Food processing is among the priority industries in Vietnam’s development plan
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Ly Kim Chi, chairwoman of the Food and Foodstuff Association of Ho Chi Minh City, said the country’s food and beverages sector has enjoyed strong growth in recent years, adding that the market is expected to maintain its high growth rate in the coming years and rank third in Asia.
Currently, food processing is one of the priority industries in the nation’s development plan, with initiatives to increase yield and the export value of agricultural and processed food products.
The Vietnamese food processing industry has been growing steadily at about 7 percent in the last five years. Annual food consumption value in the country was estimated to make up 15 percent of the GDP and the quantity also increases by approximately 10 percent per year, while beverage consumption grows at 6.66 percent per annum.
A report of Business Monitor International forecast that the growth speed of the food and beverage industry will maintain an annual dual growth of 10.9 per cent in 2017-2019 and consumption demand will focus on food and necessities, thanks to people’s increasing income and a trend of using high value products.
Food production and processing, especially milk, beverages, confectionery, and cooking oil, are seen as the most lucrative market segments. According to data from the Ministry of Industry and Trade (MoIT), fresh milk consumption is forecast to reach 27-28 liters per person per year in 2020; confectionery consumption will increase by 10 percent per year; cooking oil consumption will hit 17 kilogram in 2020 and 20 kilogram in 2025; beverage consumption will hit 6.8 billion liters in 2020 and 9.1 billion liters in 2025.
The potential of this sector lies not only in domestic consumption but also in exports. A diverse range of Vietnamese agricultural products are exported to over 100 nations and territories.
According to Do Thang Hai, Deputy Minister of Industry and Trade, Vietnam has abundant raw materials and is able to meet the demand of large-scale food processing enterprises.
The investment potential of the food processing industry is very big. This is an opportunity for foreign investors to break open the market. All Vietnamese enterprises, organizations, and localities should actively attract foreign investors to invest and co-operate in this sector, Hai emphasized.
The food and beverage industry has been getting the attention of both local and foreign investors. The divestment of some leading State-owned enterprises in the sector such as Vinamilk, Sabeco and Habeco has offered opportunities for foreign businesses to enter the potential market, while creating fierce competition, the Vietnam Report Company (VNR) said.
The food processing industry also needs co-operation and investment from foreign investors not only to enable Vietnamese food products to access bigger markets, but also to support domestic firms to innovate, build new quality standards, and develop Vietnamese food brands across the globe.
VNR’s survey revealed three trends in the food and beverage industry in the 2017-2018 period, such as development of new services and sale methods, both growth potential and competition and a trend to invest in clean food.
Specialists emphasized that businesses in the sector should be active and have suitable strategies with changes in the market, while maintaining their brand names.
