Foodservice Industry Seminar 2018 Foodservice Solutions How is Decision Lab tracking Foodservice Consumption?

• Since April 2016, Decision Lab is tracking the out of home eating and drinking market in the key cities , and

• The Foodservice Monitor tracks all food & drink consumed out of home on a daily basis with an annual sample size of 15,000 completed interviews

• The respondents are Vietnamese consumers aged 15+ who also report on the consumption by children (under 15 years) who were present at the eating out occasion Methodology

HOW WE TRACK OUT - OF- H O M E CONSUMPTION We cover three main cities HA NOI. 40%

DA NANG 752,057 10% ONLINE VIETNAMESE COMMUNITY MEMBERS

HO CHI MINH Annual Sample: 50% 15,000 in HCMC, Hanoi, Danang are asked about what they ate and drank out of home on the previous day The data is extrapolated HA NOI. based on the GSO’s yearly 5,204,798 population projection DA NANG 750,561 12,387,681

Total HO CHI MINH 6,432,322 adult population (Vietnamese aged 15 years old and above in HCMC, Hanoi, Danang) We monitor 7 Main Channels

FINE DINING FAST CASUAL Average spend above Average spend under VND110K per person). Fine VND110K per person & pre- Dining is segmented by coded chains). Fast Casual is cuisine type (Vietnamese, segmented by cuisine type Japanese, Korean, Chinese, (Vietnamese, Japanese, FULL SERVICE French, Mexican etc.. Korean, Chinese, French, Mexican etc.), Fast Casual example chains: Kichi Kichi, (FSR) Gogi House, Vietnammm, , Mon Hue, Thai Express etc.. We monitor 7 Main Channels

QS /TEA QS BBQ QS PIZZA (Highlands Coffee, (Domino’s, Pizza Inn etc.) QS JAPANESE etc.) QS ICE CREAM QS VIETNAMESE QS BURGER (Fanny, Baskin Robbins (McDonald’s, , QS CHINESE etc.) etc.) QUICK SERVICE QS THAI QS JUICE/SMOOTHIE RESTAURANTS QS CHICKEN BAR QS INDIAN (QSR) (KFC, etc.) (Jamba Juice, Jungle Juice QS KOREAN etc.) QS SANDWICHES/WRAPS/ QS FRENCH QS OTHER KEBAB/ (, Tous Les Jours QS MEXICAN etc.) We monitor 7 Main Channels

STREET FOOD ALCOHOL CONVENIENCE HOTELS CANTEEN PLACES STORES Food & Drink bought Establishments • Workplace providing from: Outlets that mainly Standard convenience • School accommodation, • Wet market serve alcohol: store such as meals, and other • University FamilyMart, 7-Eleven • Street vendor • Bar services for travelers that also offers meals • Club and tourists. • Mobile cart (some heated up) to • Karaoke eat on- or off-premise Track record in F&B industry How has 2018 been for ’s Foodservice industry?

LET’S TAKE A LOOK! Vietnam AVERAGE EATER SPENDING/ VISIT (IN VND) AVERAGE ANNUAL VISITS / CAPITA Foodservice HANOI TOTAL HCMC TOTAL 61,771 133 Monitor 4% 59,903 8% 8% 154 5% HCMC HCMC 59,929 9% 170 5%

DA NANG DA NANG 49,236 15% 166 4%

KEY INDICATORS FOR YEAR

ENDING Q3 2018 40T 800M Sales Visits 750M 35T 700M 30T 33.7T 650M 25T 31.4T 31.6T 31.6T 30.2T 29.7T 600M 28.0T 27.6T 20T 26.0T 25.6T 550M 500M 15T 450M 10T 496M 492M 478M 474M 400M 453M 452M 5T 436M 443M 435M 418M 350M T 300M Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 2017 2018 The diverging development paths of FSR and QSR • Market share of FSR & QSR across demographic groups - % visits

Market share of FSR and QSR across demographic groups - % visits

50% These two channels 39% 40% currently 34% 30% 30% account for the 30% 28% 28% 28%28% 25% 25% 25% 24% 25% majority of 22% 20% OOH visits by consumers 10% across all demographic 0% Male Female 15-24 25-34 35+ Ha Noi HCMC groups in Gender Age group Location Vietnam Full service Restaurants (n = 10,288) Quick service Restaurants (n = 7,293)

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018

14 • Market share of FSR & QSR - % visits and servings

Market share of Full Service (FSR) & Quick Service (QSR) restaurants - % visits and servings

