Sector Trend Analysis – Packaged food trends in Vietnam

Market and consumer overview

The Vietnamese market is expected to experience a strong economic rebound post pandemic, supported by government plans and strong state finances. Approved in 2022, the Economic Recovery and Development Program, aims to bolster manufacturing output, whilst stronger external sector performance and supportive monetary policy and foreign investment add to the country's economic momentum. In addition, the Regional Comprehensive Economic Partnership (RCEP) came into force, creating a new Asia Pacific trading bloc between the ten ASEAN (Association of Southeast Asian Nations) countries, Australia, China, Japan, New Zealand and South Korea. The RCEP is expected to improve Vietnam's economic development and promote stronger trading relationships between members through tariff reductions and simplification of trading rules, which could also increase foreign direct investment (FDI) to Vietnam (Euromonitor International, PEST Analysis, July 2022).

Vietnam's largest city, Ho Chi Minh City, located within the Southeast region, will remain both the largest and fastest growing in terms of consumer expenditure over the forecast period, due to significant urbanisation and economic development. The region is set to account for 27.0% of total consumer expenditure by 2040. Food and non-alcoholic beverages are forecast to be the largest consumer spending category in 2040, while transport is anticipated to record the fastest growth over the 2021-2040 period (Euromonitor International, Income and Expenditure, September 2022).

Between 2022-2040, the Vietnamese consumer base is expected to be relatively young and wealthy as the population aged 40-44 are forecast to remain the highest income earners, and prevalent within the top-income band (those with gross income over US$250,001. The Middle Youth (aged 30-44) are expected to influence discretionary spending, driven by their increasing exposure to western culture. Vietnam is also expected to become a large consumer market as the population is anticipated to increase by 9.1% to reach 108 million, becoming the eighth largest country in the Asia Pacific region by 2040 (Euromonitor International, PEST Analysis, July 2022).

As noted in the Euromonitor Voice of the Consumer: Lifestyles Survey (fielded January-February 2023), most consumers appreciate innovation and look for new experiences; 68% of respondents, including 73% Millennials, say they extensively research the products and services they consume. Of those reported, 82% will only buy from companies and brands they trust completely. In addition, many consumers make their food choices based on perceived health as 54% of respondents report that they look for healthy ingredients in food and beverages, while 35% of Millennials are willing to pay more for foods that have health and nutritional benefits.

Retail Markets

Global retail sales of packaged food

The global market for packaged food has experienced positive growth with a moderate CAGR of 5.9% as retail value sales have increased from US$2.1 trillion in 2017 to US$2.8 trillion in 2022 and are expected to increase at an additional CAGR of 6.4% as retail sales are expected to reach US$3.8 trillion by 2027. The United States (U.S) was the largest global market for packaged food with retail sales of US$513.2 billion (18.6% market share), followed by China with values of US$347.2 billion (12.6% market share) and Japan, with retail sales of US$183.8 billion (6.7% market share) in 2022.

Vietnam was the twenty-seventh largest global retail sales market for packaged food (after Egypt and Sweden) with values of US$17.1 billion, representing a 0.6% market share in 2022. Vietnam experienced a moderate increase in CAGR of 9.2% as retail sales grew from US$11.0 billion in 2017 and is expected to further improve with an increase in CAGR of 8.7% in the forecast period as retail sales are anticipated to reach US$25.9 billion by 2027. Canada in comparison, was the twelfth largest retail sales market for packaged foods, accounting for a 2.0% market share with values of US$56.4 billion in 2022. Canada is expected to maintain its positive growth with an increase in CAGR of 4.5% in the forecast period as retail sales are expected to attain US$70.1 billion by 2027.

Market size of packaged food in Vietnam

According to Euromonitor International (Packaged Food in Vietnam, December 2020), the demand for packaged food in Vietnam had been growing, guided by increasing consumer confidence, rising premiumization and greater health and environmental consciousness. The emergence of the pandemic however, has further increased the demand for packaged food as more Vietnamese worked, studied and cooked from home. Staple foods such as rice and noodles, essential cooking ingredients including edible oils and convenient products such as frozen meals and dried packaged products were popular food items purchased by the consumer during home seclusion.

The packaged food market in Vietnam was valued at US$17.1 billion in 2022. During the 2017-2022 period, this market grew at a substantial CAGR of 9.2% from US$11.0 billion in 2017, with growth of 8.9% between 2019-2020 with the onset of the pandemic. The Vietnamese packaged food market has recently experienced increased growth (13.2%) between 2021 and 2022 as retail sales increased from US$15.1 billion in 2021. Of note, all packaged food product categories experienced positive growth within the historic period.

