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For Italian companies that wish to export to Vietnam In the food and beverage sector, opportunities are growing. In 2023, exports of food, beverage and tobacco products reached a volume of 94 million euros.
The data reflects the positive state of the F&B sector in Vietnam, which recorded robust growth in11,47% in 2023, with revenues that exceeded $23.6 billion last year.
This comes despite the difficulties that companies in various sectors in the country, including the food processing industry, have faced in recent months due to a credit crunch and limited resources.
This last sector is in fact the one that is particularly ready for investments by foreign companies.
Industry experts predict an increase in mergers and acquisitions (M&A) in the next two years. A unique opportunity for Italian companies interested in entering the market through partnerships with local companies in the food sector or direct acquisition of assets.
The value of F&B market in Vietnam is expected to increase by 10.92% in 2024 from 2023, surpassing $26.1 billion.
The industry will continue to grow at a compound annual growth rate (CAGR) of 10.25% between 2023 and 2027, reaching an estimated value of USD 34.9 billion in 2027.
Currently, food and beverage expenditures account for the largest portion of consumers’ monthly budgets, accounting for 35%. It is expected that by 2030, approximately 17 million middle-income households will emerge in Vietnam, further increasing the demand for food and beverage.
From the data above, it is clear that Vietnam stands out as a dynamic and favorable market for the food and beverage sector. This opportunity is supported by changes in consumer behavior, increased mobility, growing wealth and the rapid urbanization of the country. Vietnam is positioning itself among the top Asian nations in the development of the food and beverage sector.
The Vietnam has become a center of attraction for capital from countries such as South Korea, Germany and Italy. In addition, digital transformation is revolutionizing dining experiences, emphasizing safety and security. As a result, the demand for high-quality food and beverage products is increasing. By embracing sustainability and innovation trends, investors can unlock the enormous potential of the Vietnamese food and beverage market.
EU companies are in a particularly advantageous position to enter the market, thanks to the close trade ties between Vietnam and the European Union, as well as the favorable image of European products among Vietnamese consumers.
EU companies enjoy a relatively advantageous position compared to many other developed nations, thanks to theEU-Vietnam Free Trade Agreement (EVFTA). This agreement will eliminate almost all customs duties between Vietnam and the EU over the next 10 years.
The EVFTA significantly improves the prospects for bilateral agri-food trade by increasing the availability of both Vietnamese specialty products in the EU and European products in Vietnam.
A notable aspect of the agreement is the inclusion of geographical indications (GI) for certain food products. GI is a form of intellectual property that protects a product originating from a specific geographical location. The EVFTA automatically recognizes the GI of 39 Vietnamese food products and 169 European products. This will help consumers in both markets recognize the authenticity of the products and provide a competitive advantage to companies that want to export to Vietnam.
Food processing is one of the most important sectors in Vietnam. In 2022, the sector grew by8,8% compared to the previous year, according to research by the United States Department of Agriculture (USDA), with more than 8,500 registered companies.
Growing domestic demand is also supporting the domestic food production and processing industry. As income levels rise, domestic consumption is also growing proportionately, reflected in the growing demand for high-quality food and beverage products.
This trend will drive further investments in food processing infrastructure growth.
Vietnam is home to hundreds of industrial parks, many of which offer incentives and support to companies looking to locate. In addition, the relatively low cost of labor makes Vietnam a competitive choice for locating or relocating manufacturing and processing facilities.
In this context, companies that wish to export to Vietnam can benefit from the growing appetite for high-end, premium and organic products. In the foodservice sector, Vietnamese consumers are keen to explore new cuisines and ingredients, and the Made in Italy brand is synonymous with uniqueness and excellence.
Italian products can benefit from the reputation of being safe and healthy and, in specific market segments, representing high quality with a premium price. As a result, they are well positioned to be considered desirable goods in Vietnam.
The current combination of government plans to grow the food processing industry, growing domestic demand for processed food, and an industry struggling to access credit has created an ideal environment for Italian companies to invest in Vietnam.
The Octagona team, with over twenty years of experience in internationalization strategies of Italian companies, is available to discuss these opportunities further.
Contact us for more information.
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