MARKET ACCESS SECRETARIAT

Global Analysis Report

Foodservice Profile
Vietnam
July 2014
EXECUTIVE SUMMARY

CONTENTS

Vietnam has been in transition from a centrally-planned to a

market- based economy since the late 1980s. This process has
accelerated over the last decade since Vietnam achieved World
Trade Organization (WTO) membership in January 2007. Over the
last few years, a combination of strong economic and tourism
growth, rising disposable income, a growing middle class, and
increasing exposure to western lifestyles has fueled the rapid
growth of the foodservice sector in Vietnam.

Executive Summary ....................... 1

Sector Overview ............................. 2
Subsectors ..................................... 4
Locations ........................................ 6
Top Companies .............................. 7

Today, Vietnam is considered a middle-income country within the

Asian region. With 90 million people, Vietnams population ranks as
th
the 13 -largest in the world. Vietnams dynamic, young, and
educated population is enjoying a GDP per capita of US$3,750 and
growing. It is also one of the driving forces behind the foodservice
sector.
Euromonitor also forecasts is Vietnam to be among the world's top
ten tourist destinations by 2018. The tourism sector has contributed
US$6.3 billion to the economy in 2012 and it is forecasted that the
sector will contribute a record of US$6.7 billion in 2013. Total
international arrivals were expected to reach 7.6 million visitors that
same year, representing a 10.6% growth over 2012 as reported by
the department of Tourism Vietnam.
In Vietnam, eating out is common practice, especially in large cities,
such as Ho Chi Minh City or Hanoi and it is considered a regular
part of social life. Vietnamese consumers have access to a wide
variety of street food vendors and restaurants at affordable prices.
People love gathering at cafs or restaurants to have breakfast,
lunch or dinner, a trend reminiscent of Vietnams colonial past,
according to a BBC Vietnam economic country profile.

Conclusion ...................................... 8
Resources ...................................... 8

SECTOR OVERVIEW
Vietnams foodservice sector was valued at US$33.3 billion in 2012. Between 2008 and 2012, the
foodservice sector recorded a compound annual growth rate (CAGR) of 11.8% and is expected to
continue a healthy growth with a CAGR of 13.3% from 2013 to 2017, reaching total sales of US$59.8
billion, according to Euromonitor.
Vietnam, with the smallest urban population in Asia (about 30 percent of the total population), has started
seeing significant rural to urban migration as the economy becomes more industrialized and urbanized.
Consumers are also adopting western eating trends.
Urban Vietnamese consumers have busier lives; consequently, they are dining-out more than before, and
have greater demand for home delivery services. Foodservice outlets are used for entertainment and
socializing. The forecasted growth also supports this trend.
Thanks to increasing disposable incomes, rising living standards and the increasing trend towards travel,
especially in big cities, Vietnamese tourism is projected to enjoy strong growth during the 2013-2017
forecast period. In addition, the Vietnamese government is putting great efforts into promotional
campaigns in order to promote Vietnam as a tourist destination all over the world.

Historic Market Value and Growth of Vietnamese Foodservice by Category, US$ millions
Category
Total Consumer Foodservice
Full-Service Restaurants
Street Stalls/Kiosks
Cafs/Bars
Fast Food
Pizza Consumer Foodservice**
100% Home Delivery/Takeaway

2008

2009

2010

2011

2012

21,313.0
11,259.5
8,389.7
1,410.0
253.8
26.7
-

22,899.6
11,985.1
9,060.9
1,565.4
288.1
30.8
-

24,679.0
13,027.3
9,604.5
1,719.2
326.9
39.0
1.1

30,980.4
17,091.2
11,338.4
2,132.8
414.5
55.9
3.6

33,295.7
18,477.6
11,961.9
2,373.3
477.4
62.7
5.4

CAGR
2008-12
11.8%
13.2%
9.3%
13.9%
17.1%
23.8%
-

Forecasted Market Value and Growth of Vietnamese Foodservice by Category, US$ millions
Category
Total Consumer Foodservice
Full-Service Restaurants
Street Stalls/Kiosks
Cafs/Bars
Fast Food
Pizza Consumer Foodservice**
100% Home Delivery/Takeaway
Source for both: Euromonitor, 2014.