The top three packaged food categories in Vietnam, in terms of retail value sales in 2022, were dairy with values of US$4.2 billion (24.4% market share) increasing in CAGR by 9.3% from US$2.7 billion in 2017, followed by rice, pasta and noodles with values of US$2.6 billion (15.3% market share) increasing at a CAGR of 11.8% from US$1.5 billion in 2017 , and edible oils valued at US$2.4 billion (14.3% market share), and representing the largest increase in CAGR (15.3%) of all packaged food categories within the historic period as retail sales grew from US$1.2 billion in 2017.

During the forecast period, growth in the packaged food category will be supported by a growing positive outlook for the economy, a heightened awareness of the need to prioritize one's health and a return to busier lifestyles. By 2027, packaged food is expected to attain a CAGR of 8.7% as retail sales reach US$25.9 billion as all product categories are anticipated to experience positive growth in the forecast period. The savoury snacks and sweet biscuits, snack bars and fruit snacks categories in particular, are expected to perform the best with increases in CAGR of 12.5% and 11.0% each and achieving US$1.5 billion and US$1.0 billion respectively by 2027, while dairy is also expected to perform well, attaining an increase in CAGR of 10.5% with values of US$6.9 billion by 2027.

Competitive landscape

The Vietnamese packaged food market remained a highly fragmented industry throughout 2017 to 2022, accounting for a measurable representation of smaller, local companies. Vietnam Dairy Products JSC (Vinamilk), (Brand name; Vinamilk) was the largest packaged food company in Vietnam with retail sales of US$2.8 billion (16.2% market share) due primarily to its strength in dairy products and alternatives, while Wilmar International Ltd (Brand name; Simply, Cai Lan Vegetable Oil, Neptune and Meizan), the second largest packaged food company, attained US$973.6 million (5.7% market share) in 2022.

Private label companies in comparison, continue to show a minimal presence in the packaged food market with retail sales of US$4.6 million (0.0% market share) in 2022, increasing their total market share slightly from retail sales of US$2.5 million in 2017, while artisanal companies attained stronger retail sales of US$561.4 million (3.3% market share) in 2022, representing an increase in sales from US$373.8 million in 2017.

Distribution retail channels

The majority of Vietnam's packaged food market is distributed through grocery retailing versus non-grocery retailing. Grocery retailing (offline) of packaged food accounted for a 95.4% market share in 2022, increasing slightly from 94.3% held in 2017, while grocery retailing (online), e-commerce in particular, increased its market share representation to 0.7% in 2022, growing from 0.1% held in 2017. Further, within grocery retailing (offline), small local grocers and supermarkets were the predominant distribution channels for packaged food representing US$12.4 billion and US$1.8 billion each, with market shares of 72.3% and 10.5% respectively, in 2022. Of note, e-commerce experienced the largest increase in CAGR (77.0%) as retail sales of packaged food increased from US$6.8 million in 2017 to US$118.2 million in 2022.

Subsector Analysis

Cooking ingredients and meals

According to Euromonitor International, retail prices for cooking oil, fish and chili sauce are increasing due to the recent macroeconomic conditions (increases in production costs) created by the pandemic and the Russia-Ukraine war. Relatedly, consumers on average, have become more price sensitive due to decreased disposable incomes post pandemic and increased inflation in 2022. Despite these factors however, volume consumption remains relatively stable as cooking ingredient and meal products remain prominent in daily meals. Further, the health and wellness trend, first evident prior to the emergence of the pandemic, is expected to continue with the introduction of 'better-for-health' products initiated by key manufacturers, such as Masan Consumer Corp, who promoted its reduced-salt fish sauce under its Chin-Su brand. Independent small grocers remain the largest distribution channel for the cooking ingredient and meal category as these small shops can be found on most street corners in both rural and urban areas (Euromonitor International; Cooking Ingredients and Meals in Vietnam, 2022).

In the forecast period, consumers of the cooking ingredients and meal category are increasingly willing to try new flavours as Westernisation influences have integrated the market, especially with younger and affluent consumers, while naturally health options without artificial ingredients, additives and preservatives are growing (Euromonitor International; Cooking Ingredients and Meals in Vietnam, 2022).

Edible oils

The Vietnamese edible oil market was the third largest packaged food category in Vietnam. The category grew at a measurable CAGR of 15.3% during the 2017-2022 period, increasing in retail sales from US$1.2 billion in 2017 to US$2.4 billion in 2022. Other edible oils was the largest edible oil category with retail value sales of US$1.6 billion (64.7% edible oil market share) in 2022, while sunflower oil achieved the best performance, expanding 65.1% between 2021 and 2022 as retail sales increased from US$39.2 million to US$64.7 million and experienced an increase in CAGR (18.9%) in the historic period (US$27.2 million in 2017 to US$64.7 million in 2022). Of interest, the production costs of palm oil, a key cooking ingredient for example, has increased - compounded by Indonesia's (as the largest palm oil exporter) recent palm oil export ban in 2022.

