In 2023, the F&B industry, despite its vibrant culinary trends in the short term, still faces the common challenges of a weak economy and low purchasing power. However, according to Mr. Vu Truong Giang – founder of Ka Coffee chain – who has nearly 12 years of experience in the industry, F&B will continue to be a sector that attracts significant investments in 2024.
“Unlike other sectors such as real estate which currently have a low capital absorption capacity, there is still a lot of idle capital in the population. F&B, in any case, is a sector where capital investment can generate immediate cash flow. Therefore, there will be many people investing in F&B in 2024. The difficulty in consumption remains the same, which means investing but not being able to sell easily. Nevertheless, there are still many people investing in F&B, resulting in increased market competition and more companies being eliminated,” Mr. Giang predicted in a special episode of the series Chapter 0 produced by Rising Vietnam.
Sharing the same view, Ms. Nguyen Thanh Lam – Founder of Carrot Solution – a company specializing in providing marketing solutions for F&B businesses, said that since the beginning of 2024, she has met with many Korean and Chinese brands entering the Vietnamese market.
In fact, 2023 has witnessed the vibrant activities of many foreign F&B brands, especially in the beverage sector in the Vietnamese market, such as Mixue and Cotti Coffee… Among them, Mixue, despite facing conflicts related to franchisee rights, is still considered a successful model. However, according to the founder of Ka Coffee, the coffee industry will not be as “easy to play” as the bubble tea industry.
“The coffee standards in Vietnam are high, and the demand for coffee is more about the experience rather than just buying and taking away. Online orders account for about 7 parts for bubble tea and only 2-3 parts for coffee. Therefore, coffee models are less likely to be overwhelmed by foreign brands,” said Mr. Vu Truong Giang.
Mr. Vu Truong Giang – founder of Ka Coffee chain
Therefore, even though foreign coffee brands enter Vietnam with large resources and well-established models, domestic businesses can still compete thanks to the element of “experience.” Founder of Ka Coffee mentioned that the experience is not something that can be bought immediately but begins with details and touchpoints, from people. Customers can experience a brand through any channel and anywhere, making it difficult to imitate. For example, businesses can create a beautiful image on social media platforms, but the experience can also come from small touchpoints like security guards. For the Gen Z generation, they no longer rely too much on words and theories but tend to seek personal experiences.
“Corporate culture creates the experience. It is both a challenge and an opportunity. If Vietnamese businesses can do it, they will be strong,” said the founder of the chain of 5 Ka Coffee stores. Building an experience must first be suitable for the target customer group of the brand. Secondly, it involves utilizing the power of the corporate culture, which is self-awareness.
According to Mr. Giang, in the F&B industry, the hotel industry often has many employees but low income levels, making it difficult to get everyone to work toward the same goal. However, it is possible to build a culture with high self-awareness. For example, most restaurants have a list of tasks that need to be checked daily. Ka Coffee is the same. However, the list is not created by leaders or managers but by the store team themselves. The task list at each store is different because the facilities are different. This helps employees feel less pressured to complete tasks assigned by supervisors and instead allows them to work on tasks that they set for themselves. If done well, this will create a good enough experience for customers at each location.
According to Ms. Nguyen Thanh Lam – Founder of Carrot Solution, building an experience starting from the corporate culture is not an easy task. “Do founders truly care about their employees? How can you make your employees feel like this is truly their home and they want to take care of that home, bringing positive energy and warmth to customers? If we treat our employees well, they will treat customers well,” she expressed.
Ms. Nguyen Thanh Lam – Founder of Carrot Solution
For decades, the F&B market, especially the coffee shop model, has welcomed many international brands such as Starbucks, Gloria Jean’ Coffees, NYDC, Coffee Bean & Tea Leaf, % Arabica, etc… However, most of them have silently left the market one after another. Currently, Starbucks is considered the most successful international brand in Vietnam with over 100 stores.
