The bakery market in Vietnam is one of the most robust in the Asia-Pacific region. The bakery market enjoyed a compound annual growth rate of 7.6 percent over the period of 2010 to 2013, reaching VND10.4 trillion (US$0.5 billion) by the end of 2013. Having the current strong growth rate, the prospect of the bakery market in Vietnam is still on the rise. This expectation is supported by the continuing good performance of Vietnamese economy. Over the period of 2001 to 2010, the average GDP growth rate was up to 7.3 percent. What’s more, in 2014, the economy grew 5.98 percent, beating the government’s 5.8 percent target. Accompanied with the strong economic growth is the increasing income level and living standard. Thus Vietnamese have a larger demand for healthy food. This habit propels the bakery market in Vietnam.
Profile of the bakery market in Vietnam
Among the bakery products, bread retained its status as a primary consumption bakery product compared to other sub-categories (such as cakes and pastries), accounting for a 76.8 percent of total bakery market revenue.
Currently there are about 30 large bakery companies and hundreds of small bakery manufacturers. The Kinh Do Corp is currently leading the market in Vietnam. Its retail sales own a 12 percent of the total market share. In both 2013 and 2014, the company recorded the strongest value growth within the category, with its longstanding presence in this country, product quality and reasonable price.
The advantage local brands have over international ones
According to Daxue Consulting International’s report, in 2014, local brands of baked goods continued to grow. They gained an advantage over the international ones by regularly launching new products, expanding distribution networks. What’s more, government continued to provide support for the promotion of Vietnam products.
Special concern in the bakery market in Vietnam
Unlike the developing bakery markets in other countries where food safety issue is not a major concern for the consumers, the bakery market in Vietnam puts extra attention on the food quality. This phenomenon is mainly due to a number of food safety accidents happened in Vietnam in recent years. This is pushing the bakery standard and is beneficial to the bakery market in Vietnam in terms of increasing the food quality. Even though the special requirement might present challenges to some domestic bakery-makers while their expertise or capital is less advanced than those of some international chains, it helps them to be more innovative in their making method and to be more competitive when facing competitions from other firms.