35% Full service 32% 33% 29% and Quick 30% 26% service 25% restaurants are 21% 20% 20% 17% the two most 14% 15% important

10% channels for

5% Manufacturers of various 0% Total OOH visits Total Non-alcohol RTD Total Alcohol Total Dairy-based product consumption consumption product consumption categories Full service restaurants (n = 10,288) Quick service restaurants (n = 7,293)

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018

15 • Visits to Full service & Quick service restaurants by quarter (in million)

Visits to Full Service (FSR) & Quick Service (FSR) restaurants by quarter (in million)

170M Starting from 150M 151M +11% Q3 2017, Full 150M 138M 140M 151M service 144M 145M 130M 138M 122M 142M 135M 131M 114M restaurants 129M 109M 110M 102M 118M 98M officially took

90M over as the -21% largest 70M Foodservice 50M channel in Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Vietnam 2016 2017 2018 Meanwhile, Quick service Full service Restaurants (n = 10,288) Quick service Restaurants (n = 7,293) segment continued to slip away from its past heyday.

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018

16 The growth of Full service restaurants has been fueled mostly by women, and consumers above 35 years old

Year over Year Traffic Growth rate of key demographic groups in FSR

20% 20% 20% 18%

15% Channel’s growth 12% 12% 12% 11% 10% 8% 7% 7% 4% 5% 5% 3%

0% Male Female Ha Noi HCMC Da Nang 15-24 25-34 35+ Class A Class B Class C Class D

Gender Location Age group SEC

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 n = 10288

17 • Visit and Average spending per head per visit to Full service Restaurants

Visit and Average spending per head per visit to Full service Restaurants (FSR) +11% Indeed, 160M 151M 250K improving 138M 135M 140M 131M 145M 200K traffic has 129M 142M 118M been the key to 120M 150K the revival of

100M 100K Full service 95K 89K 89K 85K 88K 78K 83K 77K restaurants 80M 50K

-7% 60M 0K Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 2017 2018

Visits Average spending per head per visit

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 n = 10288

18 Within Full service channel, Casual restaurants serving BBQ and Japanese dishes are the ones with highest growth rate in 2018

• YOY Traffic growth of key sub-segments in FSR

Market share of key sub-segments in FSR - YOY Traffic growth of key sub-segments in FSR % visits

FCR Vietnamese 60% 53%

1% Fine Dining 40% 1% 8% 37% Vietnamese 40% 1% FCR Italian Kitchen 2% 20% 13% 2% FCR BBQ 5% 4% 3% FCR Hotpot 0%

FCR Korean -20% -23% 81% FCR Japanese -40% Other FCR FCR BBQ FCR Hotpot FCR Fine Dining FCR Korean FCR Italian Japanese Vietnamese Vietnamese Kitchen

n = 10288 n = 10288

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 19 Meanwhile, Quick service outlets have been suffering from declining visits from all consumer groups, especially the lower middle class and people aged 25+

• Year over Year Traffic Growth rate of key demographic groups in Quick service restaurants

Year over Year Traffic Growth rate of key demographic groups in Quick Service Restaurants (QSR)

Gender Location Age group SEC

Male Female Ha Noi HCMC Da Nang 15-24 25-34 35+ Class A Class B Class C Class D 0%

-5% -10% -7%

-16% -20% -18% -20% -20% -22% -23% Channel’s growth -25% -30% -21% -32% -35% -40%

-45% -50%

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 n = 7293

20 Visit and Average spending per head per visit to Quick service Restaurants (QSR)

170M 250K It is 151M plummeting 150M 138M 140M 200K footfall that

130M 122M has damaged 114M 150K 109M Quick service 110M 102M 98M 100K restaurants 90M 68K 58K 62K 57K 51K 54K 50K 52K over the past 2 50K 70M years

50M 0K Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 2017 2018 Visits Average spending per head per visit

21 Among various types of Quick service outlets, Cafes, and Juice/Smoothie shops are those that witness the biggest drop in visits

Market share of key sub-segments in QSR - % visits YOY Traffic growth of key sub-segments in QSR

Juice/ QS Smoothie QS Vietnamese Vietnamese Cafes Bakery restaurants shops 0% 8% 5% Coffee/Tea 8% 32% Bakery -10% -10% Fast Food -20% -17% 22% Juice/ Smoothie -22% 25% -30% Other -29% -30%

