Adapting to Challenges: Vietnam's Food & Beverage Sector in Q1/2025 and The Road Ahead

Vietnam’s economy showed strong recovery in Q1/2025 with 6.93% GDP growth, supporting F&B sector momentum. Despite export gains, domestic F&B revenue fell due to post-Tet slowdown and rising costs, pressuring profitability. The sector is expected to recover gradually, with firms urged to diversify markets, boost efficiency, and adapt to shifting consumer trends.

Vietnam's macroeconomic landscape in Q1/2025 demonstrated solid recovery momentum, highlighted by a GDP growth rate of 6.93%, the highest for the first quarter in the 2020–2025 period. Regarding the food & beverage manufacturing & processing (F&B) sector, here are some key highlights that you might be interested in: 

(1) Macroeconomic Support for F&B Growth: The  positive macroeconomic environment in Q1/2025 has created favorable conditions for the growth of Vietnam's Food & Beverage industry, driven by rising consumer confidence and strong export demand. 

(2) Sector Performance: 

•  Mixed results: F&B revenue dropped 10.1% QoQ due to a 15.4% decline in domestic sales post-Tet, reflecting seasonal spending patterns and inflationary pressures. Meanwhile, the strong export growth partially offset those domestic challenges. 
• Profitability pressures: Rising costs from raw materials, logistics, and exchange rate fluctuations, combined with the drop in price of some traditional products, have squeezed profit margins. In addition, the impact of new U.S. tariffs also created challenges for sustained growth. 

(3) Outlook for the Sector: The F&B sector is expected to gradually recover, with continued export momentum in high-value segments such as processed foods and seafood. Domestic demand is likely to improve in the summer, though inflation and reduced purchasing power remain concerns. 

(4) Adaptation Strategies for Businesses: 
To navigate challenges, businesses should: 

• Diversify export markets (e.g., EU, China) to mitigate U.S. tariff impacts. 
• Emphasize innovation, sustainability, and operational efficiency to align with changing consumer preferences. 
• Strengthen supply chains and implement automation to manage costs and improve resilience. 

These insights highlight the need for strategic adjustments and proactive measures to capitalize on growth opportunities while addressing external pressures. 

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FiinGroup is well-positioned to assist companies in navigating challenges of the F&B sector. We provide comprehensive sector insights, detailed profiles of industry players, and customized services. For tailored support, please contact our team at BI_cs@fiingroup.vn 

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