The F&B market continues its stable development trend in 2023

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The F&B market in 2022 has many bright spots

  • The revenue scale of the F&B market in 2022 is nearly 610,000 billion VND, an increase of 39% compared to the same period in 2021. In 2022, the revenue structure of F&B services nationwide has strongly differentiated. Specifically, 95% of the revenue comes from single dining services such as restaurants and eateries, while the remaining 5% of the market share comes from food service chains.

 

Overall, the F&B market has a high growth rate after Lunar New Year, with Q2 and Q3 reaching 120% and 128% respectively compared to Q1/2022. However, Q4 only grew by 117%, lower than the same period in previous years.

 

  • For the domestic market, independent restaurants and eateries are still preferred by people because the prices of food and drinks at food service chains are still relatively high compared to the income of Vietnamese people. As of the end of 2022, there are about 338,600 restaurants and cafes. From 2016-2022, the annual growth rate CAGR reached 2%.

 

From the report, Ho Chi Minh City is the province with the most restaurants and eateries in the country, accounting for 39.78% of the total nationwide, nearly three times higher than the second-ranked province of Hanoi. Among the nearly 3,000 surveyed restaurants and cafes, up to 46.5% of F&B businesses have not yet conducted online sales. However, about 82.8% of domestic F&B businesses have started their digital transformation journey, primarily applying it to sales and inventory management, as well as raw materials.

 

“For large brands, especially chain brands, are using accumulated capital to seize market share as competitors weaken. Large brands such as Golden Gate, Highlands Coffee, and The Coffee House are still expanding their chains but facing increasing competition from new brands that are making a name for themselves such as Phê La, and Katinat… 2023 promises to be an interesting year with many variables in the market,” the report concludes.

 

According to the same report, only 4.3% of the surveyed F&B units faced a lack of capital during the post-COVID-19 period, making it difficult to cover short-term costs; about 9% had limited capital and needed to carefully manage their finances. The majority, 86.6% of businesses, did not have any issues with their business capital.

 

Through interviews with nearly 4,000 customers, the two most important criteria in the process of choosing a restaurant are the quality of the food and drinks and the price. Notably, the cost that Vietnamese people frequently spend on coffee is around 40,000 VND to 70,000 VND. Additionally, they are willing to spend up to 500,000 VND on special dining occasions.

 

Moreover, 77.16% of diners were able to maintain their spending level, and some even plan to increase their spending on food and drinks in 2023. Therefore, despite the economy being forecasted to face many difficulties in 2023, most diners still want to spend more on culinary experiences.

After experiencing two years of the pandemic, the F&B market has undergone many fluctuations. After the period of social distancing, the demand for this industry has shown a strong recovery. By 2023, the market value is expected to increase by 18% compared to 2022, reaching 720 trillion VND. After the recovery, the F&B market will continue to develop at a stable pace and is expected to reach a value of up to 938.3 trillion VND by 2026.

 

According to the analysis group’s forecast, although the Vietnamese economy will face many pressures in 2023, the F&B market revenue in Vietnam is expected to grow by 18%, reaching 720.3 trillion VND. After recovering from the pandemic, the F&B market will continue to develop at a stable pace and is expected to reach a value of nearly 1,000 trillion VND by 2026.

Challenges that businesses in the F&B market have to face

The report also highlights a series of obstacles that F&B businesses are facing in the process of recovery and development. Specifically, one of the biggest concerns for businesses is the issue of human resources, which accounts for up to 99.1% of surveyed businesses. Among them, the biggest concern of participating F&B units is the difficulty in finding personnel, a lack of professional personnel, high labor costs, and difficulty in retaining personnel.

 

“F&B market employees often have a high degree of versatility, one person has to do 2-3 positions. Opportunities for promotion are also not clear. In addition, employers rarely pay social insurance or implement policies such as the 13th-month salary and other benefits. This has led to a decreasing attractiveness of jobs in this industry in recent years,” the report stated.

 

In addition, as a sector with relatively complex human resources, 16.3% of businesses have difficulty scheduling work and 10.4% make errors in calculating staff salaries. Currently, most businesses are still using traditional shift management methods through Excel, Zalo, or fingerprint attendance machines…

 

Up to 99% of F&B businesses faced operational issues in 2022, with nearly 50% of businesses having difficulties in managing income and expenses and lost raw materials. Businesses are also concerned about customers tightening their wallets and spending less during the new period as the economic situation in 2023 faces many challenges.

 

Information about the situation and prospects of the Vietnamese beverage market is summarized from the “2022 Food and Beverage Business Market Report” conducted by VIRAC in coordination with iPOS.vn and the F&B Vietnam specialized community. This report includes 4 main sections, as follows.

 

  • The first part introduces an overview of the F&B market in 2022, including an evaluation of the growth rate of restaurants and cafes, as well as the revenue of the entire industry (including takeaway food and online sales).
  • The second part is an analysis, evaluation, and assessment of the market situation throughout 2022, along with the survey results from nearly 3,000 restaurants and cafes and nearly 4,000 customers nationwide.
  • The third part provides short-term and long-term forecasts for the F&B market.
  • The final part is an evaluation of prominent trends that will emerge in 2023.