The growth prospects of the domestic food and beverage industry are expected to be positive next year buoyed by new consumption trends, according to experts.

According to VNDirect Securities, consumer spending with a shift to fresh and packaged foods, Vietnam News Agency reported.

A survey on consumer spending plans under the impact of the COVID-19 pandemic conducted by Deloitte showed that consumers will increase their spending on fresh and packaged foods by 84 per cent and 70 per cent respectively due to goods hoarding in the pandemic.

Global financial services provider Fitch Solutions reported Viet Nam's spending on essential goods, such as food and non-alcoholic beverages, housing and utilities, is estimated to grow between 8 per cent and 10 per cent year-on-year in 2022 and 2023 respectively, driven by rising spending post-pandemic.

The new consumption trends will become a growth driver for the food and beverage industry in 2022.

Domestic demand for high-end consumer goods is also increasing. With roughly 100 million people, Viet Nam is the world’s 17th largest country in terms of population. The country is achieving the highest GDP growth rate in ASEAN, with the compound annual growth rate for the 2018-20 period reaching 6.9 per cent.

According to Fitch Solutions, Viet Nam's disposable income per household will reach US$6,848 by 2024, with a compound growth rate of 8 per cent in the 2020-24 period.

A rapidly rising middle-income class and increasing disposable income will boost the country’s demand for luxury products.

According to VNDirect Securities steady growth of per capita income and controlled inflation and foreign exchange rates will help local people access high-end products.

The COVID-19 pandemic will also affect consumer perception of health issues, thereby increasing the demand for high quality products that meet health requirements.

In addition, according to VNDirect, modern sales channels will create new growth drivers for the food and beverage industry.

The COVID-19 pandemic has changed consumption trends, creating opportunities for modern distribution channels to develop rapidly as consumers prefer shopping online or supermarkets to buy quality and origin-stated products to protect their health.

Analysts said firms in the food and beverage industry with strong modern distribution systems, such as dairy producer Vinamilk and Masan Consumer Corporation, could benefit from changes to further grow in the long term.

However, experts have noted that despite the positive outlook, there were still potential risks related to the pandemic and input costs that could affect the food and beverage industry next year.

If the pandemic lasts longer than expected, it will cause disruptions in the industry’s supply and distribution chains.

The industry’s profits will also be affected adversely if input material costs are higher than expected. — VNS