Leveraging Vietnam’s Shift Towards Healthy and Sustainable Living: A Guide for Global Retailers

Vietnamese consumers are increasingly opting for home-cooked meals, paying more attention to fresh food selection, and prioritizing health and sustainability. This article explores how international retailers can leverage this trend to capture a growing market.

Understanding the Trend

Vietnam, a nation rich in culture and tradition, is experiencing a significant shift towards healthy and sustainable living. As environmental concerns and awareness of individual well-being grow globally, Vietnamese consumers are increasingly making eco-friendly and responsible consumption choices. With a burgeoning consumer class and rapid urbanization, the market potential for sustainable products and services in Vietnam is substantial.

Key Drivers of the Trend

Consumer Awareness

Vietnamese consumers are becoming more aware of environmental pollution and the importance of sustainable products. A PwC survey found that over 90% of respondents are willing to pay more for products with verified origins and sustainable materials. This awareness has driven demand for sustainable options, prompting companies to adopt strategies that emphasize transparency, eco-labeling, and sustainable practices.

Expanding Consumer Class

According to McKinsey & Company, 37 million more individuals in Vietnam will join the consumer class (spending at least US$11 per day) over the next decade. The Ministry of Construction estimates that as of September 2022, there are 888 urban areas across Vietnam, with an urbanization rate of approximately 41.5%. This growing consumer class and rapid urbanization increase the demand for high-quality food products. As disposable incomes rise, consumers seek better-quality and safer food options, prioritizing nutritious, hygienic, and internationally certified products.

Challenges for Retailers

High R&D Costs

Retailers face high costs in research and development (R&D) to keep up with the healthy living trend. Developing innovative and nutritious products requires substantial R&D investments, which can be financially challenging.

Sourcing Suitable Suppliers

Finding suitable suppliers for high-quality and organic ingredients is another significant challenge. The local market may have a limited supply of such suppliers, and maintaining reliable and consistent supply chains to meet stringent quality standards can be problematic. Overcoming these challenges requires diligent research, new partnerships, and navigating cultural and language barriers.

Strategies for Success

Promote Local and Sustainable Products

Retailers can create dedicated sections in stores or special displays to highlight locally sourced items, emphasizing their origin and environmental benefits. Collaborating with local farmers and producers can strengthen supply chains and build community support. Engaging with sustainability-focused organizations and certifications can enhance credibility and trustworthiness.

Highlight Health Labels and Certifications

Retailers should prominently display health labels and certifications on product packaging and in-store displays. Providing detailed explanations of these labels through signage and educational materials can increase consumer awareness. Collaborating with health experts for workshops or events can reinforce the importance of informed, health-conscious choices.

Select Suitable Suppliers

Effective supplier selection strategies are crucial. Retailers should define health and sustainability criteria and assess potential suppliers’ adherence to these standards. Prioritizing transparent supply chains and certifications, such as organic and fair trade, is essential. Collaborating with innovative suppliers investing in R&D and considering local sourcing can also be beneficial. Negotiating fair prices and fostering open communication ensure a dynamic supply chain aligned with the healthy living trend.

Market Growth Outlook

The trend towards healthy and sustainable living is reshaping consumer preferences in Vietnam, presenting retailers with significant growth opportunities. By tapping into this trend, retailers can boost sales and drive positive changes in Vietnam’s eating habits. Embracing sustainable and health-focused practices will position retailers as leaders in a rapidly evolving market.