The edible oil market is forecast to remain positive with a CAGR of 8.1% as retail sales are anticipated to reach US$3.6 billion by 2027. In the edible oil competitive landscape, Wilmar International Ltd (Brand names : Simply, Cai Lan Vegetable oil, Neptune and Meizan) led sales with a market share of 39.8%, followed by Kido Group (Brand names: Tuong, Marvela and Ong Tao) with a market share of 16.7% and Vocarimex-National Co for vegetable oils, cosmetics and Aromas of Vietnam (Brand name: Nakydaco) with a market share of 2.4% in 2022.

Meals and soups

Meals and soups (ready meals) experienced continued growth at a CAGR of 9.9% during the historic period attaining retail sales of US$176.9 million in 2022. The market is expected to expand at a CAGR of 9.4% in the forecast period, reaching retail sales of US$277.5 million by 2027. Saigon Trading Group (Brand name: Vissan), Asia Foods Corp (Brand name: Gau Do ) and CJ Corp (Brand name: Cau Tre) were the leading ready meal companies in Vietnam, accounting for a combined 57.5% market share of ready meal sales in 2022.

Sauces, dips and condiments

The sauces, dips and condiments market grew measurably at a CAGR of 6.3% during the 2017-2022 period, with total retail sales valued at US$1.6 billion in 2022. Sauces was the largest of the sauces, dips and condiment category with retail value sales of US$1.1 billion (66.6% market share) in 2022, while pickled products experienced the largest increase in CAGR (8.1%) as retail sales increased from US$14.8 million in 2017 to US$21.8 million in 2022.

The sauces, dips and condiments sector is expected to see a moderate growth with a CAGR of 7.3% during the forecast period and is anticipated to be valued at US$2.3 billion by 2027. Masan Group Corp (Brand names: Nam Ngu, Chin-Su, Nam Ngu II and Tam Thai Tu) and Ajinomoto Co Inc (Brand names: Ajinomoto, Aji-ngon, Aji-Mayo, Aji-Quick and Phu Si) were the two leading companies, representing 30.1% and 16.2% of this market, respectively, in 2022.

Sweet spreads

The sweet spreads market experienced substantial growth at a CAGR of 10.1% from 2017 to 2022, achieving retail sales of US$14.9 million in 2022. Jams and preserves was the largest of the sweet spreads category with retail value sales of US$6.9 million (46.3% market share) in 2022, while honey was the best performing category in the historic period attaining a CAGR of 15.3% as retail sales increased from US$3.0 million to US$6.1 million in 2022.

The sweet spread market is expected to see continued growth at a CAGR of 10.4% during the forecast period anticipating retail sales of US$24.4 million by 2027. Angel Camacho Alimentacion SL (Brand name: Fragata) was the leading spread company in Vietnam with a market share of 17.4%, followed by Golden Farm Co Ltd (Brand name: Golden Farm) with a market share of 16.8% in 2022.

Dairy products and alternatives

As reported in Euromonitor International, retail prices of dairy products and alternatives have risen in 2022 due to inflation and supply shortages incurred by the pandemic and Russia's invasion of Ukraine, as dairy production in Vietnam is predominantly dependent on imported ingredients and materials. Despite these price sensitivities, most consumers continue to purchase dairy products, as they are perceived as an important source of nutrition, and in doing so, support the development of Vietnam's dairy industry. In the forecast period, consumers are expected to increase their dairy product consumption on average, as manufacturers develop additional products to boost immunity as well as support bone and joint health and growth in children (Euromonitor International; Dairy Products and Alternatives in Vietnam, September 2022).

Baby food

The Vietnamese baby food market grew by a CAGR of 4.2% during the 2017-2022 period, increasing in retail sales from US$1.5 billion in 2017 to US$1.9 billion in 2022. Of interest, products that support brain development remain a priority while milk formula products which claim to support and enhance a baby's immune system have increased in demand (Euromonitor International; Baby food in Vietnam, September 2022). Milk formula was the largest baby food category with retail value sales of US$1.6 billion (84.6% of baby food market share) in 2022, while prepared baby food was the best performing category, increasing in CAGR by 13.1% as retail sales grew from US$10.1 million in 2017 to US$18.7 million in 2022

