary influences is "pho." This fragrant noodle soup, featuring a delicate broth, rice noodles, and tender slices of beef or chicken, is often considered Vietnam's national dish.

 

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Vietnam's culinary diversity is a hallmark of its food service market. The country is geographically divided into three regions: Northern, Central, and Southern Vietnam, each with its unique culinary traditions. The Northern region, with its cooler climate and fertile land, is famous for dishes like "bun cha" (grilled pork with vermicelli) and "bun thang" (Hanoi-style noodle soup). In Central Vietnam, the cuisine is characterized by bold and spicy flavors, with dishes like "bun bo Hue" (Hue-style beef noodle soup) and "banh xeo" (savory pancakes) taking center stage.

Southern Vietnam, with cities like Ho Chi Minh City and Vung Tau, holds a significant share in the Vietnam Food Service Market. Its unique blend of flavors reflects its multicultural history, with influences from Cambodia, India, China, and France. Southern Vietnamese cuisine is known for its freshness, vibrant herbs, and a balance of sweet, sour, and savory flavors. Iconic dishes include "pho nam" (Southern-style pho), "banh mi" (Vietnamese sandwich), and "com tam" (broken rice).

The Vietnam Food Service Market is fueled by various factors, making it a vibrant and evolving industry. Among these, rapid urbanization is a key driver. As cities grow and more people move into urban areas in search of better economic opportunities, the demand for dining out and convenience has surged. Urban dwellers often lead fast-paced lives, and this has led to an increase in restaurants, cafes, and eateries that cater to the need for quick, delicious, and diverse meals.

The rising disposable income of the population is another pivotal factor driving the market's growth. As people have more money to spend on dining experiences, they are willing to explore a wider range of culinary options, from traditional street food stalls to high-end restaurants. The willingness to experiment with new flavors and dining concepts has contributed to the proliferation of innovative food businesses in Vietnam.

Moreover, Vietnam's economic development, particularly in cities like Ho Chi Minh City, has significantly bolstered the food service market. These urban centers offer a conducive environment for the growth of the restaurant industry, with diverse business models such as fine dining, fast food, and casual dining establishments finding success.

Culinary tourism has gained prominence in Vietnam, attracting travelers from around the world. The country's unique and diverse cuisine, combined with its breathtaking landscapes and cultural heritage, has made it a culinary destination of choice. Tourists often embark on food tours, exploring local markets, street food stalls, and upscale restaurants to savor authentic Vietnamese flavors.

One of the most renowned culinary destinations in Vietnam is the Mekong Delta, often referred to as the "Rice Bowl of Vietnam." This fertile region, with its intricate network of rivers and canals, supplies an abundance of fresh produce, seafood, and rice, making it a treasure trove of ingredients for Vietnamese cuisine. Visitors can partake in cooking classes, where they learn to prepare traditional dishes using locally sourced ingredients.

The street food culture in Vietnam is a significant draw for culinary tourists. Vibrant street markets come alive at night, offering a tantalizing array of dishes, from "banh mi" and "goi cuon" (spring rolls) to "bun rieu cua" (crab noodle soup). These markets not only showcase the nation's culinary excellence but also serve as social hubs where locals and tourists come together to celebrate their love for food.

The availability of fresh, high-quality ingredients is a crucial aspect of Vietnam's food service market. The country's agricultural sector, with its fertile soil and favorable climate, plays a pivotal role in supplying fresh produce to restaurants and eateries. Rice, the staple food of Vietnam, is abundantly produced, ensuring a steady supply for various rice-based dishes.

The Mekong Delta is a primary source of rice and an essential agricultural region. It's not just rice; the delta also provides an abundance of fresh seafood, tropical fruits, and a wide variety of vegetables. This agricultural abundance fuels the creation of farm-to-table dining experiences, promoting sustainability and quality in the food service industry.

The sourcing of fresh seafood, including prawns, fish, and crabs, is a crucial aspect of Southern Vietnamese cuisine, particularly in coastal cities like Vung Tau. These cities have thriving fishing industries, ensuring a constant supply of seafood to meet the demands of the region's seafood-loving population.