-40%

n = 7293 n = 7293

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 This does not mean Vietnamese are cutting down on these products. On the contrary, consumption of coffee, juice, and smoothies has increased in the past year

Coffee beverage* servings Juice & Smoothies* servings Baked goods* servings

400M 300M 6% 4% 27% 271M 329M 254M 600M 567M 543M 300M 258M 200M 400M 200M

100M 200M 100M

0M 0M 0M Q4 2016 to Q3 Q4 2017 to Q3 Q4 2016 to Q3 Q4 2017 to Q3 Q4 2016 to Q3 Q4 2017 to Q3 2017 2018 2017 2018 2017 2018

* Include non-RTD, freshly prepared * Include non-RTD, freshly prepared *Baked goods include types of drinks only n=2237 drinks only n=2805 bread, sandwich, cookies, cakes, etc. n=5206

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 Vietnamese are switching to other channels to consume these daily food and drink items, leaving QSR to suffer

YOY Traffic growth with Coffee* YOY Traffic growth with Juice/Smoothie* YOY Traffic growth with Baked goods consumption in channels - % visits consumption in channels - % visits consumption in channels - % visits

120% 120% 117% 120% 99% 100% 100% 100% 87% 80% 80% 80% 59% 60% 60% 60% 39%43% 40% 40% 40% 18% 20% 19% 20% 12% 14% 20% 20% 6% 9% 0% 0% 0% -3% -4% -20% -20% -9% -20% -40% -29% -40% -40% -29% Total OOH QSR Total OOH QSR Total OOH QSR FSR Street food FSR Street food FSR Street food CVS Canteen CVS Canteen CVS Canteen

*Including Non-RTD, freshly *Including Non-RTD, freshly n=2237 prepared juice/smoothie only n=2805 n=5206 prepared coffee only

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018 So, what are the key takeaways? It’s a mixed bag of opportunity and challenges

Vietnamese have started to come back to Full However, their spending per visits has not really service restaurants improved over the past year

It’s still a tough game for Quick service ➢ Operators do need to re-evaluate the effectiveness restaurants, especially those selling Coffee/ Tea, of their promotional campaign and make some Juice/ Smoothie, and Bakeries. changes that aim at higher consumer spending.

➢ Manufacturers should also look into how to present and serve your products in a better way that can bring up the check size.

The problem is not consumers’ declining consumption of these products. It is the competition from other low-end channels

➢ It’s highly time to differentiate and communicate to your core consumer base. The March of the Women

26 “Women are the CEO of the household. They often act as the chief purchasing officer. They purchase on behalf of themselves, but also their husbands and kids.”

Mary Van Note, partner of Ginger Consulting LLC, a Minneapolis-based branding firm that’s served names in the industry such as Starbucks, McDonald’s, , and Sonic Drive-In.

27 The myths about female diners

28 MYTH 1: Women are more likely to be concerned about health when eating out

Compared to men, a significantly lower proportion of women state “health” as a driver to select a foodservice outlet

MEN WOMEN 16% 12% CHOSE HEALTHY FOOD AND CHOSE HEALTHY FOOD AND DRINKS AS THE REASON TO VISIT DRINKS AS THE REASON TO A CERTAIN OOH OUTLET CHOOSE A CERTAIN OOH OUTLET Women are also less health-conscious about their food selections than their counterparts

MEN WOMEN 19% 15% CHOSE HEALTH AS THE REASON CHOSE HEALTH AS THE REASON OF CERTAIN FOOD CHOICE OF CERTAIN FOOD CHOICE Women only show more deliberate health concern when it comes to the drinks they consume

MEN WOMEN 21% 26% CHOSE HEALTH AS THE REASON CHOSE HEALTH AS THE REASON OF CERTAIN DRINK CHOICE OF CERTAIN DRINK CHOICE MYTH 2: Women prefer to sit down and enjoy their meal on premises

Women consume on-premises much less than men. They instead show a higher preference for off-premises consumption

MEN WOMEN 60% 47% OF MALE OOH VISITS WERE ON OF FEMALE OOH VISITS WERE ON PREMISE PREMISE MYTH 3: Women love a good discount and would use vouchers much more than men

Women and men are not so different when it comes to using vouchers/promotions for eating out

MEN WOMEN 6% 7% OF MALE OOH VISITS UTILIZED OF FEMALE OOH VISITS UTILIZED VOUCHERS VOUCHERS Who are the typical female consumers in the Out of Home market?

