Vietnam – potential market for foreign food firms
Vietnam has been considered as a “fertile land” for foreign food firms as many trademarks from the Republic of Korea (RoK), Japan and Thailand are seeking ways to penetrate the 93 million-strong market.
Statistics from the Vietnam Retailers’ Association (VRA) showed that the country’s food consumption in the 2011-2016 period reached about US$30 billion with two-digit growth predicted in the future.
Han Kyung Joon, Vice Director of the Korea Trade and Investment Promotion Agency (KOTRA), said that after with the Korea-Vietnam Free Trade Agreement (KVFTA) became effective in 2015, Korean enterprises have switched their focus from the Chinese market to Vietnam in an effort to boost the export of consumer goods.
Along with merging and acquisition deals with high value, a strong wave of Korean investments has been seen in Vietnam’s food and beverage market.
On October 31, a delegation of businesses operating in the food and beverage industry from the RoK’s Jeju visited Ho Chi Minh City to seek Vietnamese distributors. The Ho Chi Minh City Branch of the Vietnam Chamber of Commerce and Industry (VCCI) said that the visit was a success.
At the beginning of the second quarter, RoK’s K-FOORAND ZONE opened its shop in Lotte Mart in Ho Chi Minh City, marking an expansion of Korean food coverage in Vietnam.
On November 8, the second Food and Beverage Exhibition 2017 will be held in Hanoi after the first one in August in Ho Chi Minh City where the RoK took the lead in the number of participating enterprises.
Japanese food brands are also deploying plans to bring their products into the Vietnamese market. Takimoto Koji, head of the Japan External Trade Organisation (JETRO) in Ho Chi Minh City, said Vietnam is the first country chosen by Japan in its campaign to export more food to the world.
Since late 2016, JETRO has cooperated with some distributors of Ministop, FamilyMart and Aeon in Vietnam to sell Japanese food. JETRO plans to increase food exports by 30% next year from the current amount of US$10 million.
A report released by StoxPlus in 2016 showed that in 2015-2016, the majority of merging and acquisition deals in the processed food market of Vietnam came from Asian investors, including those from Japan, Thailand and the RoK.