Food makers need to keep up with consumer trends

Nielsen Vietnam General Director Nguyen Huong Quynh

Could you tell us about consumer trends that are affecting Vietnamese food processors?

Regarding consumption in general and food consumption in particular, three main trends affect all production sectors, especially the food industry in Vietnam:

1. Consumers are willing to pay more for high-end and more prestigious products;

2. Consumers are increasingly interested in health protection and products meeting food safety and hygiene standards;

3. Consumers are increasingly connected to the internet and e-commerce, which expose them to diverse choices and influence their preference for higher value, safe products over cheap ones.

How should Vietnamese producers change their development?

Vietnamese food producers are focusing on exports while not paying due attention to the domestic market, or just selling what they have and not paying due attention to what consumers want. They should know that the domestic market has a high potential. While foreign food processors and retailers are finding ways to enter and dominate the Vietnamese market, many Vietnamese businesses are unmindful of it. Our first recommendation for them is to give certain priority to the domestic market.

Vietnamese consumers should be the core and starting point of every business and product development strategy. According to many reviews by foreign businesses, producers should change their products after one night - not several years as they did before, because consumers are increasingly connected to the internet and always want new, improved products.

Low price takes second place for consumers to high quality, safety and transparent information.

Packaging and design are also important for a producer to persuade consumers to choose his or her products instead of ones by his or her rivals in the context of increasingly competitive markets.

Most Vietnamese food processors are small to medium-sized. How do you suggest they adapt to new trends?

Small to medium-sized Vietnamese enterprises have just provided the market with what they have and haven’t kept up with new consumer trends or what consumers are demanding and will demand.

Vietnam is a very complex distribution market and one of the countries accommodating the largest number of stores and outlets in the world. There are about 1.5 million fast consumer goods stores in Vietnam. According to Nielsen surveys, the producer that possesses the strongest retail distribution system in Vietnam is only able to directly reach about 35 percent of those stores.

Therefore, apart from creating good products and understanding consumers, businesses should have effective distribution channels to bring new, fresh food products to customers. They should cooperate with each other in production, distribution and promotion in order to improve competitiveness.