RICE, PASTA AND NOODLES IN VIETNAM - ANALYSIS

Country Report | Nov 2023

KEY DATA FINDINGS Market Sizes

Retail value sales rise by 6% in current terms in 2023 to VND63.8 trillion Sales of Rice, Pasta and Noodles
Rice is the best performing category in 2023, with retail value sales rising by 11% in Retail Value RSP - VND billion - Current - 2009-2028
current terms to VND23.4 trillion
Acecook Vietnam JSC is the leading player in 2023, with a retail value share of 21%
63,807 Forecast
120,000
Retail sales are set to rise at a current value CAGR of 10% (2023 constant value CAGR
of 6%) over the forecast period to VND104 trillion 100,000

2023 DEVELOPMENTS 80,000

Retail prices increase, alongside greater potential for rice exports

60,000
Retail prices of rice, pasta and noodles in the Vietnam continued to rise in 2023. While
inflationary pressures began to ease, the ongoing war in Ukraine had a major impact on 40,000
the prices of key raw materials, due to the disruption of the global supply chain. With
Vietnam importing the majority of its raw materials, such as wheat powder, from other
countries, it was susceptible to fluctuations in international commodity supplies and 20,000
prices. While manufacturers tried to their best to limit any price increases in order to
stimulate sales, they were forced to pass on their increased costs to their customers. As 0
a result Vietnamese consumers traded down to less expensive options, such as instant 2009 2023 2028
noodles.
In 2023, unpredictable weather across Asia had a negative impact on rice production,
which is a staple of the Vietnamese diet. In July, India, the world largest rice exporter, Sales Performance of Rice, Pasta and Noodles
imposed a ban on rice exports to ensure domestic supply. This affected the unit price of % Y-O-Y Retail Value RSP Growth 2009-2028
rice and products made from rice in Vietnam, although it also created opportunities for
local companies to export rice overseas. With greater export opportunities, the
government introduced new agricultural reforms to ensure the quality of its rice,
5.8% Forecast
20%
including a move towards more sustainable farming methods. This marked a change of
course for a country which had previously prioritised quantity over quality.

Manufacturers adopt a variety of strategic approaches in bid to boost 15%

sales
Acecook Vietnam Ltd Co remained the leading player in rice, pasta and noodles in 2023,
supported by its broad product portfolio of brands, including Hao Hao, Handy, Modern 10%
and Mien Phu Huong, which are mainly targeted at the mid-priced segment. However,
the company lost share in its key subcategory of noodles during the course of the
review period, due in large part to increased competition from smaller players listed
5%
under “others”. The company was also the subject of negative publicity in August 2021,
when certain batches of its Hao Hao instant noodles exported to Ireland were recalled
by the authorities, due to the presence of the unauthorised pesticide, ethylene oxide.
In 2023, the company offered discounts for its Hao Hao and De Nhat branded instant 0%
noodles in order to help consumers through the tough economic period. The company 2009 2023 2028
also cooperated with Vietnam Children's Fund to implement the "Happy Noodles”
programme, which supplied rations to disadvantaged children in mountainous and
highland areas.
Sales of Rice, Pasta and Noodles by Category
Second-ranked Masan Consumer Corp meanwhile, owes its success to its Omachi and Retail Value RSP - VND billion - Current - 2023 Growth Performance
Kokomi brands, both of which are present in noodles. With its higher than average unit
price. Omachi is a premium range of instant noodles, and as such, targets the higher Noodles
income segment. Consistent with this image, the brand benefits from high-quality 39,889.3
packaging and a relatively high amount of dried meat in each product. During 2023, Pasta
Omachi hosted a series of promotional dance events at Thao Cam Vie, the largest zoo in 535.3
Ho Chi Minh City. Each event, which featured prominent TikTok influencers and other Rice
social media influencers, promoted a different flavour of Omachi Spaghetti noodles, 23,382.4
including egg, beef and tomato. These provided an opportunity for parents (and their 0% 10% 15%
young offspring) to experience the brand in a new fun and playful way.
RICE, PASTA AND NOODLES 63,807.0 CURRENT % CAGR % CAGR
YEAR % 2018-2023 2023-2028
Third-placed Uniben JSC meanwhile, produces the 3 Mien range of instant noodles. GROWTH
During 2023, the company supported farmers in implementing a safe and clean
vegetable production model according to VietGAP standards. Vegetables are one of the
key ingredients in Uniben's 3 Mien noodles, with coriander being used in the
production of its seasoning packs, for example. This reflects a more general trend
towards greater food quality and safety across the supply chain.

