Vietnam’s Food Service Industry: Consumer Behavior, Challenges, and Opportunities

Posted by Written by Celina Pham Reading Time: 4 minutes

Vietnam’s food services industry is thriving and expected to grow with a CAGR of 8.5 percent between 2022-2027. The trend of dining-out has been on the rise, especially among the youth who spend a large portion of their income on eating out. Vietnam Briefing examines Vietnam’s food service industry and identifies key opportunities for investors eyeing this dynamic market.

Vietnam’s 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 into eating out, signaling a robust progression of the industry.

The food service industry is projected to see 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 make up 72 percent of the industry revenue while the remaining 28 percent of revenue is sourced from street food, canteen, convenience stores, and hotel dining. Within the FSR sector, traditional dining restaurants are the dominant revenue generator while surging disposable income will be a key driver in the fine dining sub-sector by 2026.

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

Key trends and consumer behaviors

The food service industry in Vietnam is shifting towards a more customer-centric approach. In a more concise term, consumers are now more concerned with the experience they receive at the dining place than the food itself. Vietnamese consumers are increasingly concerned in how they are welcomed, serviced, and catered for at diners, while prices should not only match the quality of food but also the services entailed.

Changes in the mindset of the young and future generation mean their choice of restaurants has also transformed. A case study published in the Journal of Asian Finance, Economics and Business, pinpointed four factors that influence how Vietnamese consumers decide where to eat out: 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. Satisfying services and prices that match their experience and food quality are also factors that either turn them into loyal customers or one-time visitors.

Contradictory to expectations, the location of restaurants exerts minimal influence on choice. Young people now do not hesitate to travel the extra mile to a dining establishment that fulfills their demands.

A growing trend that has caught on lately, especially among the younger generation, is to explore hidden F&B establishments – a term to describe a mysterious setting that is not easy to find. The search for hidden restaurants or bars ramp up consumers’ excitement when they manage to locate the place.

On the spectrum of gender, males are more likely to eat out several times a day, several days a week, whereas females dine out at a lower frequency of several times a month. It was also recorded that unmarried people tend to dine out 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 commonly adopted by international food chains when penetrating Vietnam’s market, especially for quick-service restaurant chains like KFC, McDonald’s, and Lotteria.

When breaking down the dining habit of Vietnamese people, market research firm Decision Lab found that up to 53 percent of customers opt for traditional restaurants whereas only a low of 7 percent spend money on Western fine dining. This seven percent is mostly made up of people dining out on special occasions, and in business settings. Such low market share means current and future western restaurants should not expect local people to adapt to their way of operating. Instead, they should re-examine their strategies and try to somewhat localize the menu and get customers accustomed to their western image.

It should also be noted that, before COVID-19, the principal customer base of the food service industry was tourists. However, the core customer group has switched to middle-income locals who are hungry for dining out post-pandemic. Therefore, businesses in the industry are well-advised to adjust their strategies to better suit the demand of this burgeoning 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 surging 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 ramp up and costly logistic service is eating into their bottom line. Meanwhile, the pandemic has left many industries, especially service, with a shortage of human resources. This lingering issue is evident in all branches of the service industry as people are still reluctant to re-enter this market after the pandemic forced several businesses to lay off workers.

See also: How To Register a Franchise in Vietnam 


Competition within the food service industry in Vietnam is fierce, with parallel rates of new entrants and exits. Low entry barriers but with a high turnover rate mean players in the industry should adopt a proactive and flexible approach to adjust to consumers’ rapidly changing behaviors.

With rising disposable income and a young population, Vietnam is deemed to be a attrative 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.

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Vietnam Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in HanoiHo Chi Minh City, and Da Nang. Readers may write to for more support on doing business in Vietnam.

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