Gen Z shaping the future of F&B industry

According to the Decision Lab Best F&B Brand Rankings 2024 revealed in May, Trung Nguyen Legend coffee climbed by 3.9 points to secure third spot in the rankings, while some fast food giants dropped by approximately one point.

Gen Z shaping the future of F&B industry

Although KFC topped the list, its score fell by 1.3 points from the previous year. Highlands Coffee came in second, and Phuc Long Coffee & Tea, Lotteria, and The Coffee House placed after Trung Nguyen Legend.

The Vietnamese food and beverages (F&B) market is expected to boom in 2024, marked by the expansion of restaurants and coffee chains, Decision Lab wrote.

“Consumers, especially the younger generation, increasingly prioritise convenience and embrace dining out as a regular experience rather than just for special occasions,” it said. “Additionally, coffee culture continues to thrive, with coffee chains becoming popular social hubs and offering a respite from daily life. The F&B scene is dynamic and adapting to the evolving preferences of Vietnamese consumers.”

The culture of heritage cuisine has emerged as a phenomenon in the industry, driven by the younger generation. As a result, today’s Gen Z is more likely to opt for an aromatic cup of Trung Nguyen coffee - a renowned brand from Buon Ma Thuot, famous for its world-class robusta beans.

They are also savouring regional dishes from various regions instead of frequenting Pizza Hut, Lotteria, or McDonald’s.

“Heritage cuisine refers to creative F&B using speciality ingredients from all over Vietnam, a symbol of harmony between tradition and creativity,” said Nguyen Hong Van, strategic management expert at the Foreign Trade University. “Gen Z (typically recognised as anyone born between approximately 1997 and 2012) loves unique experiences and enjoys innovative drinks combined with traditional flavours, so they are willing to spend money to try new cafés and restaurants.”

The explosion of social media, along with the sharing of dining experiences and food photos, has created new trends over the years, stemming from this generation’s eating habits, Van added.

“The F&B industry is at its peak thanks to the emergence of Gen Z. For them, it is not about eating a lot or necessarily getting full. They prefer snacking over main meals because eating out is quick, convenient, and varied,” she continued.

According to a quick survey by VIR posted on social media in May, 87 per cent of the over 200 respondents aged 16-30 agreed that they frequently spend money on dining out and visiting cafés.

“I enjoy experiencing Vietnamese culture through its cuisine. Instead of opting for fast food like I used to, I now prefer savouring the regional specialities,” said Nguyen Anh Duc, a 30-year-old marketing employee at FPT.

“Traditional eateries need to elevate their standards because many fusion restaurants are emerging. It seems that Gen Z is now seeking different values when choosing where to dine. We are looking for culinary cultural values - a place where the food is genuinely delicious, and the environment is comfortable.”

Meanwhile, iPOS.vn, a company specialising in solutions for the F&B sector, noted that the Phe La beverage chain has swiftly become a national favourite among young people, thanks to its oolong tea beverages sourced from Dalat.

Starting operations in March 2021, Phe La has reached the milestone of 20 stores in the largest cities across the country. Its revenue on e-commerce platforms since April 2023 was reported to be almost $92,000, reflecting a growth of over 138 per cent.

Following its success, numerous brands have emerged, capitalising on this heritage drinks trend and rapidly expanding their branches.

Lasimi Tea, keeping up with the trend of creative beverages, has expanded its system to 37 stores nationwide since its first store opening in 2022, offering innovative oolong milk tea crafted from tea in the Central Highlands province of Lam Dong. Similarly, the Oola brand, featuring its speciality oolong tea from Bao Loc district, opened its first store in March 2023 and reached 33 branches nationwide within a year.

The trend of vegetarianism is also on the rise among young people, with vegetarian restaurants bustling with Gen Z customers, especially on the first and fifteenth days of the lunar month.

“When young customers come to Dana, they enjoy vegetarian cuisine and embrace Vietnamese culture more,” said Vu Thi Thu Huyen, founder and CEO of Dana Vegan House in Hanoi Old quarter. “One of the reasons we chose to position ourselves as a progressive vegetarian home is because we aim to target young adults aged 20-25 and, together with them, build a vegetarian community as a lifestyle.”

The Vietnam Food & Beverage Market Report for 2023 by iPOS.vn said that despite economic challenges, by the end of 2023, the number of restaurants and cafés in Vietnam reached over 317,000 establishments, marking a 1.26 per cent increase compared to 2022. The positive growth in business expansion is attributed to the strong influence of culinary trends, prompting the emergence of numerous small-scale eateries and kiosks.

The report also highlights that in 2023, for every three Vietnamese individuals, at least two are actively engaged in following street food culinary trends.

F&B is still a game for TOP brands With a growth rate of more than 10 per cent per year, the food and beverage market is still a vibrant playground led by big brands.