Finding whitespace opportunities in fast-moving consumer goods (FMCG) has become one of the top priorities for many manufacturers, as FMCG sales growth has been volatile over recent years. 

In that context, one category showing ample growth opportunity is snack foods, which is a rare global and local growth story. The snacks business grew $3.4 billion globally in 2017. 

In Vietnam, food was also among Top 3 fastest growing super categories in 2017, according to the latest Nielsen Vietnam report, “What’s Next in Food?”.

Nielsen’s data, measured in both traditional and modern trade channels nationwide, indicate that the sale of food increased 7 per cent year-on-year in 2017 and contributed 16.3 per cent to total FMCG sales. 

However, when zooming in on food by segment, the growth of regular categories (instant noodles, soy and oyster sauce, fish sauce, and MSG - Bouillon) was not as fast as in impulse categories (such as biscuits, cake pies and snacks), especially snacks, which enjoyed impressive growth of 21 per cent last year.​

“Snacks enjoyed significant growth in many markets around the globe thanks to increased snacking products,” said Mr. Nguyen Anh Dung, Executive Director of Retail Measurement Services at Nielsen Vietnam. 

“This impressive growth in so-called indulgence or non-essential categories is a good indicator that consumers in many countries are ready and willing to spend beyond their daily necessities, creating a good opportunity for FMCG companies in these markets.”

The report also indicated that manufacturers have introduced many new products (more than 2,000) in Vietnam, but less than 15 per cent have been successful. “Analyzing the successful cases, we found that only those products that could satisfy new consumer needs, offer new value to consumers, and approach consumers at the right places can be successful,” he added.

Vietnam’s growing middle class has fanned aspirations for consumers to trade up and enjoy the perceived additional quality and functional benefits of more premium products. When it comes to premium, price is not the key element in defining what is premium and what is not. Consumers are also seeking food products offering new values, good quality, and distinctive packaging.

“Convenience continues to be the need in our busy, fast-paced Vietnam market,” Mr. Dung said. 

“Small format stores such as convenience stores and minimarts have expanded significantly in the last two or three years to adapt to the changing lifestyles of consumers. This trend requires food manufacturers focus on strategies to capture demand for smaller pack types, single serves, and on-the-go solutions.”

VN Economic Times