In 2024, the value of the food and beverage (F&B) market in Vietnam is expected to increase by 10.92% compared to 2023, generating revenues of over VND655 trillion (US$26.1 billion).

Despite the economic challenges, the survey found that around 80% of businesses in Vietnam remain positive and have the resources to grow in the future, with nearly 52% planning to expand.

The value of Vietnam's F&B market is expected to grow by 10.92% this year compared to 2023. Photo: iPos.vn

The latest F&B Market Report in Vietnam, published by iPhos.vn, underlined this prediction when it surveyed nearly 3,000 restaurants and eateries.

Based on research from nearly 4,000 customers, the report shows a slight increase in people's spending. Notably, over 68% of the F&B industry's revenue comes from restaurant services. Consumers are also spending more on dining services rather than special occasions, with the beverage business accounting for 16.52% of the revenue structure.

By the end of 2023, F&B industry revenue rose 11.47%, reaching a total of over VND590 trillion ($23.6 billion). Specifically, the dine-in market contributed VND538.5 trillion ($21.6 billion), an increase of 10.87% compared to 2022.

Vietnamese consumers are increasing their spending on dining out by 5-10%. In fact, 14.9% of customers are willing to spend more than VND100,000 (US$4) on daily dinners, which is 3.5 times higher than in 2022.

At the same time, Vietnamese spending on coffee has also increased slightly, with 59.5% of customers willing to spend more than VND41,000 ($1.6) on this activity. Of those surveyed, 42.6% choose to go out once or twice a month, 30.4% go out once or twice a week, an increase of almost 8% from 2022, and 6.1% of respondents go out daily.

According to Euromonitor, the value of the Vietnamese F&B market is expected to increase by 10.92% by 2023. After a strong recovery and growth, the industry will continue to develop at a compound annual growth rate of 10.25% between 2023 and 2027, reaching an estimated value of VND872.9 trillion ($34.9 billion) in 2027.

In the restaurant services segment, revenues from chain stores are forecast to grow faster over the period 2023-2027, with a compound annual growth rate of 14.6%, while independent F&B stores will experience a growth rate of 12.52%.

Although Vietnam's economy faced many challenges in 2023, the F&B market still managed to grow by 11.6%, just over half the 19.7% growth recorded in 2022, the F&B report said, indicating positive consumer spending on F&B services.

Gen Z - F&B potential customers

Over the past few years, Generation Z has emerged as one of the most dominant consumer groups in the market. In addition, the segment is not only adventurous, but also willing to spend, according to local insiders.

Curious and hungry for new experiences, Gen Z is always looking for something new, highly creative and willing to pay for it. Ngo Nguyen Kha, CEO of beverage chain The Coffee House, emphasizes the importance of convenience for takeaway customers. The chain is also developing innovative packaging solutions to prevent spills and keep drinks intact. They also provide dedicated staff to assist delivery personnel to ensure customer satisfaction.

"Attention to even the smallest details gives customers a sense of being cared for and enhances their overall experience," he told Mekong Asian emagazine.

But this generation has a low level of product and brand loyalty. Therefore, tapping into consumer trends and retaining Gen Z customers has become a goal for many F&B brands.

The report found that by 2024, there will be strong development of medium and small size beverage models. This growth will be in line with the trends of convenience and suitability to meet the needs of young consumers.

These stores are opened with criteria such as reasonable investment costs, convenient locations for take-away and delivery, and product prices in the mid-range and affordable segments.

There is also a growing trend for high-end restaurants to compete for Michelin stars.

Mindful of the importance of this award, many F&B brands are making efforts to improve food quality, enhance services and perfect the customer experience in order to win the prestigious "Michelin star".

This competition not only benefits Vietnamese diners, but also serves as a powerful lever for restaurants to put themselves on the international culinary map.

What's more, tourism indirectly boosts Vietnam's F&B revenues, which grew at an impressive rate by 2023, according to Nguyen Thai Binh, an F&B expert. He explained that they are witnessing a strong comeback of international tourists. In 2023, the largest tourist groups were from South Korea, Europe and the US. These tourists spend generously on F&B services in Vietnam.

Tourists are meticulous and spend time researching on major international food platforms such as TripAdvisor, Michelin Guide, and even using Google Maps to check community reviews before deciding what to experience," he pointed out.