The 15-34 year-olds account for 82% 814 mil. of the female visits, and more than FEMALE OOH VISITS IN THE PAST half of the visits come from white- YEAR* collar workers. Students are also proven to be the driving force of • 15 - 34 female visits at 25%. • White collar and students

• Classes C or D (SEC)

* Source: Decision Lab Foodservice Monitor Aggregate data from Q4 2017 to Q3 2018 To be fair, the traffic growth in the past year came from both genders, with men bringing in the bigger increase

AVG. ANNUAL VISITS PER CAPITA

Q4-16 | Q3-17 Q4-17 | Q3-18

Male 172 183 7%

Female 121 128 5%

Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018 n = 27591 However, male consumers’ spending has dropped dramatically

Q4-16 | Q3-17 Q4-17 | Q3-18 70,230 đ 60,034 đ 15%

42 While female consumers have started to spend visibly more

Q4-16 | Q3-17 Q4-17 | Q3-18 57,829 đ 59,732 đ 3%

43 YOY Average spending growth by Gender

20% Indeed, 16% 15% women have 12% spent more for 10% 5% 5% Out of Home 5% 2% 2% 1% Male consumption 0% Female across all the -5% -4% channels in the -10% -9% -10% -12% past year -15%

-20%

-25% -22% FSR QSR Street food CVS Canteen Alcohol places

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 27591 The boost in women’s spending partly comes from their increased preference to consume both food and drink when going out

YOY Traffic growth by consumption type – in % Average spending by consumption type – in VND

30% 23% EAT ONLY 20% 16% 42,907 VND 10% 2% 0% 0% -2% EAT & DRINK -10% -12% 81,224 VND -20% Eat only Drink only Eat & Drink

Male Female FEMALE AVERAGE SPENDING IN TOTAL OOH

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 27591 n = 13339

45 As a result, women’s contribution to the market revenue has increased by a whopping 10%

FROM Q4 2016 – Q3 2017 FROM Q4 2016 – Q3 2017 TO Q4 2017 – Q3 2018 TO Q4 2017 – Q3 2018 -8% +10%

MALE SALES CONTRIBUTION TO THE TOTAL OOH FEMALE SALES CONTRIBUTION TO THE TOTAL OOH

n = 14252 n = 13339

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 Women consume Out of Home much more than men during daytime snacking occasions 3.7 billions VISITS TO OOH OUTLETS IN YEAR ENDING Q3 2018 32% Male Female 30% 31% 18% 14% 24% 12% Male visits are concentrated on 6% Breakfast and Lunch, while 11% 9% 9% female visits are more spread out 3% across occasions. Breakfast Morning snack Lunch Afternoon snack Dinner Late night snack

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 Preference in Full Service & Quick Service Restaurants by Gender - % visits

100% When it comes 5% 7% 1% 8% 4% to cuisine 12% 80% 8% selection, 12% 14% women are

60% 11% more keen to try foreign 40% cuisine and 65% 52% visit outlets 20% that offer non-

0% Vietnamese Male Female dishes VN Cuisine Coffee/Tea Bakery Non-VN Cuisine Juice/Smoothie Other

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 17578 Among the foreign cuisines, women are showing more and more appetite for Hotpot, BBQ and Japanese food

YOY Traffic growth of cuisines in Foreign cuisines

100% 68% 68% 62% 47% 50% 27% 30% 19% 2% Male 0% -2% Female -13% -15% -21% -27% -50% -33% -52% -71% -100% Fast Food Italian Kitchen BBQ Hotpot Japanese Korean Other Asian Western

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 2962

*Low sample size (<30). Use with caution Implications

FOR MANUFACTURERS FOR OPERATORS

• For Food manufacturers, convenient • The growing influence of women on the foodservice market is solutions for take-away and deliveries real: they are going out more and they are willing to spend to ease the off-premise consumption more

will definitely get the interest of the • They are not as health conscious when eating out as perceived female population so no need to stress out on healthy food options for now.

• For Drink manufacturers, “health” is • Make sure most of your offerings include both food and drink important in your key product items to capture women’s habit. message. In addition, make sure you • Look into your menu to see if you can tailor particular items to have products that capture women meet women’s snacking needs. during daytime snacking occasions.