The baby food market is forecast to remain positive with a CAGR of 7.7% with retail sales anticipated to reach US$2.7 billion by 2027, as baby food is considered an essential product by parents, despite increasing price sensitivities often regulated by the consumer's choice of baby food product. Further, retail volume sales are predicted to witness increasing growth as consumers return to their busy lifestyles post pandemic. Of note, other baby food increased significantly (20.0%) from US$0.5 million in 2022 and is expected to reach US$0.6 million by 2023 as this category offers an expanding range of convenient products for time-pressed parents and will be driven by more affluent Vietnamese parents in urban areas. (Euromonitor International; Baby food in Vietnam, September 2022). In the baby food competitive landscape, Vietnam Dairy Products JSC (Vinamilk) (Brand names : Dielac, Ridielac and Optimum Gold) led sales with a market share of 27.2%, followed by Nutifood Nutrition Food JSC (Brand names: GrowPLUS+ and Nuti) with a market share of 18.7% and Abbott Laboratories Inc (Brand names: Similac, PediaSure and Grow) with a market share of 16.7% in 2022.

Dairy

The dairy category was the largest packaged food category in Vietnam with retail sale values of US$4.2 billion in 2022, and experienced a moderate increase in CAGR of 9.3% from retail sales of US$2.7 billion in 2017, as milk and milk products in general, are perceived as an essential food and an important source of nutrition, supporting growth and development in both children an adults (Euromonitor International; Drinking Milk Products in Vietnam, September 2022). Drinking milk products was the largest dairy category with retail sales of US$2.6 billion (63.4% market share of dairy products) in 2022, as the category offered more product options with reduced sugar and fat content. Of interest, other drinking milk products such as full fat shelf stable milk remain most popular in Vietnam as its format offers greater convenience to local consumers, many of whom do not have required refrigerated storage and can therefore, purchase this product in bulk due to its longer shelf life, in comparison to the smaller, category of fresh milk. However, production costs and retail prices of drinking milk products have also increased in 2022, due to the pandemic and Russia's war in Ukraine, causing some consumers to have reduced their intake or substituted with cheaper products and brands (Euromonitor International, Drinking Milk Products in Vietnam, September 2022).

The yoghurt and sour milk products was the second largest dairy category and experienced the largest CAGR of 11.9% as retail sales grew from US$553.4 million in 2017 to US$971.3 million in 2022, as yoghurt retail sales in particular, continued to benefit from their versatility in use for cooking and snacking and their digestive and immune boosting properties, in addition to reduced sugar and fat product variants. Drinking yoghurt in particular, remains the most dynamic as it offers a convenient consumption format and the benefits of probiotics, while plain yoghurt remains the most popular for its incorporation into a variety of dishes and desserts (Euromonitor International; Yoghurt and Sour milk Products in Vietnam, September 2022).

Butter and spreads, and cheese, remain the smaller categories within dairy products and alternatives in Vietnam as these products are not traditionally used in local cuisine. Nevertheless, increasing Westernisation, and the greater adoption of different global foods and cultures, with younger generations in particular, has increased interest in trying dairy products like cheese, in different varieties and formats. The expansion of Western foodservice brands such as Pizza Hut and McDonald's has strengthened this interest (Euromonitor International; Cheese in Vietnam, September 2022). Relatedly, the use of margarine and spreads has begun to expand as consumers develop an appreciation for its versatility for baking and cooking especially as the increasing demand for Western-style dishes is expected to continue (Euromonitor International; Butter and Spreads in Vietnam, September 2022).

The dairy market is expected to expand at a larger CAGR of 10.5% in the forecast period, reaching retail sales of US$6.9 billion by 2027, as more domestic players are investing in the dairy industry through the development of cow farms, funding for product research and development, and applying modern production technology. These investments are likely to make dairy producers more competitive, while consumers will benefit from more choice (Euromonitor International; Yoghurt and Sour milk Products in Vietnam, September 2022). In terms of competitive landscape, Vietnam Dairy Products JSC (Vinamilk) (Brand names: Vinamilk, Ngoi Sao Phuong Nam, Ong Tho, Susu, Probi, Dielac and Moc Chau), was the leading dairy company in Vietnam, accounting for a 53.0% market share in 2022.

Plant-based dairy

The plant-based dairy (milk) market grew slightly a CAGR of 1.6% during the 2017-2022 period, with total retail sales valued at US$239.1 million (3.8% market share of dairy products and alternatives) in 2022, as the category remains a predominantly niche grouping. Soy drinks accounted for most of the retail sales of plant-based dairy in Vietnam however, this segment has not been immune to supply shortages and increasing prices prompting consumers to search for more affordable alternatives, such as drinking milk products. Further, as plant-based diets are a growing trend in many international markets, Vietnam's current interest and investment remains limited, rendering the development of plant-based yoghurt and cheese offerings challenging. Recently however, Vinasoy has launched a plant-based drinking yoghurt signifying the first plant-based yoghurt brand to receive wide distribution and promotion within the retail market (Euromonitor International; Plant-Based Dairy in Vietnam, September 2022).