2013
36,330.3
20,521.0
12,634.1
2,620.7
546.7
73.6
7.8

2014

2015

2016

2017

40,755.4
23,488.3
13,647.8
2,964.1
643.8
88.9
11.4

46,131.4
27,134.3
14,841.7
3,376.2
762.8
108.5
16.5

52,397.8
31,455.0
16,158.3
3,857.7
903.4
132.6
23.4

59,771.0
36,609.9
17,634.9
4,424.5
1,068.9
162.8
32.7

CAGR
2013-17
13.3%
15.6%
8.7%
14.0%
18.2%
22.0%
43.1%

CAGR: compound annual growth rate.

**Pizza consumer foodservice data is compiled from three different subsectors (fast food, full-service restaurants, and 100% home
delivery/takeaway) for the purposes of comparison, but remains reflected within the figures for these subsectors, and thus the
consumer foodservice total. As such, pizza consumer foodservice is not counted as its own sector within the consumer foodservice
total.

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In the Vietnamese market, independent operators represent almost the entirety of value sales for the
foodservice industry, accounting for US$33.1 billion in over 500,000 outlets for 2012. Over the forecasted
period of 2013 to 2017, independent operators will see a CAGR of 13.1% and outlets are expected to
grow to over 575,000. Chained operators are expected to continue gaining an impressive market share
with a CAGR of 28.3% over the forecast period, to reach sales of US$740 million in 2017.

Historic Market Value and Growth of Vietnam Foodservice by Type, US$ millions,
Fixed 2012 Exchange Rates
Category
Consumer Foodservice by Type
Independent
Chained
Source: Euromonitor International, 2014.

2008

2009

2010

2011

21,313.0
21,235.2
77.8

22,899.6
22,801.5
98.0

24,679.0
24,554.1
124.9

30,980.4
30,795.9
184.5

CAGR
2008-12
33,295.7
11.8%
33,079.9
11.7%
215.8
29.1%
2012

CAGR: compound annual growth rate.

Forecast Market Value and Growth of Vietnam Foodservice by Type, US$ millions,
Fixed 2012 Exchange Rates
Category
Consumer Foodservice by Type
Independent
Chained
Source: Euromonitor International, 2014.

2013

2014

2015

2016

36,330.3
36,057.2
273.2

40,755.4
40,402.9
352.5

46,131.4
45,677.0
454.4

52,397.8
51,816.2
581.6

CAGR
2013-17
59,771.0
13.3%
59,030.9
13.1%
740.0
28.3%
2017

CAGR: compound annual growth rate.

Historic Number of Vietnam Foodservice Outlets

Category
Consumer Foodservice by Type
Independent
Chained

2008
529,175
528,756
419

2009
536,709
536,214
495

2010
543,483
542,906
577

2011
550,027
549,181
846

2012
553,941
553,015
926

2016
572,203
570,370
1,833

2017
577,521
575,416
2,105

Source: Euromonitor International, 2014.

Forecast Number Vietnam Foodservice Outlets

Category
Consumer Foodservice by Type
Independent
Chained

2013
558,331
557,204
1,127

2014
562,856
561,512
1,344

2015
567,356
565,777
1,579

Source: Euromonitor International, 2014.

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Outlets and Transactions of Vietnam Foodservice by Subsector, 2012

Subsector
Street Stalls/Kiosks
Full-Service Restaurants
Cafs/Bars
Fast Food
Pizza Consumer Foodservice**
100% Home Delivery/Takeaway

Outlets
438,697
84,227
23,322
7,684
212
11

Total Sales Transactions

(US$ million) (thousands)
18,477.6
11,961.9
2,373.3
477.4
62.7
5.4

8,420,731
5,601,617
917,289
368,499
9,891
479

Average
Sales per
Sales per
Transaction
Outlet
(US$)
(US$)
42,119.3
2.2
142,019.8
2.1
101,762.3
2.6
62,129.1
1.3
295,754.7
6.3
490,909.1
11.3

Source: Euromonitor, 2014.

**Pizza consumer foodservice data is compiled from three different subsectors (fast food, full-service restaurants, and 100% home
delivery/takeaway) for the purposes of comparison, but remains reflected within the figures for these subsectors, and thus the
consumer foodservice total. As such, pizza consumer foodservice is not counted as its own sector within the consumer foodservice
total.

