Over 170 companies from 30 countries participated in the Food Ingredients Vietnam 2024 exhibition, held on October 9 in Ho Chi Minh City, to explore opportunities for cooperation and market penetration in Vietnam.

Food market entices foreign business, Source: Fi Vietnam

Pippa Hackett, Ireland’s Minister of State at the Department of Agriculture, Food, and the Marine, representing her country’s trade delegation, noted that many Irish companies attending the exhibition were keen to explore the Vietnamese market and diversify their export plans.

“Vietnam’s rapid economic growth, young population, and rising demand for high-quality products, particularly in the food and beverage (F&B) sector, present a significant opportunity. Our strict production standards mean our products are well-positioned to meet the needs of Vietnamese consumers,” Hackett said.

She added that in addition to dairy, meat, and seafood, Ireland would soon be preparing to export frozen fresh beef to Vietnam.

Ireland’s export turnover to Vietnam in 2023 exceeded $27 million, with dairy and dairy products accounting for over $20.5 million, seafood $4.3 million, and processed meat $1.08 million. Southeast Asia is seen as a high-potential export market for Ireland, with total exports to the region reaching $372.3 million in 2023, driven primarily by dairy products.

Jim O’Toole, CEO of the Irish Food Board, remarked that Southeast Asia is a key new market for Irish food exports. Ireland has set a target of $865.87 million in F&B exports to Southeast Asia in 2025, with dairy and meat leading the way.

According to O’Toole, Ireland’s dairy products exported to Vietnam benefit from the free trade agreement between Vietnam and the EU. “Ireland is committed to providing safe, high-quality products, offering Vietnamese consumers more choices. We are seeing an increase in demand for premium dairy and lobster products in Vietnam compared to previous years,” he said.

The Vietnamese food market, which is growing at an average annual rate of 10-12 per cent, is increasingly viewed as an attractive opportunity for both domestic and foreign businesses, according to the Ministry of Industry and Trade.

Taku Tanaka, CEO and co-founder of KAMEREO, a business-to-business platform supplying food in Vietnam, said that many international brands are eager to expand in the country.

“I’ve been in touch with major F&B companies from Japan, and they’re exploring multiple locations to open stores. Some are considering opening 50 to 100 outlets in the next decade, reflecting their long-term confidence in this market,” Tanaka said.

In 2023, Vietnam’s F&B market reached a size of $96.47 billion, according to Statista, with the confectionery and snack segment capturing the largest share at 14.6 per cent, accounting for nearly $14.2 billion.

A survey conducted by Vietnam Report in September revealed that many F&B companies achieved impressive revenue and profit growth in 2023. The percentage of businesses reporting revenue growth increased from 66.7 per cent in 2022 to 93.3 per cent last year. From August 2022 to August 2023, these businesses saw revenue and profit growth of 35 per cent and nearly 42 per cent, respectively.

Scott James, consul-general and trade commissioner of New Zealand to Vietnam, commented on the strong recovery of the F&B sector, attributing this to the recovery of consumption and the launch of new products. He also highlighted the role of Vietnam’s high GDP growth projections in boosting market confidence.

Other factors that influence the F&B sector include the rise of Gen Z as a new consumer group, the growing trend of multichannel business models, and increased demand for health-conscious and natural products.

Between 2017 and 2023, two-way trade between Vietnam and New Zealand grew by nearly 53.8 per cent to $1.67 billion, supported by free trade deals. James emphasised that strong cooperation and the vast potential of the Vietnamese market will allow New Zealand to further boost exports of key products such as meat, fruit, wine, and seafood to Vietnam.

“Currently, around 60 per cent of New Zealand businesses operating in Vietnam are in the F&B sector. In March, both countries agreed on an ambitious bilateral trade goal of $3 billion by 2026, compared to $1.67 billion in 2023,” James said.

According to Euromonitor International, Vietnam’s F&B industry ranks as one of the most attractive markets globally and is 10th in Asia. Vietnamese consumers allocate approximately 35 per cent of their income to food and drinks, and this number is rising as affluence grows.

The Ministry of Industry and Trade forecasts that the revenue of the F&B industry will grow by 11 per cent in 2024, reaching over $30 billion. The sector is also one of the key industries selected by the government for priority development in the period from 2025 to 2035, underscoring its importance to Vietnam’s future economic landscape.