Other plant-based dairy (milk) products which include products based on almonds, oats, hemp, coconut and rice, among other ingredients) also remain a niche market (however it is becoming more established as new products become available) with high and mid-income consumers that prioritize healthier alternatives, including those who are lactose intolerant or vegan (Euromonitor International; Plant-Based Dairy in Vietnam, September 2022).

The plant-based dairy sector is expected to experience increased growth with a CAGR of 5.4% during the forecast period and is anticipated to be valued at US$310.7 million by 2027, as the awareness of the benefits of plant-based diets, and the range of products available, strengthens and as consumers become more cognizant of the importance of sustainability and animal welfare, reflected in their selection of products, broadens (Euromonitor International; Plant-Based Dairy in Vietnam, September 2022) With respect to the competitive landscape, Quang Ngai Sugar JSC (Brand names: Fami and Vinasoy) held a majority of the market share (57.6%), while Vietnam Dairy Products JSC (Vinamilk) (Brand names: Vinamilk, GoldSoy and VFresh ) maintained a 16.1% market share in 2022.

Staple foods

The staple food market has witnessed increases in production costs for products such as instant noodles, and processed meat, seafood and alternatives to meat. Consumers in response, have become more conscientious in their spending as some have elected to reduce their consumption or seek cheaper alternatives. Recent noted trends in staple foods have been the popularity of home cooking as the preferred economical, nutritious, and safer option in relation to dining out or purchasing mass-produced food, in addition to the greater diversification of new, and available product portfolios. Of interest, Vietnamese consumers have developed a strong habit of shopping for fresh food for incorporation in their daily meals, and as such, staple food products such as chilled or frozen food, are more likely to be bought during daily shopping trips for inclusion in meals. In the forecast period, staple foods are expected to continue to be influenced by consumer health and wellness awareness (Euromonitor International; Staple Foods in Vietnam, November, 2022).

Baked goods

The Vietnamese baked goods market grew by a moderate increase in CAGR of 8.6% during the 2017-2022 period, increasing in retail sales from US$770.0 million in 2017 to US$1.2 billion in 2022. Many types of baked goods are consumed not as meals but as snacks that temporarily satisfy hunger, especially when on the go or at work or school (Euromonitor International; Baked Goods in Vietnam, November 2022).

Cakes were the largest baked good category with retail value sales of US$644.2 million (55.4% market share) in 2022, expanding 11.5% from US$577.8 million in 2021, and was the best performing category of baked goods attaining a CAGR of 9.6% in the historic period as retail sales grew from US$407.9 million in 2017.

In the forecast period, baked goods is expected to expand at a CAGR of 6.9% reaching US$1.6 billion by 2027 as the range of health focused products continue to expand, including products with reduced salt, sugar or fat content and products that are fortified with vitamins, minerals and other functional ingredients (Euromonitor International; Baked Goods in Vietnam, November 2022). With respect to competition, Orion Group (Brand name: Orion) was the largest baked good company in Vietnam, accounting for a 16.8% market share, while Mondelez International Inc (Brand names: Kinh Do and Solite) and Huu Nghi Food JSC (Brand name: Staff), accounted for a 15.7% and 5.3% market share respectively, in 2022.

Breakfast cereals

The breakfast cereal category experienced significant growth at a CAGR of 14.0% during the historic period attaining retail sales of US$17.9 million in 2022. The market is expected to expand at a CAGR of 7.7% between 2022 and 2027, reaching retail sales of US$25.9 million by 2027. Cereal Partners Worldwide SA (Brand names: Milo, KoKo Krunch, Nestlé and Stars) and Kellogg Co (Brand names: Kellogg's Coco Pops/Corn Flakes/Special K/Müslix/Nutri-Grain/All Bran) were the two leading companies, representing 40.2% and 25.7% of this market, respectively, in 2022.

Processed fruit and vegetables

Processed fruit and vegetables (shelf stable) experienced measured growth at a CAGR of 4.1% during the historic period attaining retail sales of US$16.6 million in 2022, as fresh fruit and vegetables are readily available and perceived as superior (and better tasting), in comparison to processed fruit and vegetables, which are mainly purchased by busy urban consumers. Consumer interest in processed fruit and vegetables is strengthening however, as these processed products are not as susceptible to seasonal variations as fresh produce, making them a suitable option. In addition, as reported in Euromonitor International, Vietnam's free trade agreements with the EU, ASEAN and Canada (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership - CPTPP), enable various imported products such as processed fruit and vegetables, accessible (through reduced and/or eliminated tariffs) to the Vietnamese consumer. A related advantage of the agreements is the availability of those fruits and vegetables (such as blackberries and cranberries), unable to be grown in Vietnam due to unfavourable climate conditions, are now accessible to local consumers. As a result, Vietnamese consumers are enjoying greater exposure to new, foreign fruit and vegetables, in addition to new ways of preparing and consuming them (Euromonitor International; Processed Fruit and Vegetables in Vietnam, November 2022).

