Vietnam Food Additives Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Vietnam Food Additives Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Vietnam Food Additives Market size is estimated at USD 0.99 billion in 2024, and is expected to reach USD 1.24 billion by 2029, at a CAGR of 4.70% during the forecast period (2024-2029).

Urbanization in Vietnam, combined with fast-paced consumer lifestyles, is driving the demand for convenience foods and ready-to-eat meals. These products often utilize food additives to enhance flavor, extend shelf life, and refine texture. The beverage sector, particularly non-alcoholic drinks such as tea, coffee, fruit juices, and functional beverages, has seen significant growth in recent years. As consumers crave varied flavors, beverage manufacturers are turning to flavor enhancers, sweeteners, acidity regulators, and coloring agents to satisfy this appetite. Moreover, in September 2023, Vietnam's Ministry of Health (MOH) unveiled Circular 17/2023, amending several food safety regulations. Key changes include updates to MOH’s Circular 24/2019 on food additives and revisions to Part 7 of MOH’s Decision 46/2007, which lists approved food processing aids. As the market adapts to these regulatory changes, a surge in demand for compliant, high-quality food additives is expected. To meet the rising demand for top-tier and safer food offerings, Vietnamese firms in the food additives domain are obtaining certifications such as ISO, Halal, Kosher, and FDA approval, enhancing their product credibility on both domestic and international fronts. These additives, spanning flavor enhancers, preservatives, and processing aids, align with increasing consumer inclination towards healthier, safer, and diverse food choices, propelling the growth of the food additives market. Furthermore, major players are broadening their reach within the ASEAN region and beyond, tapping into the burgeoning potential of the food additives market.

Vietnam Food Additives Market Trends

Sweeteners Lead as the Top Additive in Food Processing

In Vietnam, robust economic growth and shifting consumer preferences are driving a surge in spending on sweetened food items. The rising middle class, with its increasing disposable income, is fueling a demand for indulgent treats and processed foods. This trend is further amplified by the growing embrace of Western diets and lifestyles, which lean heavily on sugar-sweetened products. Modern retail channels are expanding, making these sweetened products more accessible and boosting consumption rates. The demand for sweeteners in food and beverage processing is on a pronounced upswing. This is highlighted by a projected jump in sugar consumption among 40 major enterprises, forecasting an increase from about 323.54 thousand tons in 2023 to an estimated 510.8 thousand tons by 2028, translating to a surge of over 50% in just five years, as reported by the Vietnam Agriculture Report. The report also notes that in 2023, sugar consumption saw a 60-thousand-ton rise from 2022, reaching 382.66 thousand tons. Refined sugars (RE) led the consumption chart, making up 77.5% (or 296.68 thousand tons) of the total in 2023. The beverage sector emerged as the dominant player, accounting for 70% (171.2 thousand tons) of the RE sugar demand. On the other hand, the food industry took the largest share of refined sugars (RS), consuming 65% or 59.2 thousand tons. Given the robust growth of the processing and beverage sectors, businesses anticipate a continued rise in industrial sweetener consumption in the years ahead.

Beverage Industry Leads in Food Additive Consumption

In Vietnam, the production and launch of diverse beverages are propelling the demand for various additives. As companies aim to craft distinctive and enticing flavors, there is a heightened reliance on specialized ingredients, including food colorants, flavor enhancers, and sugar substitutes. This trend not only aligns with consumer desires for innovative and healthier choices but also invigorates the market for beverage additives. This emphasis on additives could pave the way for intensified research and development endeavors, reshaping the market landscape. For instance, in October 2024, Coca-Cola, in partnership with the OREO brand, unveiled two exclusive offerings in Vietnam: the OREO Coca-Cola Sandwich Cookie and the Coca-Cola OREO Zero Sugar Limited Edition. The Coca-Cola OREO Zero Sugar drink was crafted using ingredients like phosphoric acid, food colorants, and the sugar substitute aspartame. Responding to a surging appetite for clean label products, Vietnamese beverage brands are increasingly gravitating towards natural colorants, flavors, and preservatives, distancing themselves from synthetic additives. This trend is especially pronounced in ready-to-drink tea and juice sectors, where there is a clear preference for natural color additives. In August 2024, TH true TEA, a leading Vietnamese brand, introduced two fresh ready-to-drink teas: Peach Tea and Lychee Tea. Upholding their "four no's" commitment, no preservatives, no artificial flavors, no artificial sweeteners, and no artificial colors, the brand proudly highlighted its use of 100% natural ingredients. This included a focus on natural flavors and sweeteners, such as stevia.

Vietnam Food Additives Industry Overview

The Vietnam Food Additives market is characterized by a high degree of competition, featuring a mix of both global and domestic players. Notable companies in this landscape include TTC AgriS, Quang Ngai Sugar Joint Stock Company, The KCP Limited, LASUCO, and Viet Huong Flavour & Fragrance JSC. To gain a competitive advantage, these companies are not only innovating but also employing diverse strategies, including expansions. By establishing new factories and making substantial investments, these players are broadening their footprint and expanding their customer base. Furthermore, many companies have set up local manufacturing facilities, enabling them to swiftly respond to demand and curtail import-related costs. By establishing creative centers and sales offices in key locations, they maintain proximity to the market, allowing for a dynamic response to local needs.

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