The Vietnamese foodservice landscape comprised of over 438,697 street stalls/kiosks that recorded over
8.4 billion transactions in 2012. The average transaction cost of around US$2.2. On the other hand, home
delivery restaurants had the highest average sales per outlet nearing the US$491.000 and higher
average sales per transaction of US$11.3

SUBSECTORS
The following subsector analysis is based on information from Euromonitor International, Please see
resource section for complete listing of documents consulted.
Full-Service Restaurants
Local full-service restaurants played an important role in leading the overall category in Vietnam. In fact,
with rising disposable incomes and higher living standards, especially in big cities such as Ho Chi Minh
City, many local full-service restaurants put in large efforts to improve quality, service and food safety
standards, while at the same time, increasing their numbers of outlets.
Independent operators remained dominant in full-service restaurants in Vietnam, accounting for almost
100% of value sales. Similar to cafs/bars, independent full-service restaurants are present on most
street corners across the country, especially in big cities such as Ho Chi Minh City or Hanoi. These
independent operators have broad knowledge/expertise regarding Vietnamese tastes and preferences;
this enables them to attract customers with their authentic dishes. They offer a very wide range of dishes
at different price points.
With less leisure time, Vietnamese consumers, especially single ones, are increasingly choosing to eat
out rather than cook at home. In Vietnam, full-service restaurants are a highly diverse channel that
encompasses numerous different styles and cuisines from various countries. Product offerings vary
considerably, ranging from small independent restaurants with only one special dish, to large, high-end
restaurants offering a vast array of dishes.
Euromonitor data shows that full-service restaurants in Vietnam saw current value sales grow at a CAGR
of 13.2% from 2008 to 2012. This was mainly a result of the rising unit prices in most restaurants,
alongside the rising number of outlets.

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Street Stalls/Kiosks
The majority of Vietnamese people eat breakfast outside the home. Street food vendors are very popular
and have long been an integral part of people lives, and can be found everywhere. As such, street
stalls/kiosks remained by far the most prominent consumer foodservice channel in Vietnam in terms of
outlet numbers. Through such outlets, consumers can easily find a wide range of dishes or drinks at a
much lower price compared to other foodservice channels. Furthermore, historically, street stalls/kiosks
were considered to be a highlight in Vietnamese culinary culture. However, as the awareness of health,
hygiene and food safety increased among urbanite consumers, the sector may experience a slowdown.
New regulations put forward by the government will hamper the growth of street stalls/kiosks, aimed to
control their numbers, as well as their food safety standards.
Street stalls/kiosks saw value sales of US$12.0 billion in 2012 and a CAGR of 9.3% from 2008 to 2012.
The CAGR for the forecasted period of 2013 to 2017 is expected to be 8.7% while sales are expected to
reach US$17.6 billion.
Cafs/Bars
Cafs/bars remained one of the most popular foodservice venue types in Vietnam for social gatherings
and meetings, reflecting Vietnamese tradition. This sector saw value sales of US$2.4 billion in 2012 and a
CAGR of 13.9% from 2008 to 2012. The CAGR for the forecasted period of 2013 to 2017 is expected to
be 14.0% while sales are expected to reach US$4.4 billion. The high value growth in this category is the
result of increases in spending per transaction, as well as higher living standards and the increasing
westernisation trend in Vietnamese culture, especially among younger consumers residing in major cities.
Independent cafs/bars dominated in the Vietnamese cafs/bars category in terms of number of outlets
and transactions, as well as value sales, according to Euromonitor. Independent cafs/bars are present
on most streets across the country, with many being within walking distance of residential areas.
In addition, the independent cafs/bars category includes a diverse range of services, ambience styles
and menus, factors that help them cater to the needs of both younger and older customers, as well as a
broad spectrum of income levels. In contrast, chained cafs/bars such as Highlands Coffee (Viet Thai
International JSC), Buds Caf (North American Food Corp) or Angel-in-us Coffee (Vietnam Lotteria Co
Ltd) tend to target middle- to high-income consumers, especially the young, by offering premium services
at higher prices.
Fast Food
In Vietnam, fast food outlets are mainly operated by international chains, although recent years have
seen the emergence of domestic brands. Fast food outlets have shown strong growth in recent years,
increasing from 477 outlets in 2012 to more than 1000 by 2017 according to Euromonitor forecast. They
are proving popular among young people for their convenience and comfortable settings.
Fast food recorded a healthy CAGR of 17.1% from 2008 to 2012. The strong performance of the category
was the result of intensive efforts of fast food operators, especially chained international players, to
stimulate demand, according to Euromonitor. In 2012, many international players expanded their outlet
networks in Vietnam. For example, in 2011, Subway had only one outlet, but towards the end of 2012, it
had three, all in Ho Chi Minh City.
Local independent fast food continued to dominate the Vietnamese fast food category in terms of number
of outlets. Nevertheless, chained fast food posted a much faster growth rate in terms of number of outlets
in 2013, with a 27% rise, compared to mere 1% increase for independents. Euromonitor explains this was
the result of increasing consumer awareness of chained fast food, where operators focus on offering a
pleasant environment, higher-quality services and better food safety standards.

