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Nutritional packaged F&B taking off

Released at: 19:11, 14/08/2017

Nutritional packaged F&B taking off

Photo: Duc Anh

Latest report from Kantar Worldpanel Vietnam reveals potential of nutritional food and beverages in Vietnam's FMCG market.

by Linh San

The in-home fast-moving consumer goods (FMCG) nutrition market (including dairy and products from dairy, soya milk, tonic food drinks, noodles and soups, biscuits and cakes, canned food, processed food, and frozen food) has grown at a compound annual growth rate of 10 per cent over the past five years and is forecast to hit $6 billion by 2020, according to recent data from Kantar Worldpanel Vietnam.

On average, each Vietnamese household spends more than 3 per cent of its total monthly income on nutritional packaged foods and beverages that they bring home to consume. And every year, urban households dedicate 10 per cent more to this spending and such spending in rural households is accelerating in line with higher health consciousness and better education. This raises some interesting questions for those looking to take a bigger slice of this growing pie, about why there is so much potential and how to tap into it.

According to Kantar Worldpanel Vietnam’s latest Lifestyle Report, it is now harder than ever for new brands and new products to gain consumers’ trust and be picked up from the shelf.

Consumers are more skeptical about the influence of media around them, such as news, ads, POSM (points of sales material), and promotions, as well as suggestions from others. In some ways, the more they see or hear the less they believe. This drives them to spend time seeking information to gain a thorough understanding of what they are going to buy before making any decision. By being connected to the internet via smartphones and other modern devices, this is easier than ever!

“Even in the complicated world of nutrition, what isn’t complex to observe is that people still want to eat things that taste good, are convenient, and are value for money,” said Mr. David Anjoubault, General Manager of Kantar Worldpanel Vietnam. “Going beyond just simple nutrition will help to explore the full potential of the food and beverage industry. Manufacturers should step into providing more innovative offers that are both nutritious and appealing to consumers. For example, fortified products, which offer more nutrients at a competitive price, liquid formats for ready-to-drink occasions, or even smarter and more functional packaging.”

Building trust is paramount, as a trustworthy image coupled with strong product quality management will help win consumers’ hearts. According to Mr. Anjoubault, however, at this moment, only around one-third of consumers in Urban or Rural Vietnam said they believe in the benefits claimed by products. In fact, there is no magic formula to build trust, but there are actions that businesses can take to maximize and maintain trust. Be sure that your products are accredited and searchable is the first step.

Nowadays, the nutrition market is more welcomed across Vietnamese age groups and is no longer limited to children.

Vietnam’s population is aging and the white space of the nutrition market for seniors seems compelling. The number of people older than 50 is rising and expected to account for 22 per cent of the country’s total population in 2020. Helping this group take care of themselves and proposing solutions for their children and grandchildren to take care of them is a viable strategy to invest in.

Today in Vietnam there is not a huge amount of product choices targeting this segment of the market and there is room to welcome more diverse offerings that meet the nutritional needs of seniors. It’s large population, most of whom are young, are more open to trying novelties, promising growth for new ideas and new products. There will be also a challenge, however, to retain these young consumers as they change tastes quite easily.

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