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Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic packaged food and beverages is a category that is still extremely low in value in Vietnam.
  • Although organic packaged food is a niche category in Vietnam, the number of categories with organic variants has increased, with snacks, baby food, formula and drinking milk leading innovation and becoming more competitive in general.
  • Sales of organic beverages were negligible in 2019, primarily due to the high unit price and limited distribution. However, a rise in health-conscious consumers and growing product availability is expected to improve consumer interest slowly.
Market Trends
  • Organic beverages are witnessing near negligible sales due to a major lack of consumer awareness. Currently, Vietnamese consumers are still predominantly un-aware of the difference between organic and non-organic products with neither retailers nor manufacturers attempting to educate consumers. While a few imported organic beverages are available in high-end supermarkets such as An Nam Gourmet, their availability is not stable throughout the year.
  • Currently, organic packaged food is limited in Vietnam, with sales restricted to a handful of categories such as baby food and snacks. However, the number of products introduced is expected to rise, as more leading packaged food companies aim to capitalize on the health and wellness trend over the forecast period 2019-2024.
Competitive Landscape
  • Consumer interest is witnessing a rise as product availability increases, particularly within organic milk. The three main market players in this category are Vinamilk, TH True Milk and Friesland Campina Vietnam, with Vinamilk considered a pioneer, having introduced organic shelf-stable milk and organic yogurt in recent years. TH Food Chain entered the category in 2019 with the launch of the UHT fresh milk product TH True Milk
Prospects And Growth Opportunity
  • Considering the high unit price and limited distribution for organic packaged food, the category size is expected to remain small; however, considerable growth is expected over the forecast period, which is hinging on the entry of major organic packaged food brands that can leverage economies of scale to provide organic products at competitive prices and make them more accessible.
General Health And Wellness Trends
  • Consumers in Vietnam are becoming health-conscious as a result of the rise in disposable income, increasing access to the internet, and the growing focus of health and nutrition on social media platforms. As a result, the demand for health and wellness products is slowly witnessing an increase in Vietnam. However, this demand is currently restricted to urban areas as most of the products are comparatively expensive, and are thus limited to high-income consumers.
  • Fortified/functional products are the most popular in overall health and wellness as the products’ benefits are more apparent and easily understood by many consumers. Additionally, the addition of vitamins and other functional ingredients typically does not affect the taste of FF products. Fortified/functional also benefits from strong promotional support, with leading manufacturers investing heavily in advertising via TV and radio, print media and online platforms, making these products the main beneficiary of rising incomes in Vietnam.
General Economics And Demographic Landscape

Economy:

  • The economy of Vietnam continues to record strong growth, with real GDP expected to increase by 6.6% in 2020, post gains of 7.0% in 2019. Growth is aided by competitive labour costs, a diversified trade structure and recently signed free trade agreements, including the EU trade agreement in 2019.
  • Domestic demand is expected to be strong, supported by a budding tourism sector. Private final consumption witnessed an increase of 7.0% in 2019, with a growth of 6.7% expected in 2020. Private consumption is expected to benefit from moderate inflation, robust employment and strong growth.
  • Real GDP growth is expected to drop to 6.2% in 2021, slipping further to 5.4% by 2027, partially driven by a more challenging macroeconomic environment and the increasing requirement for skilled labor.
     

 Population demographics:

  • The population of Vietnam was recorded at 96.5 million by 2019, increasing by 16.6 million since 2000.
  • The country has witnessed a rise in median age, which was recorded at 32 years in 2019. This indicator is expected to reach 36.8 years by 2030.
  • Fertility rates have witnessed a significant drop since 1980 levels of 5.0 births per female to 2.1 births per female in 2019, equalling the replacement level. The decline is driven by the high participation of females in the workforce and the significant improvements in education and family planning policies. Fertility is expected to stabilize at 2.0 births per female by 2030.
     

Income & expenditure:

  • The savings ratio in Vietnam was recorded at 3.2% of disposable income in 2019. This indicator is not expected to change in 2020.
  • Per capita consumer expenditure was recorded at US$1,918 in 2019. For the period 2020-2030, total consumer expenditure is expected to witness a cumulative increase of 70.1%, averaging 5.5% annually.
  • In 2019, disposable income per capita reached US$1,903, with the indicator expected to increase by 4.2% in 2020. For the period 2019-2030, total disposable income is expected to increase by 70.2% growing at an annual average of 5.5%.
Data

Data

Organic Packaged Food And Beverage Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

CAGR
(16-19)

CAGR
(20-22)