The forecast for the processed fruit and vegetable market is expected to expand at an increased CAGR of 5.7% between 2022 and 2027, reaching retail sales of US$21.9 million by 2027. Itochu Corp (Brand name: Dole), Kikkoman Corp (Brand name: Del Monte) and Kronos SA (Brand name: Kronos) were the leading processed fruit and vegetable companies in Vietnam, accounting for a combined 49.5% market share in 2022.

Processed meat, seafood and alternatives to meat

The processed meat, seafood and alternatives to meat category grew measurably at a CAGR of 8.5% during the historic period, with total retail sales valued at US$506.7 million in 2022. High rates of inflation have impacted consumption and spending within this category as many consumers have chosen more affordable alternatives or consume less. Of note, although the consumer believes that fresh meat and seafood are better (healthier and tastier), the demand for processed meat and seafood has been increasing due to product convenience in preparation and packaging.

Processed seafood was the largest of the processed meat, seafood and alternatives category with retail value sales of US$255.1 million (50.3% market share) in 2022, and experienced the largest increase in CAGR (9.9%) in the historic period, as retail sales increased from US$159.2 million in 2017.

The processed meat, seafood and alternatives to meat sector is expected to experience moderate growth with a CAGR of 8.0% during the forecast period as retail sales are anticipated to reach US$743.5 million by 2027, as the 'Feed-Farm-Food' model for advocating safe and sustainable products gains traction (Euromonitor International; Processed Meat, Seafood and Alternatives to Meat in Vietnam, November 2022). Saigon Trading Group (SATRA) (Brand name: Vissan) and Royal Food Co Ltd (Brand names: Three Lady Cooks) were the two leading companies, representing 19.7% and 15.8% of this market respectively, in 2022.

Rice, pasta and noodles

The rice, pasta and noodle category was the second largest packaged food category in Vietnam with retail sale values of US$2.6 billion in 2022, and experienced a moderate increase in CAGR of 11.8% from retail sales of US$1.5 billion in 2017. The category has not been immune to rising production costs due to recent increases in raw material prices (wheat powder in particular), and global supply issues. As a result, consumer consumption patterns have evolved as more consumers are choosing more affordable, but not necessarily healthier options, such as instant noodles. (Euromonitor International; Rice, Pasta and Noodles in Vietnam, November 2022).

Noodles was the largest segment of the rice, pasta and noodles category with retail values of US$1.7 billion (64.3% market share) in 2022, increasing in CAGR by 11.3% from US$983.5 million in 2017, while rice was the best performing category within the historic period, increasing in CAGR by 12.7% from US$502.6 million in 2017 to US$913.6 million in 2022.

In the forecast period, the rice, past and noodle category is anticipated to increase by a CAGR of 6.5% to reach US$3.6 billion by 2027, as consumers become more knowledgeable and health conscious in their food choices, prompting greater product innovation, including novel flavours and health-oriented positioning (Euromonitor International; Rice, Pasta and Noodles in Vietnam, November 2022). In terms of competitive landscape, Ace Cook Co Ltd (Brand names: Hao Hao, Vina Acecook, Hao 100, Modern, Tao Quan and Mien Phu Huong Yen Tiec ) and Masan Group Corp (Brand names: Omachi and Kokomi) were the two leading companies, representing 21.6% and 13.4% of this market, respectively, in 2022.

Snacks

The snack category in Vietnam was impacted by the pandemic as public gatherings and social distancing regulations prevented on-the-go consumption, while increased manufacturers' costs and less consumer disposable income, impeded impulse, and nonessential purchases. Key noted snack trends according to Euromonitor International, were new product flavourings such as Matcha Green Tea in Celano's ice cream, aligned with children and young adults as the primary target audience. Health and wellness is also gradually becoming more prominent in the category, especially snacks made from natural ingredients like nuts and fruits. Snacks (and healthier snacks) are anticipated to maintain moderate growth over the forecast period as the Vietnam economy recovers and more manufacturers enter the industry. (Euromonitor International; Snacks in Vietnam, July 2022).

Confectionery

The Vietnamese confectionery market grew by a moderate increase in CAGR of 6.9% during the 2017-2022 period, increasing in retail sales from US$470.1 million in 2017 to US$655.4 million in 2022. Sugar confectionery was the largest category with retail value sales of US$391.0 million (59.7% of confectionery market share) in 2022, expanding 8.3% from US$361.1 million in 2021, as more health conscious consumers in particular, opted for 'reduced sugar' rather than 'zero sugar' options since most consumers remain unwilling to give up the sweet taste of sugar-based products (Euromonitor International; Sugar Confectionery in Vietnam, July 2022).

