F&B industry to reach 30 billion USD in 2024

The Ministry of Industry and Trade (MoIT) forecasts that the revenue of the food and beverage (F&B) industry will grow by 10.92% this year, reaching more than 720 trillion VND (29.8 billion USD).

A survey by Vietnam Report from July - August this year, shows that 62.5% of businesses expect the F&B industry to grow by 5-10% this year.

This is a sharp increase in business optimism about the prospects of the F&B market with the rate increasing from 61.6% to 87.6%.

Optimistic signals about the improvement of the F&B industry also come from the financial situation of consumers.

The survey results show that up to 52.7% of consumers believe that their income will improve slightly and 21.8% will improve significantly in the next 12 months.

In addition, Decree No. 74/2024/ND-CP regulating the regional minimum wage, effective from July this year, will continue to contribute to the growth of the F&B industry in the coming time when the year-end spending season is approaching.

To reap the 'sweet fruit' of the expansion that they expect, businesses have been steadily overcoming a series of consecutive challenges.

Compared to a year ago, concerns about weak purchasing power or rising inflation have cooled down significantly, giving way to concerns related to changes in consumer behaviour and large inventories.

Up to 72.2% of F&B businesses surveyed said that changes in consumer behaviour were one of the biggest difficulties this year. This rate has increased sharply from 37.5% in 2022 to 75% this year.

The majority of consumers today, in addition to being concerned about price and product quality, also place great importance on sustainability, health safety and corporate social responsibility. They tend to prioritise green, organic products with clear origins.

At the same time, the popularity of e-commerce and online shopping trends have also changed the way products are accessed, forcing businesses to invest in digital sales channels to maintain a competitive advantage.

The constant changes in consumer preferences and needs required businesses to be flexible, to constantly innovate and to update strategies to meet market expectations, said the report.

In addition to changes in consumer behaviour, 44.4% of enterprises said that large inventories were posing challenges for enterprises.

Due to unpredictable market fluctuations, many companies have stockpiled goods in large quantities to cope with disruptions in the supply chain and fluctuations in consumption. However, this leads to great pressure on storage costs, inventory management and especially the risk of product value reduction when goods are stored for too long, especially for items with short shelf lives.

Moreover, a large inventory can make it difficult for companies to adjust their production and respond flexibly to new consumer trends.

Despite many difficulties, there are still many drivers to support businesses in their future prospects, the first being the development of e-commerce.

The second driving force comes from the strong recovery of tourism. As many as 50% of F&B businesses choose this as one of the main growth drivers this year.