Health & wellness products consumption

USD million

4,049.7

4,413.7

4,770.8

5,148.9

5,380.5

5,623.2

5,888.0

8.3%

4.6%

Organic packaged food and beverages consumption

USD million

-

-

-

-

-

-

-

-

-

Organic packaged food consumption

USD million

-

-

-

-

-

-

-

-

-

Organic beverages consumption

USD million

-

-

-

-

-

-

-

-

-

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

-

-

Economic And Demographic Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

Total population

million

93.6

94.6

95.5

96.5

97.3

98.2

99.0

% Middle and upper class of total population

%

27.0

27.4

27.4

27.5

27.5

27.6

27.6

% Population aged 65+

%

6.8%

7.0%

7.3%

7.5%

7.9%

8.2%

8.6%

% Population aged 0-14

%

23.1%

23.1%

23.2%

23.2%

23.2%

23.1%

23.0%

% Population with higher education degrees

%

6.9

7.0

7.0

7.1

7.2

7.2

7.2

Average number of children per household

children

1.0

1.0

1.0

1.0

1.0

1.0

1.0

GDP per capita

USD per capita

2,086.1

2,295.7

2,516.5

2,715.1

2,851.5

3,008.0

3,155.9

Consumer expenditure per capita (US$)

USD per capita

1,492.4

1,628.5

1,781.5

1,917.9

1,998.5

2,098.2

2,203.0

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

577.6

630.8

690.4

742.7

771.8

808.0

846.7

Retailer And City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2019)

1

Ho Chi Minh City

12.5

Top cities by population (2019)

2

Hanoi

7.8

Top cities by population (2019)

3

Hai Phong

1.0

Top cities by population (2019)

4

Da Nang

0.9

Top cities by population (2019)

5

Can Tho

0.9

Top 5 Grocery Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2019)

1

Saigon Union of Trading Cooperatives

Top grocery retailers by sales (2019)

2

Central Group

Top grocery retailers by sales (2019)

3

VinGroup JSC

Top grocery retailers by sales (2019)

4

Mobile World JSC

Top grocery retailers by sales (2019)

5

Lotte Group

United States Department Of Agriculture Global Agricultural Trade System Data

Top 5 Export Commodities To Vietnam

Year

Country

Rank of
Product/Commodity

Product/Commodity

Export Value (US$)

2019

Vietnam

1

Organic Grapes Fresh

2,252,927

2019

Vietnam

2

Organic Apples Fresh

569,759

2019

Vietnam

3

Organic Cult Blueberries Fresh

219,600

2019

Vietnam

4

Organic Vinegar and Substitutes

140,973

2019

Vietnam

5

Organic Cherries Fresh

40,912

2019

Vietnam

Total

Total Organics*

3,265,651

2018

Vietnam

1

Organic Grapes Fresh

937,948

2018

Vietnam

2

Organic Apples Fresh

848,062

2018

Vietnam

3

Organic Vinegar and Substitutes

73,411

2018

Vietnam

4

Organic Oranges Fr/Dr

34,000

2018

Vietnam

5

Organic Peach/Nectarin Fresh

28,240

2018

Vietnam

Total

Total Organics*

1,955,937

2017

Vietnam

1

Organic Apples Fresh

1,052,695

2017

Vietnam

2

Organic Grapes Fresh

849,331

2017

Vietnam

3

Organic Lemons Fr/Dr

391,500

2017

Vietnam

4

Organic Cherries Fresh

184,874

2017

Vietnam

5

Organic Milk

66,740

2017

Vietnam

Total

Total Organics*

2,615,436

2016

Vietnam

1

Organic Apples Fresh

696,646

2016

Vietnam

2

Organic Grapes Fresh

597,343

2016

Vietnam

3

Organic Milk

234,865

2016

Vietnam

4

Organic Cherries Fresh

21,560

2016

Vietnam

5

Organic Peppers Fr/Ch

14,035

2016

Vietnam

Total

Total Organics*

1,564,449


Note : Total organics is the sum of all exports to a country within a year
Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2016 – 2019 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2016-2019 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s):

Ministry of Agriculture and Rural Development

Agency(s) Contact Information:

Ministry of Agriculture and Rural Development
2 Ngoc Ha Street
Ba Dinh
Hanoi
Vietnam
Phone: 84-4-8235804
Fax: 84-4-8230381 
Email: webmaster@agroviet.gov.vn
Website 

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard:

Standard Regulation for production and processing of organic agricultural produce in Viet Nam (No 10TCN 602-2006)

Certification and Accreditation

Certification:

Requirements for certification are not detailed in the national standard. Locally, small farms have turned to a participant guarantee system based on the national standards. International certifiers may be able to assist with certification in Vietnam.

Additional Information

Reference Standards:

The Vietnamese organic standards are based on the IFOAM guideline and the ISO 65 issued by Codex Alimentarius on organic.

Additional Information:

USDA's GAIN Report Vietnam Exporter Guide (2019)
USDA's GAIN Report Retail Foods Sector Report (2019)
USDA's GAIN Report Vietnam Food Processing Ingredients (2020)
USDA's GAIN Report Food Service - Hotel Restaurant Institutional (2019)
USDA's GAIN Report GVN Reformed Decree Guiding the Law on Food Safety (2018)
USDA's GAIN Report MOH revises Regulation on Food Safety Inspection for Import Foods (2016)
USDA's GAIN Report Vietnam Food and Agricultural Import Regulations and Standards - Narrative (2016)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Country Report (2020)
USDA's GAIN Report Food and Agricultural Import Regulations and Standards Export Certificate Report (2020)