Chocolate confectionery was the best performing segment of confectionery products attaining a CAGR of 8.8% in the historic period as retail sales grew from US$88.3 million in 2017 to US$134.8 million in 2022.

In the forecast period, confectionery is expected to expand at a CAGR of 9.9% reaching US$1.1 billion by 2027. With respect to competition, the Vietnamese confectionery market remained fragmented in the historic period. Mars Inc (Top Brand names: Doublemint, Cool Air and M&M's) was the largest confectionery company in Vietnam, accounting for a 13.1% market share, while Perfetti Van Melle Group (Top Brand names: Happydent, Chupa Chups, Mentos and Golia ) and Lotte Group (Brand names: Lotte, Guylian and Anytime), accounted for a 11.4% and 8.4% market share respectively, in 2022.

Ice cream

The ice cream category experienced continued growth at a CAGR of 8.0% during the historic period attaining retail sales of US$181.6 million in 2022, as ice cream is perceived by most consumers, as an affordable indulgence and the ideal way to treat oneself, especially given the hot climate conditions inherent to the country (Euromonitor International; Ice Cream in Vietnam, July 2022).

The market is expected to expand at an additional CAGR of 10.2% between 2022 and 2027, reaching retail sales of US$294.7 million by 2027, as the growing interest in take-home ice cream expands due to rising household penetration of refrigeration appliances, while impulse ice cream is anticipated to benefit with the return of tourists post pandemic (Euromonitor International; Ice Cream in Vietnam, July 2022). Kido Group (Brand names: Merino, Celano and Wel Yo ) was the prominent manufacturer in the ice cream category with a 45.9% market share, followed by Unilever Group (Brand names: Cornetto, Paddle Pop and Wall's) reporting a 11.5% market share in 2022.

Savoury Snacks

The savoury snack market increased by a moderate CAGR of 10.1% during the historic period, attaining retail sales of US$834.7 million in 2022, driven predominantly by impulse purchases, especially for on-the-go-consumption (Euromonitor International; Savoury Snacks in Vietnam, July 2022). Salty snacks was the largest category with retail sales of US$513.4 million (61.5% market share of the savoury snack category) in 2022 and experienced a CAGR of 9.8% as retail sales grew from US$321.5 million in 2017, while other savoury snacks was the best performing category in the historic period attaining a CAGR of 23.3%, increasing from $US6.8 million in 2017 to US$19.4 million in 2022, improving 24.4% from US$15.6 million in 2021.

The savoury snack sector increased by 10.6% between 2021 and 2022 and is expected to experience moderate growth at a CAGR of 12.5% during the forecast period, reaching retail sales of US$1.5 billion by 2027, led by increased consumer interest in wellbeing and immunity and those products containing natural ingredients. As such, it is in the competitor's best interest to (further) develop healthier types of savoury snack product options (Euromonitor International; Savoury Snacks in Vietnam, July 2022). In terms of competitive landscape, sales in the savoury snack sector are fragmented as Orion Group (Brand names: Toonies, Ostar, Marine Boy, An and Khoai Tayo!) and Mondelez International Inc (Brand names: AFC, Slide, Ritz, Kinh Do and Sachi) were the top companies representing market shares of 20.5% and 16.2% respectively, in 2022.

Sweet biscuits, snack bars and fruit snacks

The sweet biscuits, snack bars and fruit snack category experienced a measurable increase in CAGR of 10.7% in the historic period, increasing from US$367.1 million in 2017 to US$611.1 million in 2022. Sweet biscuits represented the largest segment of sweet snacks with retail sales of US$575.1 million (representing a 94.1% market share) in 2022, while fruit snacks was the best performing category increasing in retail sales growth by 14.6% from US$18.2 million to US$36.0 million from 2017 to 2022. Despite the accelerating growth of fruit snacks, sweets biscuits is expected to remain the larger category in sweet biscuits, snack bars and fruit snacks, driven mostly by sales of plain biscuits. Plain biscuits are mainly sold in boxes of mixed and plain biscuits, allowing consumers to try different types of biscuits through the purchase of one product (Euromonitor International; Sweet Biscuits, Snack Bars and Fruit Snacks in Vietnam, July 2022).