Herbs and spices are fundamental to Vietnamese cuisine, contributing to its distinct and delightful flavors. Commonly used ingredients include cilantro, basil, mint, and lemongrass, all of which are grown locally and sourced fresh for daily culinary preparations.

While the Vietnam Food Service Market thrives, it is not without its challenges. The industry faces several obstacles that impact its growth and development.

One challenge is the increasing competition among food service establishments. As the market becomes more saturated, businesses must continually innovate to stand out and attract customers. This often leads to a rapid turnover of restaurants and eateries, as those unable to adapt to changing consumer preferences may struggle to survive.

The evolving food safety and hygiene regulations are another challenge. As consumers become more aware of food safety issues, they demand higher standards from food service providers. Adhering to these standards can be costly and complex for smaller businesses.

The recent global economic fluctuations have also impacted the industry. Inflation, supply chain disruptions, and fluctuating commodity prices can challenge the cost-effectiveness and stability of food service businesses.

However, challenges also bring opportunities. The rise of food delivery services, spurred on by the COVID-19 pandemic, has created a new market segment. Food delivery apps and platforms have made it easier for restaurants to reach a broader customer base, even during lockdowns and restrictions.

Innovations in culinary technology, including automation and digital menus, have the potential to streamline operations, reduce costs, and improve customer experiences.

The Vietnam Food Service market is segmented into type, ownership, brands, and region.

Based on type, PBCL has a significant share in the Vietnam food service market. First and foremost, PBCL venues offer a unique and diverse range of experiences for both locals and tourists. These establishments cater to different preferences, from lively nightclubs and bars serving craft cocktails to cozy lounges and traditional pubs where patrons can unwind over a cold beer.

Based on ownership, standalone outlets have a significant share in the Vietnam food service market. The popularity of standalone outlets can be attributed to several factors. First and foremost, they offer an authentic taste of Vietnamese cuisine, often prepared using time-honored recipes passed down through generations. These outlets are known for serving iconic dishes such as pho, banh mi, com tam, and goi cuon, providing locals and tourists with a genuine taste of Vietnam's culinary heritage.

 

Key market players in the Vietnam Food Service market include:

  • CP All PCL
  • Golden Gate JSC
  • Imex Pan Pacific Group
  • Jollibee Foods Corporation
  • Lotte GRS Co. Ltd
  • Mesa Group
  • Restaurant Brands International Inc.
  • Starbucks Corporation
  • The Al Fresco's Group Vietnam
  • Yum! Brands Inc.

 

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“The Vietnam Food Service Market is a thriving and dynamic sector that has witnessed remarkable growth in recent years. This robust industry is fueled by a combination of factors, making it a vital component of the country's economy. One of the primary drivers of this market is Vietnam's rapidly urbanizing population. As more people migrate to urban centers, there is a growing demand for convenient dining options, leading to a surge in the number of restaurants, cafes, and food delivery services. The increasing disposable income of the Vietnamese population is another crucial factor contributing to the market's expansion. With higher incomes, people are more willing to dine out and explore a variety of culinary experiences, including both local and international cuisines. This financial capacity has also led to a rise in the number of upscale dining establishments and luxury food offerings in the country.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based Global management consulting firm.

“Vietnam Food Service Market By Type (Dining Service (Hotels, Restaurants), PBCL (Pubs, Bars, Clubs and Lounges), QSR (Quick Service Restaurants), and Others (Cafeteria, Cloud Kitchen, Vending Companies)), By Ownership (Standalone Outlets and Chained Outlets), By Brands (Domestic and International Brands), By Region, Competition, Forecast and Opportunities, 2018-2028F”, has evaluated the future growth potential of Vietnam food service and provides statistics and information on market structure, size, share, and future growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Vietnam food service market.

 

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Vietnam Food Service Market By Type (Dining Service (Hotels, Restaurants), PBCL (Pubs, Bars, Clubs and Lounges), QSR (Quick Service Restaurants), Cafe, and Others), By Ownership (Standalone Outlets and Chained Outlets), By Brands (Domestic and International), By Region, Competition, Forecast & Opportunities,

Consumer Goods and Retail | Jun, 2024

Vietnam Food Service Market is driven by a combination of factors such as rapid urbanization, changing lifestyles, rising disposable income, tourism, and technological advancements.

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