Vietnam sees a shift in consumption pattern

Vietnam has been in step with the rest of Asia in its demand for RTE and RTC products during the crisis. The trend is expected to persist now that the country has reopened its economy, writes HA THU.

RTC/RTE foods gain ground

As the country lifted social distancing restrictions on April 22, consumers are less anxious. Restaurants and street food stores have reopened.

But consumers have gotten used to ‘eating at home’. This practice is expected to remain strong ‘post-Covid’, and will see the demand for RTC & RTE products grow.

“It is obvious that packaged frozen products are being sought after. This sector will see sharp growth as they muscle-up to satisfy the safety-nutrition-convenience criteria, especially in the pandemic period,” Nguyen Quoc Trung, General Director of 3F Viet Food told Asian Agribiz.

In its latest report on ‘Initial Impacts of Covid-19 on Vietnam FMCG In-home Purchases 2020 (urban 4 key cities of Vietnam)’, Kanta Worldpanel found that “convenient foods and cooking aids surged during the outbreak.

Frozen food, canned food, instant noodles and cooking oil are a few categories enjoying impressive growth.” According to the report, frozen food sales has increased 121%, while instant noodles, canned food and processed food enjoyed 65%, 64%, and 52% growth respectively.

“The processed meat sector will continue to grow strongly after Covid-19. There has been a report that Vietnam’s processed meat sector will grow five times to 2.5 million tons by 2025,” said Mr Trung.

“Our sales of processed chicken saw strong growth last month. That is positive as we launched it in March,” he added.

Online sales will gain ground

With the new habit of ‘eating home’, online shopping and home delivery are becoming an inevitable part of this trend.

Last month, due to social distancing protocols, 100% of 3F Viet’s food sales was online.

The company expects this trend to continue to dominate the shopping behavior of consumers post-Covid.

“We are conducting a market survey of consumers’ insights and behavior toward online shopping. Based on the results, we will create an online sales platform, where consumers can order and have our RTC products delivered to their homes with just one click,” said Mr Trung.

Shoppers at the supermarkets told Asian Agribiz they choose RTC/RTE product because it can be stored for a long time (compared to fresh foods), is convenient, and provides multiple options for different ages

A way out for sluggish poultry sector

The growth of RTC and RTE products provides an avenue for poultry producers, who are going through a difficult time, with oversupply and low demand.

It is estimated by the Ministry of Agriculture that the country’s poultry population in December increased by 14.2% over the same period in 2018. The total output of live poultry meat for the whole year was estimated at over 1.2 mt, up 16.5% compared to 2018.

This growth in volume was spurred by poultry as an alternative to  pork because of ASF. But Covid-19 surfaced, causing the closure of institutional kitchens, leading to a decline in chicken consumption and meat prices.

“Covid 19 will affect any business. 3F Viet Food is no exception. As for output, consumption demand has decreased due to travel restrictions, students are off from school for a long time,” said Mr Trung.

“RTC will be a way for the poultry industry to both improve competitiveness and push the industry to new heights,” he added.

3F Viet Food started investing in RTC in Q3, 2019. The company’s r&d team has collaborated with sales & marketing to conduct market researche to understand consumer trends and demands.

“We understand each of our target customer group and are tailoring products according to their preferences,” said Mr Trung.

During the Tet holidays in Janary, the company tested its RTE samples and received positive feedback, giving it the confidence to launch the first RTE product on March 21.

“In 2020, our slaughtering and processing plant will be upgraded from a capacity of 24,000 head/day to 48,000 head/day.  We will install further processing machines to produce RTC and RTE products with the expectation of reaching a capacity of 7000 tons/year,” added Mr Trung.

Processed foods occupy a larger space at supermarkets as consumption is expected to increase sharply post Covid-19