The sweet biscuits, snack bars and fruit snack market is expected to increase by a CAGR of 11.0% between 2022 and 2027, reaching retail sales of US$1.0 billion by 2027, as healthier products including products that are lower in sugar, gluten-free, fat-free, fortified are sought. The sweet biscuits, snack bars and fruit snack market in Vietnam is fragmented and led predominantly by international companies perceived to offer higher quality and better tasting products (Euromonitor International; Sweet Biscuits, Snack Bars and Fruit Snacks in Vietnam, July 2022). Mondelez International Inc (Brand names: Cosy, Oreo, LU, ) was the primary manufacturer, representing a 16.9% market share, followed by Danish Specialty Foods ApS (Brand name: Danisa) with a 11.6% market share in 2022. The sweet biscuits market in particular, is further represented by Mondelez International Inc (Brand names: Cosy, Oreo and LU) with a 18.1% market share in 2022.

Opportunities for Canada

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force on December 30, 2018 (in the first six countries to have ratified the agreement: Canada, Australia, Japan, Mexico, New Zealand, and Singapore), and is a free trade agreement between Canada and 10 other countries in the Asia-Pacific. The agreement is currently in force among 10 countries: Canada, Australia, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. For the remaining signatory - Brunei the CPTPP will enter into force 60 days after they have ratified the agreement.

The CPTPP will give Canadian agriculture and agri-food products preferential market access to all CPTPP countries. As the CPTPP is implemented, tariffs will be eliminated or reduced on a wide range of Canadian exports for the agricultural sector, including meat, grains, pulses, maple syrup, wines and spirits, seafood, and agri-food products.

Export and import tariff information related to Canadian and Vietnamese trade is available through Canada Tariff Finder, including preferential tariff rates and the phasing out period of such tariffs, where applicable. Further, tariff preferences under CPTPP apply to goods imported from Canada that meet chapter 3 - rules of origin/origin procedures.

New product launch analysis

According to Mintel's Global New Products Database (GNPD), there were 18,266 packaged food products launched in the Vietnam market from 2017 to 2022. The number of yearly product launches has increased in growth by a CAGR of 1.4% from a launch of 2,983 packaged food products in 2017 to its most recent launch of 3,192 packaged food products in 2022. Of note, new product launches of packaged food experienced the largest increase in growth rate (11.2%) from 2021 to 2022 as product launches increased from 2,870 to 3.192 products and contracted in growth by 6.7% from 3,206 products released in 2019 to 2,992 products in 2020.

The predominant categories of packaged food products released were snacks (4,009 products), bakery (2,429 products) and processed fish, meat and egg products (2,428 products). The most popular product claim was ease of use (8,237 products), followed by no additives/preservatives (4,158 products) and free from added/artificial preservatives with (3,481 products). The companies with the highest number of new product launches was Vietnam Dairy Products Joint Stock Company with (304 products), followed by Saigon Co.Op / Saigon Co-Op (302 products) and Lotte (301 products). Just over one third (34.3%) of the product launches were new packaging (6,265 products), whereas 32.5% were new products (5,943 products). The top five packaging types included flexible packaging (7,717 products), flexible stand-up pouch (1,511 products) jar (1,273 products), bottle (1,240 products) and skinpack (1,200 products).

Examples of new products

For more information

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For additional information on the upcoming event, the Canadian Delicacies Program, please contact:

The Trade Commissioner Service in Vietnam
agriculture-vietnam@international.gc.ca

Resources

• Euromonitor International, 2023:
  • Country Report: Baby Food in Vietnam, September 13, 2022
  • Country Report: Baked Goods in Vietnam, November 2022
  • Country Report: Cheese in Vietnam, September 2022
  • Country Report: Cooking Ingredients and Meals in Vietnam, November 2022
  • Country Report: Dairy Products and Alternatives in Vietnam, September 13, 2022
  • Country Report: Drinking Milk Products in Vietnam, September 2022
  • Country Report: Ice Cream in Vietnam, July 2022
  • Country Report: Income and Expenditure, September 2, 2022
  • Country Report: PEST Analysis: Vietnam, July 4, 2022
  • Country Report: Plant-Based Dairy in Vietnam, September 2022
  • Country Report: Processed Meat, Seafood and Alternatives to Meat in Vietnam, November 2022
  • Country Report: Savoury Snacks in Vietnam, July 2022
  • Country Report: Snacks in Vietnam, July 2022
  • Country Report: Staple Foods in Vietnam, November 24, 2022
  • Country Report: Sugar Confectionery in Vietnam, July 2022
  • Country Report: Sweet Biscuits, Snack Bars and Fruit Snacks in Vietnam, July 2022
  • Country Report: Yoghurt and Sour milk Products in Vietnam, September 2022
  • Vietnam in 2020: The Future Demographic, August 2020
• Global Affairs Canada; About the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
• Global Trade Tracker, 2023
• Mintel Global New Products Database, 2023

Sector Trend Analysis – Packaged food trends in Vietnam
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Analyst

© His Majesty the King in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2023).

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