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Vietnam’s food industry is evolving to meet the needs of “the new face of the Vietnamese consumer” after shifts in consumer class, demographics, and digitalisation, says McKinsey. Vietnam has remained a dominant force in manufacturing, largely due to its ongoing investment activity and recognised potential in food and drink new product developments (NPD).In 2023, revenue in Vietnam’s food scene is expected to grow to $93.06 billion (€87.4 bn), with a compound annual growth rate (CAGR) of 8.20% between 2023-2028. Confectionery and snacks comprise the largest segment within the Vietnamese food sector, amounting to a market volume in 2023 of $14.31 billion (€13.4 bn). In the food sector, 1.2% of total revenue is projected to come from online sales in 2023. The Southeast Asian country’s manufacturing market has been revered for its long history of positive growth, a McKinsey report indicates. Through the first 20 years of the century, it saw a CAGR increase of 5%, 1.7% faster than the global average’s increase. Despite Covid-19’s impact on the food industry, Vietnam still achieved 2.9% in gross domestic product (GDP) growth in 2020.The next phase of Vietnam’s food future shows no signs of slowing down, with research indicating the Southeast Asian country is in the midst of a ten-year $10 trillion (€9.3 trillion) consumption growth opportunity. However, while Vietnam’s success story is set to stay the same, its consumer is set to change.A new consumer has emerged in Vietnam. And so, as we move into the country’s latest food and beverage evolution phase, producers will need to examine how the country’s demographic landscape is shifting and subsequently shaping how they consume and what they demand from food manufacturers. One of the most significant changes in Vietnam is to its consuming class, which refers to the number of people who spend a minimum of $11 a day according to the country’s purchasing power parity (PPP) terms, a specific measurement of the price of food and beverages. By 2030, a potential 36 million more consumers may become part of the country’s PPP, representing almost 75% of Vietnam’s population. Today, this figureferrous fumarate how long to work is close to 40%, having increased frferroess 305mgom less than 10% in 2000. New consumers entering the class and income rises account for the growing consumption power. Urbanisation and subsequent income hikes play a more significant role in Vietnamese consumers’ spending. The two highest consuming class tiers, those that spend $30 or more a day, may make up a fifth of the population within the next decade. Urbanisation is leading to smaller households in Vietnam, changing how consumers shop and which goods they purchase. Other Asian markets have seen reduced household numbers resulting in new demands, which may impact consumption andferrous fumarate with folic acid purchasing patterns in Vietnam in a similar way. The senior demographic class is also set to increase, with over 17% of the population expected to be over 60 by 2030. Spending is projected to triple among seniors in this same period, too. Women’s economic empowerment is also changing the face of consumption. In 2019, Vietnam held one of the world’s highest female-to-male ratios in the workforce, at 88%. By 2030, female consumers may contribute an extra $80 billion to Vietnam’s GDP. © AdobeStock/wooooooojpnThe environment the consumer shops in is changing, too. Amid Covid-19, an increasing number of consumers have embraced digital tools, spurring new developments. A study found that 41% of all digital consumers in the country are new, and 91% planned to continue using their digital tools beyond the pandemic, the McKinsey report indicates. Online and mobile use to conduct research and commerce is expected to grow, with Generation Z and millennials accounting for approximately 40% of Vietnam’s consumption, McKinsey says. Consumer lifestyles and behaviour choices signal the importance of how brands treat wider society and the environment. In a consumer survey, 91% of Vietnamese participants said they are aware of and actively engaging in a conscious lifestyle, McKinsey research reveals. The figure is higher than Indonesia (86%), Malaysia (75%)galfer iron tablets 305mg and Thailand (73%).The potential for premiumisation exists too, with more consumers aware of sustainability and social responsibility. In the survey, 84% of Vietnamese participants said they are willing to pay a premium for conscious-lifestyle products. In Vietnam, 64% of consumers say they check product labels, which contain information including ingredients and nutrition, when shopping for food and drink, a survey by market intelligence company Mintel revealed. Results revealed that 61% of consumers in the Philippines would check food and beverage labels, while 56% of those in Thailand would.“Today, consumers want more control over their wellbeing,” said Heng Hong Tan, Food and Drink Analyst at Mintel APAC. “Food and drink brands have the complex task of conveying clear and reliable guidance so that a product will meet consumers’ health priorities,” Tan added. Clear on-pack labelling information relating to dietary requirements can provide this assurance. Vietnamese food and beverage manufacturers’ focus is on diversifying, modernising and digitising their product offerings. Producers will need to understand market developments and variations, communication demands and commit to localisation and agility to refiron glycinelect Vietnam’s new consumers.
Catering to the ‘new’ Vietnamese consumer