51 Vietnamese’ quest to explore foreign cuisine Definitions

TOTAL CUISINE VIETNAMESE CUISINE Quick service restaurants and Full service restaurants Quick service restaurants and Full service restaurants that serve cuisines as below: specialized in Vietnamese cuisine. Pre-coded chains • Vietnamese include: • Fast Food • Mon Hue • Italian Kitchen • Pho 24 th • Western • 37 Street • BBQ • Wrap & Roll • Hotpot • Hoang Yen • Japanese • Com Tam Cali • Korean • Net Hue • Other Asian (e.g. Chinese, Thai, Indian) • Pho 10 Ly Quoc Su and etc.

*Quick Service outlets such as Coffee/Tea, Bakery, Juice/Smoothie and Ice Cream are excluded

53 Definitions

FAST FOOD ITALIAN KITCHEN WESTERN Quick service restaurants Full service restaurants specialized Quick service restaurants and Full specialized in fast food. Pre-coded in Italian cuisine and pizza. Pre- service restaurants specialized in chains include: coded chains include: higher-end burgers, French and • KFC • Pizza Hut Mexican cuisines. Pre-coded chains include: • Lotteria • Pizza Company • Al Fresco’s • Jollibee • Pizza 4P’s • Relish & Sons • Domino’s Pizza • Capricciosa • Jaspas • Burger King • Pendolasco • District Federal • McDonald’s • Namo Artisanal Pizzeria • Bonjour Resto • Five Star Chicken and etc. and etc. and etc.

54 Definitions

BBQ HOTPOT JAPANESE Quick service restaurants and Full Full service restaurants specialized Quick service restaurants and Full service restaurants specialized in in Hotpot. Pre-coded chains service restaurants specialized in BBQ, regardless of the grill style include: , including , (e.g. Western, Japanese, Korean…). • Kichi Kichi and outlets. Pre- Pre-coded chains include: coded chains include: • Hutong – Hot Pot Paradise • Quan Ut Ut • Sushi Hokkaido Sachi • Ashima • SumoBBQ • Deli • Hotpot Story • Gogi House • Marukame Udon • ThaiExpress • King BBQ • Daruma • MK Restaurants • Tasaki BBQ • Sushi Kei and etc. • Mr. Park • YEN Sushi & Sake Pub • Pepper Lunch • Sukiya • Hotto • NamBento and etc. and etc.

55 Definitions

KOREAN OTHER ASIAN Quick service restaurants and Full service restaurants Quick service restaurants and Full service restaurants specialized in Korean cuisine, including Korean fried specialized in Chinese, Thai and Indian cuisine. Pre- chicken outlets. Pre-coded chains include: coded chains include: • K-Food • Crystal Jade Kitchen • Poki Poki • San Fu Lou • Mi Han Quoc • Baozi • Hanuri • Bamboo Dimsum • GAXEO Chicken • Lac Thai • Don Chicken • Tuk Tuk Thai Bistro • Papa’s Chicken • Tandoor and etc. • Spices and etc.

56 Preference of cuisines in Full Service and Quick Service Restaurants - % visits The dominance of Vietnamese

80% 5% 2%1%1%1%1%%1% cuisine in the Out of Home market is undisputable 0% 20% 40% 60% 80% 100%

Vietnamese Fast Food Italian Kitchen BBQ Hotpot Japanese Korean Western Other Asian

*Full Service and Quick Service Restaurants, excluding Coffee/Tea, Bakery, Juice/Smoothie and Ice Cream n = 13730 outlets Besides the obvious advantage of convenience, Vietnamese cuisine claims its dominance thanks to the innate ability to replace home cooked meals

Reason for outlet choice - % visits

60% 53% 47% 44% 41% 40% 36% 37% 40% 35% 33% 32% 33% 31% 30% 27%

20%

0% Convenient Did not want to Quality of food Clean Taste of food Good value for Friendly service location cook environment money

Vietnamese Cuisine Non-Vietnamese Cuisine

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 13730

58 Vietnamese dishes are typically chosen to satisfy hunger , conveniently, and at a good value for money

Reason for food choice - % visits

60% 51%51%

40% 35% 30% 27% 27% 24% 23% 25% 22% 21% 21% 20% 17% 13% 10% 9%9% 8% 6% 5% 2%3% 0% Favorite dish Convenience Good value Hunger To energize Health To share To eat alone To treat To try Other for money myself something Vietnamese cuisine Non-Vietnamese cuisine new

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 9511

59 Fast food, the biggest type of non-Vietnamese cuisine consumed, has been suffering from a significant lost of traffic year over year…

