The domestic food and beverage market has great potential for development despite the difficulties caused by the COVID-19 pandemic, according to experts.
|According to a survey of Vietnam Report, 50 percent of customers have spent more on foods boosting immune system and clean foods due to the COVID-19 |
Hanoi - The domestic food and beverage market has great potential for development despite the difficulties caused by the COVID-19 pandemic, according to experts.
Food and beverages are in the fast-moving consumer goods (FMCG) category. For many years, this has always been one of the important economic sectors with great potential for development, according to the Vietnam Report 2020.
The food and beverage market’s growth rate is forecasted to reach from 5-6 percent annually in 2020-2025.
Despite suffering negative impacts from the COVID-19 pandemic, the food and beverage industry in Vietnam also has many strong growth opportunities. At present, more and more consumers pay attention to nutritional foods of plant origin, organic foods or food with healthy ingredients.
A survey conducted by Vietnam Report at the end of 2020 showed due to COVID-19, half of customers have spent more on foods boosting their immune system and clean foods. Meanwhile, 63.7 percent of customers have cut spending on alcohol and beer. Therefore, businesses in this industry must adjust their production to suit demand.
Food businesses have to increase their production capacity by about 30 percent, while beverage businesses must reduce their production to lower than 80 percent compared to before the pandemic.
Besides that, Vu Dang Vinh, general director of the Vietnam Assessment Report Joint Stock Company, said COVID-19 has forced nearly 70 percent of food and beverage businesses to focus on the digital transformation for survival and development, reported the Vietnam News Agency.
Many businesses have built modern technology processes in production and management. Food and beverage companies have also sped up investment activities to renovate the distribution system and adjust the proportion between traditional and modern trading channels. They develop applications to enhance the customer experience when shopping and innovate packaging design, eco-branding and product line development.
Nguyen Dang Quang, chairman of Masan Group, said the COVID-19 pandemic is a good opportunity to promote e-commerce.
The group is building plans to attract more and more people to online shopping, he said.
Vinh said food and beverage businesses need to focus on strategies such as revenue growth, market development, promotion of research and improving product quality. They should also diversify supply sources with priority for domestic suppliers and develop online distribution channels on e-commerce platforms.
According to experts in the food and beverage industry, the stable macroeconomy and commitments in free trade agreements signed between Vietnam and its partners such as the European Union-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) would bring export opportunities and more foreign investment. They would promote the transfer of technology and technological advancement in the industry.
Along with that, the food and beverage companies need to improve their competitiveness and increase investment in infrastructure systems and modernisation of production processes and corporate governance.