Vietnam's H1 F&B revenue rises slightly amid cost pressures

Vietnam’s food and beverage (F&B) industry generated VND406.1 trillion ($15.4 billion) in revenues in the first half of 2025, equivalent to 58.9% of 2024’s figure and up slightly from VND403.9 trillion ($15.3 billion) a year earlier, according to a new report by iPOS.vn.

The modest increase fell short of expectations, as analysts had projected double-digit growth for the period this year, noted the provider of restaurant management solutions.

“Rising costs have left businesses with little room for promotions or price cuts,” said Nguyen Do Anh Quan, brand director of iPOS.vn, at the report’s release event on Friday. “The cautious revenue uptick reflects a balance between purchasing power and operating expenses,” he added.

Inflationary pressure remains the key macroeconomic headwind. Vietnam’s consumer price index (CPI) rose 3.27% year-on-year in H1, with food and beverage prices up 3.69%, pork surging 12.75%, and housing and utilities climbing 5.73%. The resulting cost inflation has tightened profit margins across the sector.

iPOS.vn forecasts full-year industry growth at around 9.6%, in line with earlier projections.

Second wave of shakeout

As of June 30, Vietnam had 299,900 F&B outlets, down 7.1% from the end of 2024, the report said. Both Hanoi and Ho Chi Minh City saw double-digit declines of more than 11%, signaling a marked slowdown in the country’s two largest markets.

Quan described this as the “second wave of industry shakeout,” noting that many small operators open and close within just two or three months due to limited financial capacity or uncertain prospects.

Among 830 surveyed businesses, 34.8% reported stable revenue and 19.2% saw growth above 5%. Nearly 54% of enterprises either grew or held steady year-on-year, marking a recovery from 40.2% in the same period of 2024. However, 17.9% suffered revenue drops of over 20%, up from 14.3% a year earlier.

Around 45.3% of F&B firms raised prices in H1/2025, mostly by 5-10%, citing higher input costs (35.4%), macro policy and tax changes (21%), labor costs (20%), and rent (13.7%).

“The ability to price effectively has become the benchmark for adaptability,” Quan said. “Brands with strong identity and loyal customers can raise prices, while those competing solely on price struggle to survive.”

One notable trend in H1 was the rise of ultra-low-cost models in HCMC, such as milk tea at VND7,000 ($0.27) a cup or hotpot meals at VND69,000 ($2.62) per set. While these outlets attract heavy traffic, Quan described them as a “thin-margin, high-intensity game” sustainable only for chains with exceptional supply and cost control.

Shifting consumer behavior

A survey of more than 1,200 consumers in Hanoi and HCMC found that Vietnamese diners are eating out more often but spending more selectively, according to the report.

For lunch, the share of respondents not eating out dropped from 7.4% to 3.5%, while those spending under VND30,000 ($1.14) doubled, reflecting a growing appetite for affordable dining.

For dinner, the proportion spending over VND100,000 ($3.80) per person rose from 12.4% last year to 19.8%, indicating a shift toward value-driven dining experiences.

Weekend spending also increased, with 14.8% of respondents spending VND301,000-500,000 ($11.4-19) and 9.3% spending above VND500,000, benefiting mid- to high-end segments.

The rate of F&B businesses planning expansion rose to 67.7% by mid-2025, up from 58.4% at the end of 2024. “Last year was a year of caution, and 2025 is a year of action,” Quan said, noting that firms that weathered the toughest years are now ready to reinvest and regain market share.

Still, consumer caution lingers. Around 54.4% of respondents plan to maintain spending levels, 37.9% expect to cut, and only 7.7% intend to spend more.

“Growth will not come from customer volume,” Quan concluded. “It will come from higher average bills through combos, experiences, and value-added services.”