Market Trends of Vietnam Fruits And Vegetables Industry
Increasing Population and Rising Government Support are Driving the Market
The growing population and rising disposable income are key drivers of the Vietnamese fruits and vegetables market. Vietnam's population, which is anticipated to reach over 100 million by 2024, is experiencing a significant demographic shift, including urbanization and an expanding middle class. This urban migration has led to increased demand for convenient, fresh, and nutritious food options, particularly fruits and vegetables. As people move to cities, their access to a wider variety of produce improves, fueling the market's growth. According to the data of the United Nations - World Population Prospects, the population of Vietnam increased by 1.42% in 2023 from 2021.
Rising disposable income is another crucial factor propelling the market. Vietnam's GDP per capita has been on a steady rise, leading to higher purchasing power among consumers. For instance, according to the World Bank data, the per capita GDP of Vietnam rose to USD 4,346.8 in 2023 from USD 3759.9 in 2021. This economic upliftment allows consumers to spend more on quality food products, including fruits and vegetables.
Additionally, favorable Government support plays a pivotal role in the growth of the Vietnamese fruit and vegetable market. For instance, the World Economic Forum (WEF) selected Vietnam as one of the first three countries to pilot the Food Innovation Hub, a flagship initiative of the Food Action Alliance designed to improve sustainability in food production. Furthermore, in 2022, the Ministry of Agriculture and Rural Development (MARD) approved four Overseas direct assistance (ODA) projects and announced investment policies with a total loan value of USD 840 million. The ministry also coordinated with businesses and prepared 14 new project proposals requiring a total capital of USD 3.2 billion. All these factors are related to the development of food production, including fruit and vegetables, in the country, which is anticipated to drive the market’s growth during the forecast period.
Increasing Demand for Banana is Expected to Drive the Market
Banana is Vietnam's most important traditional fruit, both in terms of historical and economic significance. It is also an essential fruit for the Vietnamese, widely known as 'Chuoi.' In Vietnam, large varieties of bananas are grown, including Chuoi Tieu, Chuoi Qua Tạ, Chuoi Ngu, Chuoi Sap, Chuoi Cau, and Chuoi Su. Although each variety has a different taste and characteristic, all varieties have a natural and sweet taste. Chuoi Tieu and Chuoi Qua Tạ are used in medicine for anti-inflammatory protection and the treatment of high blood pressure.
The consistent domestic demand has encouraged farmers to expand banana cultivation, utilizing advanced farming techniques to boost yield and quality. For instance, according to data from FAOSTATS, the production of bananas has increased from 2.51 million metric tons in 2022 to 2.34 million metric tons in 2021. Regions like the Mekong Delta and the Central Highlands are the key banana-growing areas, contributing significantly to the overall production.
Furthermore, Vietnam has capitalized on the rising global demand for bananas, especially in markets like China, Japan, and South Korea. Vietnamese bananas are priced for their taste and quality, leading to a steady increase in export volume over the past few years. For instance, the export quantities of bananas from the country to the global market have grown to 430,261 metric tons in 2022 from 357,551 metric tons in 2021, according to the ITC trade map. Domestic and international demand for Vietnamese bananas is projected to rise during the forecast period.
