Vietnam food processing industry: Opportunity for development

In Q1/2020, the import turnover of processed and preserved seafood products reached 14.1 million USD, down 5%. The processed meat products reached 6.38 million USD, down 16% over the same period of 2019. Due to the impact of Covid-19, trading activities were interrupted and the domestic demand also sharply decreased.

Total inventory of agricultural processed food in Q1/2020 was up to 48,000 tons. The largest inventory in quantity was coffee, pepper and cashew with over 43,000 tons followed by seafood products. The food processing industry was one of the 6 industries with the largest inventory index, recording 96% over the first 6 months of 2020.

The largest import markets of Vietnam’s agricultural products did not show many positive signals while Chinese market down 12%; Korean market up 2.4%, the US market up 5.7%. This has put a great pressure on the industry,  requiring higher processing technology advancement to increase export value.

Production for export potential

Processed seafood

In Q1/2020, the output of dried seafood production is estimated at 20.4 thousand tons, equivalent to a decrease of 4% compared to the same period in 2019. Currently, the production of dried seafood faces the lack of raw materials, which is a common situation of small and medium-sized producers.

Source: VIRAC, GSO

The output of canned seafood in Q1/2020 is estimated at 43.2 thousand tons, down 3% compared to the same period in 2019. The main product of the sector is canned tuna, which is mainly produced for exporting to the US and EU markets. Besides, tuna exports to other markets also saw impressive growth, especially in emerging markets namely the Middle East and Mexico.

Source: VIRAC, GSO

Processing canned meat and other meat products

Total export turnover of meat products in Q1/2020 reached 3.2 million USD, up 54% compared to the same period in 2019. It is expected, in 2020, the export value of processed chicken will continue to increase. As planned before, Koyu & Unitek Co., Ltd. in Dong Nai will export about 3,600 tons of processed chicken with a total value of about 20 million USD. In addition, C.P Vietnam exported the first shipment to Japan in June 2020 and plan to expand to other markets.

Source: VIRAC, Uncomtrade

Vissan is one of the leading processed meat exporters in Vietnam. In 2019, total revenue from the company’s export segment reached more than 530 thousand USD. Currently, the company is also in the process of developing new items to particular markets such as tomato sauce (Japan), vegetarian spring rolls (US), ham and pork rolls (Singapore), fish sauce (Australia).

Food processing industry during the 2nd Covid-19 wave

Due to the impact of the Covid-19 epidemic, the production and trading activities of seafood enterprises are increasingly affected. Until now, most businesses have decreased 35-50% of their orders due to contract cancellation or lack of materials. All transactions have been put on hold to prevent a strong pandemic outbreak.

Besides, Vietnam is one of the five countries most affected by climate change, in terms of raw materials and agricultural production activities. The scale of agricultural production is still small-sized, not really a large modern agriculture formation yet. Low quality raw materials for processing poses a big challenge.

Due to the current Covid-19 context, enterprises investing in good processing technology not only help boost the agricultural industry recovery after the pandemic but also contribute to growth targets. By 2030, the agricultural product processing industry will develop to be among the top 10 countries in the world. Additionally, Vietnam will serve as the global processing and logistics center with efficient capacity to meet the agricultural production requirements.

New trend of the food industry in 2020

The M&A wave in the industry

M&A activities in the industry have been active in recent years, creating the “giants” of the food – beverage industry, such as Masan, Thanh Cong, Kido, Pan Group. Due to financial and technological strengths,  big names in the FMCG industry from Thailand, Korea are also actively investing in Vietnam. According to BMI research, investment opportunities into Vietnam’s food processing industry are still potential, especially in the beverage and dairy sectors.

The rising tendency to eat at home 

According to a NPD Group market research, consumers want to spend time at home as a result of working from home, getting away from noisy public places.  For those who want both home-cooking and convenience, pre-processed foods are much favorable. Vinmart Cook is a popular brand in this segment with products available on different channels namely Vinmart and Vinmart +.

Delivery is  growth driver

Due to busy lifestyles, food delivery has become the most important service on the restaurant menu. In fact, demand for deliveries surging heavily urges companies to design new packages or set up a “ghost kitchen” solution. The increasing expenditure also means the tremendous growth for Now, Grab Food and Be in the real-time delivery market.


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