What is FoodTech?
Different organizations have their own understanding and definition of what is Food Technology (FoodTech), and commonly many people like to associate FoodTech with Agricultural Technology (AgriTech) or Food Science with Technology. However, the FoodTech sector could be a broader term that involves the combination of digital technology with food production, food delivery, food preparation, selling of food products, food science, food processing, or other food-related services too.
Overview of Food-Related Market
- Food Market in Vietnam
- The Food Market includes the sales of all fresh and processed foods in Vietnam
- According to Statista, the Vietnam Food Market is estimated to generate a revenue of USD$88.5 billion in 2022, and is projected to grow at a Compound Annual Growth Rate (CAGR) of 8.37% from 2022 – 2027.
- Confectionery & Snacks segment is estimated to have the highest sales with about USD$13.18 billion in 2022.
- An estimate of 0.9% of the total revenue is projected to generate from online sales in 2022
- Food Service Market in Vietnam
- According to GlobalData, the Vietnam Foodservice Market generated a revenue of USD$28.4 billion in 2021 and it is estimated to grow at a CAGR of more than 19% from 2021 – 2026
- Key channels of the foodservice market include Bar, Club, Accommodations, Cafe, etc.
- The leading companies in the Foodservice market include Jollibee Foods Corporation, McDonald’s, and Yum! Brands.
- Food Delivery Market in Vietnam
- The Food Delivery Market contains 2 different delivery service solutions such as Restaurant-to-Customer Delivery and Platform-to-Consumer Delivery.
- According to Statista, the Vietnam Food Delivery Market is estimated to generate a revenue of USD$424.2 million in 2022 and it is projected to grow at a CAGR of 6.58% from 2022 – 2027
- The largest market segment is the Restaurant-to-Customer Delivery model with an estimated revenue of USD$332.2 million
- The online food delivery segment is expected to reach 19.5 million users by 2027, which is about 20% of the total population in Vietnam
- The user penetration in the Online Food Delivery market is estimated to be at 13.9% in 2022.
- With the increasing usage of smartphones and the internet within the population in Vietnam, Vietnam is expected to be one of the top growing markets for Online Food Delivery in Southeast Asia (SEA).
- Global FoodTech Market
- In 2019, a total of USD$423 million were invested in FoodTech and AgriTech startups across SEA, which was a 400% increase since 2014 and is expected to be more in the future.
- In 2019, the global FoodTech Market size was approximately USD$220.32 billion and is projected to reach up to USD$342.52 billion in 2027, at a CAGR of 6%.
- Food Delivery is one of the fastest growing and largest segments which accounted for about 57.1% in the FoodTech sector.
FoodTech Companies in Vietnam:
Below are some examples of FoodTech companies / startups in Vietnam with disruptive business model that has impacted our lives:
- Cooky is a digital listing platform for cooking recipes, started since 2015
- It offers more than 40,000 cooking recipes in both written and videos on its online portal
- It also provides offline cooking tutorial sessions
- With Cooky, you can now look for a variety of credible recipes easily in one platform.
Figure 1: Cooky.vn
- Foodhub, incorporated in 2019, is a food delivery platform that connects farm fresh foods to the consumers.
- It started during the Covid period, and its customer size has grown at least 3 times since its launch.
Figure 2: foodhub.vn
- Cricket One
- Cricket One, founded in 2017, is a cricket protein-based startup that provides cricket protein in different forms such as food, beverage, pet food and even cosmetics at an affordable price.
Figure 3: cricketone.asia
The Future of FoodTech
Due to Covid, customer behavior is changing, and more customers are starting to pay more attention to their diets, the food they have consumed, and the accessibility to different food products.
- The sales of healthy beverages rose by 12% and reach USD $4.9 billion in 2019
- 76% of Vietnamese consumers prefer to purchase food products that will inform them what has been added in the process.
- 89% of Vietnamese consumers are willing to spend more for food products with higher health benefits
Many companies or startups are tapping onto this emerging trend to reimagine how food is being produced, processed, and distributed to bring convenience and trust to the customers with digital technology. Furthermore, some startups are also exploring new flavors, presentations, or preparations of foods to continuously bring new excitement to the market.
However, the challenge for many FoodTech companies is how they can combine the food and the digital technologies like Artificial Intelligence (AI), Big Data, the Internet of Things (IoT), etc, innovatively yet has a great demand in the market.
Are you ready for the challenge, to tap into this emerging market opportunity in the FoodTech sector?
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