Delving into Saigon’s Food Scene

food - Saigon/HCMC: July 16, 2018

We all agree that Vietnam is a land of opportunity at the moment, and we see restaurants, bars and cafes opening and closing on a daily basis. One consistent player in the food and beverage service sector for more than 20 years is the Al Fresco’s Group.

Al Fresco’s operates seven brands and around 50 restaurants throughout Vietnam, with the origin and main field of operation in Hanoi, followed by Ho Chi Minh City and Danang. To get an impression of its turnover: Al Fresco’s customers consume about 16 tonnes of Mozzarella cheese per month.

We met Ben Winspear, Southern Area Manager of Al Fresco’s, at Jaspas on Dong Khoi to learn more about the challenges and opportunities in the food sector.

Al frescos pizza HCMC

Challenges

“In the past, the biggest challenge of Western restaurants was local produce. Almost everything we had to import. Today more and more can be sourced in Vietnam, from fresh chicken and clean seafood to cheese.”

The biggest challenge nowadays, apart from the usual obstacles like government regulations, hygiene and renting terms, is staff.

In Ho Chi Minh City, finding new staff is comparatively easy, but they need proper English skills and have to be trained to meet the requirements of the restaurant and become part of the team.

The ever-changing landscape of this city is open to more outside investment. New venues with big start-up budgets behind them scoop up trained staff like a sponge and pay high initial wages.

After a year, they reduce the wages and people leave again. Sometimes, they may even come back to the venue where they started out in the first place.

A challenge for foreign restaurant owners and managers is definitely the way different kinds of customers expect to be served. Western guests expect their drinks to be served first, but require less attention after the food is served. Vietnamese require around 80% more staff attention during the meal, but the dish order is less strict.

HCMC waitress

Chances

“At Al Fresco’s, we opened our first restaurant, catering exclusively to expats. When we started targeting the Vietnamese, we began to grow.”

The growing middle class in Vietnam is commonly seen as the biggest opportunity for new players on the market, but you need to adapt or die. Vietnam is totally different from other markets in terms of taste and mentality. What works in Thailand or France, may fail in Vietnam.

This adaptation process is also essential for success in the three different regions of the country

– North, Centre and South – while different districts of one and the same city may provide different customer demographics. Another big opportunity to win guests is the rising health consciousness of the aspiring middle income group. Women in particular tend to keep an eye on healthier variants of their favourite dishes.

“At Al Fresco’s we stand true to our core menu and concept that makes up about 80 percent of the menu. The other 20 percent we tweak to the location-specific demography.”

Market research is a crucial part of any successful business strategy. It is especially important in fast-paced markets like Ho Chi Minh City, where everything can change in the course of a day.

Beer in saigon

Changes

The opening of the country to foreign business and the resulting influx of international players is already changing the game significantly.

With the increasing prosperity of the country, wages as well as rents are constantly climbing. One of the major changes that can be expected is a significant reduction of staff, but a higher quality of service and increased wages, which brings the way of running a venue closer to the business style we see in the West.

“We live in very exciting times and I am curious about what the next 5 to 10 years will bring. We will continue to be open to change and fine-tuning our service.”