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VIETNAM FOOD & BEVERAGE

Historically, Vietnam relied primarily on agriculture as a source of output, but has shifted towards a more market-oriented economy since the initiation of the "Doi Moi” (renovation) socialist-economic reform in 1986 and joining the World Trade Organization in 2006. These market liberalizations have helped Vietnam become one of the fastest growing economies in the region with an annual GDP growth rate (CAGR) of 19.6% between 2005 and 2009. The Vietnamese population has benefitted from the strong economic growth. Their increasing affluence has stimulated consumer spending per capita, which rose by a CAGR of 19.7% between 2005 and 2009.


The Vietnamese economy is projected to be one of the fastest developing economies in Asia, largely propelled by having:

  • One of the youngest demographic profiles in Asia with high trainability; 68% of the country’s approximately 89 million people are under 40 years of age
  • The second-largest real GDP growth in the region over the past 10 years with average growth of 7.2%
  • One of the world’s leading markets for consumer confidence with retail sales CAGR of 14.0% over 10 years and private consumption accounting for 64.3% of GDP in 2010
  • An investment-intensive economy with investments accounting for 41.9% of GDP in 2010
  • Continued commitment from global investors with FDI disbursement increasing by 10% to US$11 billion in 2010
  • Structural reforms that have improved Vietnam’s business environment and have supported growth in foreign and private investment
  • A Generous endowment of natural resources including oil, minerals and productive land
  • Political stability and openness to foreign direct investment

The Vietnamese economy recovered strongly in 2009 from the global financial crisis with real GDP growth of 5.3% per annum, the third fastest in Asia after China and India. Looking forward, Vietnam is expected to achieve stable real GDP growth rate of 6.9% in 2011, underpinned by strong growth in consumption, investment and exports coupled with measures undertaken by the State Bank of Vietnam to curtail inflation.


The packaged food and beverage market is expected to grow to US$16 billion by 2015, from US$12 billion in 2010. Currently, local and regional companies control the market with a market share of ~80%, driven by consumers’ preference for local products. The consumer goods sector in Vietnam is under penetrated; on a per capita basis, spending on packaged foods and beverage is still relatively low compared to its emerging market peers. This is expected to grow as GDP per capita rises. In addition, other key growth drivers include:

  • A shift from unbranded to brand products
  • The emergence of modern trade;
  • A continued shift to premium products
  • Increasing demand for packaged/convenience foods
  • The rise of cold supply chain
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