Email Us:
October 12, 2022

Vietnam’s food services industry is booming and expected to grow at a CAGR of 8.5 percent between 2022-2027. The trend of eating out has increased, especially among those young people who spend a large part of their income on food. Vietnam Briefing examines Vietnam’s food service industry and identifies key opportunities for investors looking at this dynamic market.

The Vietnamese food service industry is one of the key drivers of the service industry. Thanks to rising disposable income, it is estimated that a third of monthly income goes to food, signaling a robust progress of the industry.

The food service industry is projected to witness a CAGR of 8.50 percent during the 2022-2027 period. According to the Vietnam Cuisine Culture Association, there are currently 550,000 F&B establishments in the country, 430,000 of which are traditional diners, 82,000 fast food restaurants, and 10,000 others.

Two key performers in the food service industry are full-service restaurants (FSR) and quick-service restaurants (QSR). These two together account for 72 percent of industry revenue, while the remaining 28 percent of revenue comes from street food, canteens, convenience stores and hotel dining. In the FSR sector, traditional fine dining restaurants are the dominant revenue generator, while rising disposable income will be a key driver in the fine dining subsector by 2026.

Food is typically seen among the male population, from 15 to 35 years old, whose income is between US$340 and US$1,300. They regularly eat for breakfast and lunch, while eating for dinner has more to do with meetings and special occasions.

Key trends and consumer behaviors

The food service industry in Vietnam is moving towards a more customer-centric approach. In a more precise term, consumers are now more concerned about the experience they get in the dining place than the food itself. Vietnamese consumers are increasingly concerned about how they are greeted, served and cared for at diners, while prices reflect not only the quality of the food, but also the services involved.

Changes in the mindset of the younger and future generations mean that their choice of restaurants has also transformed. A case study published in the Journal of Asian Finance, Economics and Business, identified four factors that influence how Vietnamese consumers decide where to eat: social influence, service, price and food.

Social influence includes promotion and reviews from influencers, key opinion leaders (KOLs), and celebrities as well as recommendations from their circle of acquaintances. Satisfactory services and prices that correspond to their experience and food quality are also factors that make them either loyal customers or one-time visitors.

Contrary to expectations, the location of the restaurants has minimal influence on the choice. Young people now do not hesitate to travel the extra mile to an eating establishment that meets their demands.

A growing trend that has caught on recently, especially among the younger generation, is to discover hidden F&B establishments – a term used to describe a mysterious setting that is not easy to find. The search for hidden restaurants or bars increases the enthusiasm of consumers when they manage to find the place.

Across the spectrum of gender, males are more likely to eat several times a day, several days a week, while females eat at a lower frequency of several times a month. It has also been recorded that unmarried people tend to eat more than their married counterparts.

Market characteristics: Opportunities and challenges

The food service industry of Vietnam sees a growing participation rate of international chains, at 43.7 percent by 2020, including McDonald’s, Lotte Group’s Lotteria, Pizza Hut, Jollibee, Pizza 4P’s, and KFC.

Franchising and sub-franchising are generally adopted by international food chains when penetrating the Vietnam market, especially for quick-service restaurant chains such as KFC, McDonald’s and Lotteria.

When breaking down the eating habits of Vietnamese people, the market research company Decision Lab found that up to 53 percent of customers opt for traditional restaurants, while only a minimum of 7 percent spend money on Western fine dining. This seven percent consists mostly of people who dine on special occasions, and in business settings. Such low market share means that current and future Western restaurants cannot expect local people to adapt to their way of operating. Instead, they should re-examine their strategies and try to localize the menu a bit and get customers used to their western image.

It should also be noted that, prior to COVID-19, the main customer base of the food service industry was tourists. However, the core customer group has shifted to middle-income locals who are hungry to eat after the pandemic. Therefore, businesses in the industry are well advised to adjust their strategies to better suit the demands of this expanding class.

Despite seeing strong demand after COVID-19, the food service industry in Vietnam still faces a host of challenges. The most prominent issue is the rising input and logistics costs. Amid a global input shortage, F&B businesses in Vietnam have also felt the impact of the crisis as imported food prices rise and expensive logistics services eat into their bottom line. Meanwhile, the pandemic has left many industries, especially service, with a shortage of human resources. This ongoing issue is evident in all branches of the service industry as people are still reluctant to return to this market after the pandemic forced several businesses to lay off workers.


Competition in the food service industry in Vietnam is fierce, with parallel rates of new entries and exits. Low entry barriers but with a high turnover means that players in the industry should adopt a proactive and flexible approach to adapt to the rapidly changing behavior of consumers.

With rising disposable income and a young population, Vietnam is seen as an attractive choice for F&B businesses looking to expand their business. For more information on how to set up an F&B establishment in Vietnam, contact our experts for an in-depth discussion.

Vietnam Briefing is produced by Dezan Shira & amp; Associates. The company assists foreign investors throughout Asia from offices around the world, including in Hanoi, Ho Chi Minh City, and Da Nang. Readers can write to for more support for doing business in Vietnam.

We also maintain offices or have alliance partners assisting foreign investors in Indonesia, India, Singapore, Philippines, Malaysia, Thailand, Italy, Germany and the United States, in addition to practices in Bangladesh and Russia.