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Greater diversity of flavours Competitive Landscape
The trend towards diversification continued in 2023. Vietnamese consumers were
increasing willing to experiment with new flavours from other countries, such as South Company Shares of Rice, Pasta and Noodles
Korea, Japan or Western Europe, especially younger generations, who were more likely % Share (NBO) - Retail Value RSP - 2023
to have been exposed to outside influences. Of particular note here was the growing
Acecook Vietnam JSC 20.8%
influence of social media, which served to accelerate the development of international
trends and extend their reach. Manufacturers also made greater efforts to launch new Masan Consumer Corp 13.2%
products to excite the senses, such as instant noodles with a spicy kimchi flavour or Uniben JSC 6.3%
spaghetti sauces with an Italian fluence, for example.
Asia Foods Corp 4.2%
Pack sizes of dry instant noodles also increased, as manufacturers such as Acecook
Saigon Vewong JV Co 1.7%
Vietnam Ltd Co and Masan Group sought to offer consumers better value for money.
Consumers also showed an increasing preference for instant noodle cups, rather than Safoco Foodstuff JSC 1.3%
pouches, due to their offer of greater convenience. Thien Huong Food Co 1.2%
VIFON - Vietnam Food Ind... 1.1%
PROSPECTS AND OPPORTUNITIES
Colusa Miliket Foodstuff... 1.1%
Continued growth expected, as rice transitions away from a commodity Paldo Vina Co Ltd 0.8%
product Vietnam Food Corp 0.6%

Retail volume sales of rice, pasta and noodles will register a gradually improving rate of Longan Co Ltd 0.6%
growth during the forecast period, in line with the improving economic situation. This An Giang Import Export J... 0.6%
will be led by the dominant category of rice, which is vital part of Vietnamese culture
and an accessible source of nutrition for a large portion of the population. Nissin Foods Vietnam Co ... 0.5%
Loc Troi Group JSC 0.5%
Indeed, rice is also likely to become less commoditised over the forecast period as
consumers become more willing to trade up to higher quality products,. The potential Asia Food Technology Co ... 0.5%
for an upmarket move in rice is also being enhanced by the fact that local rice Nongshim Co Ltd 0.4%
manufacturers are now paying more attention to export opportunities and are hence
Tien Giang Food Co Ltd 0.4%
embracing more sustainable farming methods. As consumers became more aware of
the environmental and social benefits of sustainable rice, they will be more likely to Uni-President Vietnam Co... 0.3%
pay a fair price for the product. Instant noodles and pasta, meanwhile, still have
Others 44.0%
potential for future growth, commensurate with the trend towards as busier lifestyles
in urban areas.

Healthier lifestyles offer opportunities for manufacturers

Brand Shares of Rice, Pasta and Noodles
During the forecast period, consumers are set to become even more knowledgeable % Share (LBN) - Retail Value RSP - 2023
about food, more sophisticated in their tastes and, crucially, more health conscious.
This will act as a spur to new product development, with a particular emphasis on Hao Hao 8.5%
products with a health-orientated positioning, such as those offering a reduced salt and
fat content or added fibre, protein, vitamins and minerals. In noodles, for example, Vina Acecook 7.0%
there will be a growing demand for products made from alternatives to wheat, such as Omachi 6.7%
legumes and vegetables. These products not only eliminate gluten but also typically
Kokomi 6.5%
contain higher amounts of fibre and contain fewer calories than their wheat based
counterparts. 3 Mien 6.3%

The number of Vietnamese consumers choosing to follow a plant-based diet is also Gau Do 4.2%
increasing and this will drive a higher demand on vegan noodles, which still suffer from Hao 100 2.4%
a lack of product availability or investment from brands. In rice meanwhile, organic rice,
A-One 1.7%
which is produced in accordance with specific guidelines and quality standards will be
increasingly sought after by higher-oncome consumers who will be willing to pay more Modern 1.4%
for sustainably sourced certified products. Brown rice may also see a boom in demand, Safoco 1.3%
given the growing health consciousness of the population.
Vi Huong 1.2%
Traditional retail channels will remain important Hao Hao Handy 1.1%

Small local grocers is expected to remain the dominant channel for the distribution of Koreno 0.8%
rice and noodles in Vietnam during the forecast period, Such outlets have a wide Colusa 0.7%
coverage across the country and are deeply ingrained in Vietnamese culture, and
Vinafood 0.6%
benefit from a high degree of familiarity and trust, with consumers often developing a
strong relationship with the owner. Consumers also believe that their local “mom and Longan 0.6%
pop” stores offer cheaper prices than modern channels. However, modern retail An Giang all brands 0.6%
channels are growing, alongside rapid urbanisation, with more supermarkets opening
in suburban areas. Supermarkets and hypermarkets are increasingly preferred over wet Vifon 0.5%
markets and street stalls by younger generations due to the perceived better product Nissin 0.5%
quality control in these modern channels. These outlets also offer wide and plentiful
Others 47.4%
product ranges, while also being the source of attractive promotions and discounts,
which appeal to cost-conscious shoppers. 5-Year Trend
Increasing share Decreasing share No change
E -commerce will continue to expand in big cities, where the promise of fast delivery,
time-saving convenience and a wider product/brand choice will find favour with
consumers. Another key growth driver of online shopping will be widespread use of
discounts/promotions, together with free shipping fees.

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