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100% Home Delivery/Takeaway

Due to the increasingly busy lifestyles of working Vietnamese people, overall, the take-away and home
delivery category continued to be popular in 2012, to reach a value share of 11% and 6% respectively of
the total sales of the food service category. The number of 100% home delivery/take away outlets
remained very low compared to other consumer foodservice categories, Euromonitor notes in its report
about the sector.
Home delivery/takeaway and pizza foodservice, so common in Western countries, remains at its infancy
stage of development, having only appeared in Vietnam in 2010 with the arrival of Dominos Pizza (Imex
Pan Pacific Group Inc) and the launch of Pizza Hut Express (Pizza Hut Vietnam Ltd) shortly after.
Pizza home delivery recorded current value growth of 12% in 2012. This sector saw a combined value
sales of US$68.2 million in 2012. The CAGR for the forecasted period of 2013 to 2017 the pizza food
service alone is expected to be 22.0% while sales are expected to reach US$163 million.

LOCATIONS
Over the half million of Vietnam foodservice outlets are standalone, and based on 2012 Euromonitor data,
together account for 91% or 521,277 of outlets with value sales of US$33.3 billion. Standalone outlets
offer proximity and convenience to consumers. However, this category is facing challenges in the form of
affordability and availability of good new standalone locations; consequently the standalone category is
seeing limited growth (CAGR of 11.3% 2008-2012), in comparison, to consumer foodservice through
retail locations (CAGR 21.8% 2008-2012), which is perceived as a good substitute for foodservice
operators.
With stable rent prices and stable consumer traffic generated by commercial buildings, retail foodservice
has the upper-hand according to Euromonitor analysis. As a result, consumer foodservice through retail
outlets is forecasted to record the fastest overall growth by 2017 at CAGR of 18.7%. However, growing
from a low base, it remained a relatively small category, accounting for only a 3% share of overall
consumer foodservice units in Vietnam in 2012.
Historic Market Value and Growth of Vietnamese Foodservice by Location
In million US$ Current Prices - Fixed 2012 Exchange Rates

Location
Total Consumer Foodservice
Standalone
Lodging
Retail
Travel
Source: Euromonitor international, 2014.

2008

2009

2010

2011

2012

21,313.0 22,899.6 24,679.0 30,980.4 33,295.7

19,807.8 21,219.2 22,739.0 28,440.8 30,408.4
640.6
703.1
782.0 1,040.1 1,153.1
408.9
481.9
573.8
768.3
900.1
455.8
495.3
584.2
731.1
834.1

CAGR
2008/12
11.8%
11.3%
15.8%
21.8%
16.3%

CAGR: compound annual growth rate.

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Forecast Market Value and Growth of Vietnamese Foodservice by Location

In million US$ Current Prices - Fixed 2012 Exchange Rates
Location
Total Consumer Foodservice
Standalone
Lodging
Retail
Travel
Source: Euromonitor international, 2014.

2013

2014

2015

2016

2017

36,330.3
33,053.4
1,305.1
1,044.9
927.0

40,755.4
36,989.8
1,517.4
1,236.5
1,011.7

46,131.4
41,776.5
1,779.4
1,459.0
1,116.5

52,397.8
47,335.7
2,093.2
1,736.3
1,232.6

59,771.0
53,867.3
2,457.8
2,074.6
1,371.2

CAGR
2013-17
13.3%
13.0%
17.1%
18.7%
10.3%

CAGR: compound annual growth rate.