Market share of non-VN cuisines in FSR and QSR in year ending Q3 2018 - % visits Fast food outlet visits

1%

Fast Food 8% BBQ 9% Other Asian 39% 9% Hotpot -17% Italian Kitchen 10% Japanese YOY TRAFFIC GROWTH Korean 10% 13% Western

n = 2962

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 YOY Traffic growth of non-VN cuisines

60% …leaving the 46% 49% market to the 37% 40% giant hands of 23% 20% players

0% specialized in -6% BBQ, Hotpot -20% -17% and Japanese -40% cuisine -40%

-60% -61%

-80% Fast Food BBQ Other Hotpot Italian Japanese Korean Western Asian Kitchen

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 2962

61 • YOY average spending growth of non-VN cuisines

Average spending per head per visit and YOY growth among types of Non-Vietnamese cuisine

271K 280K Among the 3 75% 225K 210K 209K rising cuisines, 184K 191K Hotpot is the 50% 105K 42% only one that enjoys the 25% 16% luxury of 12% 5% 1% increasing 0% consumer -2% -3% -10% spending in the -25% past year Fast Food BBQ Other Hotpot Italian Japanese Korean Western Asian Kitchen

YOY average spending growth % Average spending in year ending 2018 (VND)

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n = 2962

62 Consequently, the market pie has shifted significantly: further away from Western foods and heavily toward Asian-centric cuisine

Market share of non-VN cuisines in FSR and YOY sales contribution growth of non-VN cuisines QSR in year ending 2018 - % sales 80% 59% 51% 43% 38% Fast Food 40% 34% 8%1% BBQ 23% 10% Japanese 0% Hotpot 11% Italian Kitchen 20% Other Asian -25% 12% -40% Korean -42% 14% Western -59% -80% Fast BBQ Japanese Hotpot Italian Other Korean Western Food Kitchen Asian

n = 2962 n = 2962

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 63 Young female consumers are the core growth engine for restaurants offering the 3 cuisines over the past year

BBQ HOTPOT JAPANESE YOY VISITS INCREASE YOY VISITS INCREASE YOY VISITS INCREASE +4.0m +2.5m +2.8m

↓ ↓ ↓

73% FROM FEMALE 15-34 51% FROM FEMALE 25-34 51% FROM FEMALE 15-34 23% FROM MALE 25-34 33% FROM MALE 15-24

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 64 The drivers of consumer choice for these cuisines may differ, but all hint at Vietnamese’ underlying expectations toward a dining destination

BBQ Hotpot Japanese Restaurants: Restaurants: Restaurants:

CELEBRATION/ TREAT GOOD FOR SOCIALIZING QUALITY OF FOOD/DRINK QUALITY OF FOOD/DRINK SPECIAL OCCASION HEALTHY OFFERINGS CELEBRATION FRIENDLY SERVICE GOOD VALUE FOR MONEY CLEAN ENVIRONMENT BBQ restaurants have become more attractive destinations for dinner, while Hotpot and Japanese outlets enjoy increasing footfall during lunch

31% 48% 30.7 million TOTAL VISITS IN YEAR ENDING Q3 2018 40% 42%

BBQ and Japanese cuisine are more preferred for dinner, while 38% 50% Hotpot strikes a balance and is equally chosen for both meals. Lunch time Dinner time

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 • Party size - % visits

Party size by cuisine - % visits

100% Hotpot and

21% 19% BBQ 35% 80% restaurants

27% show amazing 60% 44% capability to

39% accommodate 40% consumers’ 55% needs across 20% 35% 27% different party

0% sizes BBQ Restaurants Hotpot Restaurants Japanese Restaurants

<=2 people 3-4 people 5+ people

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018 n=602 So, what are the key takeaways?

Vietnamese eat Vietnamese food, but they have ➢ To Operators currently in these winning also shown more appetite for BBQ and Asian- segment, stay focused, listen to your consumers centric cuisine such as Hotpot and Japanese and be ready to adapt as competition from new foods. and current players is definitely getting more fierce. Young female consumers are the growth engine of restaurants offering these cuisines. ➢ To all Operators that specialize in foreign cuisine, look into how you can adapt some of these restaurants’ success drivers, e.g. facilitative environment for special occasions, appeal to women, great service, exciting interaction between consumers and food, etc.

➢ To Drinks and Fresh food Manufacturers, focus your effort in winning BBQ, Hotpot and Japanese chains if you are looking for growth. Reach out to us

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