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Vietnam

Six trends refashioning Southeast Asia’s food scene

Article by JLL


As cultural landscapes change, so too do food trends. Drawing on influences from around the world, Southeast Asia is becoming a rapidly evolving hub for food and beverage retailers.

"Southeast Asia's food and beverage sector is more intense than ever," Gary Nonis, National Director, Retail at JLL, Singapore says. "Rapid population growth and urbanization across the region are the primary drivers for the sector's growth."

The landscape, however, is highly competitive with a number of trends intensifying at the same time. Here are six big influences on the local markets.

1.Healthy eating

Busy lifestyles in Singapore's CBD and a growing focus on fitness and wellbeing have fuelled growing demand for healthy eating options such as cold pressed juice bars. The local food scene has embraced these changing attitudes with a growing number of F&B outlets offering home-grown produce, organic options and made-to-order products. "Singapore consumers are becoming more aware of their lifestyle choices – what they eat and where their food has been sourced," Nonis says.

The city state has also seen a move towards mixed-use developments that incorporate healthy eating outlets with fashionable shops and boutique gyms to provide a one stop shop for people looking for health-conscious consumers.

2. High-quality food

Indonesia's growing middle class is developing a taste for socializing over meals out and trying out new food concepts such as the ever popular bubble teas. With more women joining the workforce and many people living busy urban lifestyles, many are choosing to eat out for convenience as well as for leisure. Market research group Nielson estimates that Indonesia's middle-income segment will have more than doubled in size by 2020, driving demand for high quality produce.

In turn this growing trend for eating out is proving opportunities for both local and international food retailers in big cities such as Jakarta, Medan, Bandung and Surabaya. James Austen of JLL's Retail Leasing, Indonesia says: "All the indicators are only pointing to the market getting stronger for F&B (Food and Beverage) operators, with more choices opening every year for Indonesians."

3. Dining in malls

As shopping malls spring up throughout Southeast Asia, food retailers are quick to snap up space to cater for hungry shoppers needing a quick bite to eat. In Vietnam, for example, 6 new shopping centers opened for business between 2014 and 2016 with more than  25 percent of the available space going to F&B retailers. Trang Bui, Diretor of Markets, JLL Vietnam said: "with demographic models young and active in Ho Chi Minh city, dining in the shopping center is the first choice of young people (especially at the weekend of holiday) when more and more brands and international food chains is becoming popular. Beside the quality food and service, these new element such as entertainment, cinemas or promotions that attract young people, family and friends to visit and dine at the shopping center"

In Thailand, pop-up restaurants are helping to boost the number of people visiting malls and the amount of time they spend there. In Bangkok, for example, mall operators have even used car parks to host food festivals.

4. Drive-thrus

Epitomizing convenience, drive-through dining is becoming increasingly popular in Bangkok as residents choose to purchase and consume food and drinks without leaving the comfort of their cars.

Big name brands, such as McDonald's which pioneered F&B drive thru retailing in Bangkok, along with KFC, Stabucks, Burger King and Dunkin Donuts, are expanding their presence across the city's suburban districts where more people are choosing to live. While F&B retailers are benefiting from increased revenue, with the quick-service format generating revenues 15-20 percent higher than normal, mainly due to lower staff costs and less food wastage, they also need to meet high consumer expectations in terms of menu range and speed in completing the order.

5. Fast and casual

The fast-casual sector – restaurants that offer high-quality ingredients without the table service – is making inroads in the region. Singapore-based LionRock Capital is behind Zest Group, which owns and operates Artisan Boulangerie, Twelve Cupcakes and Alt Pizza. It has built up 40 outlets in Asia in the last three years. Hari Kumar, co-founder of LionRock Capital, tells CNBC that the difference is the quality of the produce, with many products imported, and an emphasis on international trends. "Unlike other brands that customize products from country to country, we're all about international, cosmopolitan trends, not local markets," he says.

Elsewhere, private equity group Everstone Capital has snapped up established franchises as part of its F&B Asia Ventures portfolio.

​6. Enter the international brands

With coffee culture on the rise in Southeast Asia, big name chains including Starbucks and Dunkin Donuts are flocking to cities across the regions. Asian chains are also spreading throughout the region – for example, Singapore's BreadTalk and Chinese food chain Crystal Jade are building their presence.

It's not just about the cities; tourist destinations such as Bali are also on the radar with foreign companies expressing a strong interest in areas such as Seminyak and Ubud. The arrival of celebrity chefs is also helping to put Bali on the dining map with decorated local and international chefs such as Will Meyrick, Chris Salans, Nicolas Tourneville and Said Alem. "Much of the opportunity for international F&B outlets is in chic resorts, which have been seeing an influx of interest in the past few years," James Austen, JLL Retail Leasing says. "However, the arrival of these cult brands and international chefs has also helped spur development in the surrounding areas."