Within the standalone foodservice category, a number of formats are present, including cafs/bars, fullservice restaurant, fast food and street stalls/kiosks. However, there has been a trend among many
foodservice operators, especially the mid- to high-end segment, to locate their outlets in the retail location
in order to not only capture their target customers, but also boost their brand image.
The remaining foodservice locations, such as travel and lodging outlets, are predicted to see healthy
value growth by 2017, as the Vietnamese Government is putting more effort into developing the countrys
travel and tourism industry. In line with the growth of tourism, the numbers of high-end full-service
restaurants are also expected to increase in terms of outlets and value sales.
The table below shows that sales per transaction are the lowest at standalone outlets, followed by lodging
outlets in 2012, averaging US$2.12 and US$2.47 respectively. In contrast, foodservice through retail
outlets seems to perform the best, in terms of average sales per transaction (US$3.52).
Outlets and Transactions of Vietnamese Foodservice by Location, 2012

Subsector

Total Sales in
US$ million

Consumer Foodservice
Standalone
Lodging
Retail
Travel

33,295.7
30,408.4
1,153.1
900.1
834.1

Outlets
553,941
521,278
16,596
9,654
6,414

Transactions
(thousands)

Average
Sales per
Outlet (US$)

15,308,617.9
14,342,439.8
467,427.6
255,484.2
243,266.3

60,106.92
58,334.37
69,480.60
93,235.96
130,051.76

Average
Sales per
Transaction
(US$)
2.17
2.12
2.47
3.52
3.43

Source: Euromonitor international, 2014.

TOP COMPANIES
Euromonitor highlights that international brands maintained their leadership in the Vietnamese
foodservice industry. Leading global brands such as KFC, Lotteria and Pizza Hut, continued to expand
their outlet numbers in the country especially in Ho Chi Minh City and Hanoi. International players in all
sectors of the foodservice industry are forecasted to continue seeing fast growth in terms of both outlets
and retail value sales. New foreign brands are also expected to follow suit and enter the Vietnamese
market next year. A key example is the American fast food chain McDonalds; through 100% franchising,
it plans to open up to 100 restaurants across the country, with the first set to launch in Ho Chi Minh City in
2014.

Page | 7

Top 10 Companies and their Market Share in % in Vietnamese Consumer Foodservice

Brand

Global Brand Owner

KFC
Lotteria
Pizza Hut
Highlands Coffee
Pho 24
Trung Nguyen
Jollibee
Banh Mi Que
Thuan Kieu
Hoa Huong Duong

Yum! Brands Inc

Lotte Group
Yum! Brands Inc
Viet Thai International Joint Stock Co
Nam An Group
Trung Nguyen Corp
Jollibee Foods Corp
Tam Viet Thao Food Co Ltd
Com Tam Thuan Kieu Co Ltd
Hoa Huong Duong Co Ltd

2009

2010

33.5
10.7
5.5
8.3
14
1.7
2.2

32.7
10.9
6.2
8.3
11.9
2.2
2.8
-

4.2
3.7

3.5
3.1

2011
32.2
12.5
7.1
6.2
11.5
2.8
2.5
2.4
2.8
1.6

2012
35.8
12.9
7
6.4
4
3.7
3.6
2.1
2.1
1.6

Source: Euromonitor international, 2014.

CONCLUSION
At present, Western style fast food outlets are restricted to the fast food concept such as Kentucky Fried
Chicken (KFC), but as the Vietnamese economy grows, market restrictions should be lifted, and it is
therefore more likely other large multinational will enter Vietnam. Companies such as McDonalds, Burger
King and Starbucks are known for their extensive experience in entering and building businesses in
developing countries, either by direct ownership, partnerships or franchising. This will likely introduce
more Western foods to the Vietnamese foodservice scene.
Vietnam, like many other Asian countries, has a strong culture for eating out and for consuming food in a
family-friendly setting. At the present time, the vast majority of the restaurant sector is based on
Vietnamese cuisine and ingredients are sourced locally, but as the economy grows the opportunity for
imported goods is also growing. In addition, the return of European and North American Vietnamese
expatriates is creating a new demand for European and North American types of foodservice outlets.
Finally, Vietnam is also a growing tourist destination both from travelers within Asia, but also increasingly
from the West. This has encouraged the development of a large number of four and five star
accommodations with varied Western menus available for travellers. This sector is expected to continue
to grow and provide significant openings for imported fresh, frozen and grocery items including wine.

RESOURCES
Euromonitor International (2013).
- Cafs/Bars in Vietnam
- Consumer Foodservice by Location in Vietnam
- Consumer Foodservice in Vietnam
- Fast Food in Vietnam
- Full-Service Restaurants in Vietnam
- Street Stalls/Kiosks in Vietnam
- 100% Home Delivery/Takeaway in Vietnam
BBC Economic section: Vietnam country profile
Country profile - Planet Retail (2014)
Vietnam Tourism
Word Tourism Organization (UNWTO)

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Foodservice Profile: Vietnam

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