Vietnam Foodservice Market Outlook to 2030

Vietnam Foodservice Market Overview

• The Vietnam Foodservice market is valued at USD 22.6 billion, based on a five-year historical analysis. This market is driven primarily by rapid urbanization, the growth of the middle class, and increasing disposable income, leading to a rise in demand for dining out and food delivery services. The surge in tourism has also contributed to the market's growth, particularly in cities like Ho Chi Minh and Hanoi, where international visitors frequently seek foodservice outlets.

• Ho Chi Minh City and Hanoi are the dominant cities driving the market, mainly due to their large population, strong tourism industries, and increasing number of expatriates and international visitors. These cities host a variety of restaurants, cafes, and street food vendors that cater to both local consumers and tourists.
• In 2024, the Vietnamese government launched a campaign to promote Vietnamese cuisine globally, which is expected to increase international food tourism by 15 million meals served at local restaurants. This initiative is particularly focused on promoting the countrys culinary heritage in regions such as Hanoi, Ho Chi Minh City, and Da Nang, which will provide a boost to local food service providers.

Vietnam Foodservice Market Segmentation

By Service Type: The market is segmented by service type into full-service restaurants, quick-service restaurants, cafes and bars, catering services, and street vendors. Quick-service restaurants hold the largest market share due to their fast-paced, convenience-driven model, which resonates with the growing younger population and urban professionals. This segment has seen significant growth as brands like Lotteria and KFC have invested heavily in expanding their footprint across the country, especially in urban areas.

By Cuisine Type: The market is segmented by cuisine type into Vietnamese cuisine, international cuisine, and fusion cuisine. Vietnamese cuisine dominates the market share due to its deep cultural roots, affordability, and wide acceptance among both locals and tourists. The popularity of dishes like pho, banh mi, and bun cha continues to attract local consumers and international visitors, contributing to the growth of this segment.

Vietnam Foodservice Market Competitive Landscape

The market is dominated by a mix of local and international players, creating a highly competitive landscape. Global brands like KFC, Starbucks, and McDonalds have strong market positions due to their well-established operations, brand recognition, and consistent product offerings.

Vietnam Foodservice Market Analysis

Market Growth Drivers

• Rise in Tourism and International Influence: Vietnam's foodservice market is driven by the increasing influx of international tourists. In 2024, the Vietnamese government aims to welcome 17 million international visitors, contributing over 750,000 new meals served daily in the foodservice industry. The culinary preferences of these tourists, particularly from South Korea, China, and Japan, are shaping menu offerings across casual dining and quick service restaurants, thereby boosting market growth.
• Expanding Middle Class: Vietnam's expanding middle class, which is expected to reach 40 million people in 2024, plays a crucial role in driving the foodservice industry. This segment demands more variety, higher-quality food, and dining experiences, leading to the growth of fast-casual restaurants and fine dining establishments. As household expenditure on dining out is set to exceed VND 2 trillion annually, the foodservice sector is seeing an upswing in revenues.
• Increase in Urban Workforce: Vietnams urban workforce is growing, with nearly 25 million people expected to be employed in cities by 2024. The growing workforce in urban areas is creating a demand for quick-service restaurants and food delivery services. The shift in employment patterns is encouraging more frequent dining out, with an estimated 300,000 additional daily visits to urban restaurants by workers in major cities like Ho Chi Minh City and Hanoi.

Market Challenges

• Regulatory Compliance and Food Safety Concerns: The Vietnamese government has intensified its focus on food safety regulations, mandating strict hygiene standards in foodservice establishments. In 2024, the number of food safety inspections is projected to increase by 30%, with restaurants facing fines up to VND 500 million for non-compliance. This has created operational challenges for smaller foodservice players who struggle to meet the evolving regulatory demands.
• Competition from Informal Street Vendors: Despite the growth of organized foodservice chains, competition from informal street vendors remains fierce. Street food vendors still account for over 60% of Vietnam's foodservice market, with an estimated 2.5 million stalls operating across the country. This fragmented market landscape makes it difficult for formal restaurants to attract budget-conscious consumers who prefer affordable, quick meals from vendors.

Vietnam Foodservice Market Future Outlook

Over the next five years, the Vietnam foodservice market is expected to show growth, driven by continuous consumer demand for dining convenience, the expansion of food delivery platforms, and the increasing preference for diverse dining experiences.

Future Market Opportunities

• Expansion of Regional Cuisine in Urban Centers: Over the next five years, regional Vietnamese cuisines will play a larger role in urban foodservice markets, with over 200 restaurants specializing in dishes from central and southern Vietnam expected to open in Ho Chi Minh City and Hanoi by 2029. This trend will cater to the increasing demand for traditional flavors among both locals and tourists.
• Increased Investment in Sustainable Practices: By 2029, the majority of leading foodservice chains will have adopted sustainable practices, with 400 outlets expected to shift to eco-friendly packaging, reducing plastic waste by 30 million items annually. This push towards sustainability will be driven by both consumer demand and government regulations focused on environmental responsibility.