Market Size and Potential Growth
Overall food consumption in Vietnam amounted to VND427.5 trillion (US$20.32bn) in 2012 and expected to maintain a growth rate of 9.4% over the next 5 years 2012-2017, according to Business Monitor International, an international research firm.
Packed foods are currently the largest segment amounting to US$8.5bn by sales in 2012 with three main sub-categories: nutritions/staples (main item is milk) at US$4.6bn; impulse & indulgence (confectionery & biscuit) at US$1.9bn; and meal solutions (sauces) at US$2bn. The remaining are other types of foods including fresh foods, fast foods etc.
Domestic Key Players
•Nutritions: Vinamilk, Hanoimilk, Ba Vi Milk (IDP), Masan Foods (instant noodles), Tuong An Oil, Cai Lan Oils & Fats;
•Meal solutions: Masan Foods (Sauces); Vissan; Hung Thinh Sauces, Ha Long Can Food JSC;
•Confectionery: Kinh Do JSC, Bibica, Hai Ha Confectionery, Hai Chau Confectionery JSC, Tan Tan Confectionery JSC.
Food sector has been well established and mostly competing by brands. In each segment or product category, there is one or two leading brands. Key competition strengths belonged to those who have retailing or distribution network.
There are no foreign ownership restriction in this sector. From our familiar source recently, the Government even has an immediate plan to reduce State ownership in some major SOEs such as Vinamilk from 45% currently to 35% and Sabeco (from 89% to 35%) as measure to tackle the State budget deficit and the funding for public spending.