F&B business sales decline
In 2023, the Vietnamese economy experienced many difficulties, the business model in the F&B (Food and Beverage) sector, a type of culinary, restaurant, and catering service, also faced many difficulties. Mr. Vu Thanh Hung - General Director of iPOS.vn Joint Stock Company - said that the revenue of the F&B industry in Vietnam is expected to grow by 18%, reaching 720,300 billion VND. The potential F&B market is expected to return, marking a rapid growth rate, with great purchasing power and attracting the attention of many domestic and foreign investors.
"The global economic crisis has also affected the Vietnamese economy. The economic recession of many major economies has caused a decline in consumer purchasing power. Along with the wave of layoffs in many businesses, the income of a segment of workers has decreased, and they have to worry about "tightening their belts", causing customers' spending on F&B products to decrease. High input costs have caused businesses in the industry to face fiercer competition. All of these difficulties have caused F&B business sales to decline," said Mr. Hung.
Don't wait for the market, be proactive in adapting.
According to Mr. Ngo Nguyen Kha - CEO of The Coffee House - in October 2023, the purchasing managers index (PMI) of the Vietnamese manufacturing industry was still below the 50-point threshold, which shows that the health of the manufacturing industry is declining. The decline in output and new orders shows that in the next 6 months, consumers will continue to tighten spending, businesses will have high inventories, many workers will have no income or will have a sharp decrease. Regarding investment, businesses are also hesitant to expand production and business, invest more, but want to preserve capital, wait for the right time.
"In the context of economic difficulties, although demand has not cooled down, young people tend to choose products in the cheaper price segment, or reduce the amount of money spent each time, the frequency of visiting the store has also decreased slightly according to statistics, from an average of 2 times/week to about 1.8 times/week. When customers are still tightening their spending, they only decide to buy when they see the value of the product by comparing the amount of money spent with the quality of the product. Customers also look for convenience when making purchases. In particular, they are regular customers of many delivery platforms and make good use of the promotions on these platforms," said Mr. Kha.
In addition, the 2023 F&B market witnessed the coming and going of a series of food and beverage trends, such as soursop tea, mangosteen chicken salad, salted coffee, coin cakes, or most recently, hand-pounded lemon tea. However, the common point of these trends is that they only last for a short time, about 3 months. At the same time, most of the people directly participating in the trends are groups of small shops, kiosks, and household businesses.
The business director of a coffee chain believes that when F&B businesses are in the midst of these trends, they must determine how far they can follow the trend. If they cannot follow, they should accept being left out. Implementing a short-term trend product for a large chain of stores is difficult and can easily fail.
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