Running a Restaurant Business in Vietnam

We met the area manager of an old and successful F&B group in Vietnam and talked about running a restaurant business in this country.

Grilled SalmonGrilled Salmon | photo: Frank Fox (cc-by-sa)

Reclaimed article from the commissioning publisher due to systematic infringement of intellectual property rights. More at the end of the article.

We all agree that Vietnam is the land of opportunity in our time and we see restaurants, bars and cafes opening and closing on a daily basis. One familiar face that has been a consistent player on the market for more than 20 years is the Al Fresco’s Group.

The Al Fresco’s Group operates seven brands and around fifty restaurants throughout Vietnam with their origin and main focus of operation in Hanoi, followed by Ho Chi Minh City and Da Nang.

To get an impression of their turnover – their customers consume about 16t of Mozzarella cheese per month.

We met Ben Winspear, southern area manager of Al Fresco’s at Jaspas on Dong Khoi street to learn more about the challenges and opportunities in the business from somebody who knows their trade.

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 a part of the team.

The ever changing landscape of this city is open to more investment from outside. New venues with a big start-up budget 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.

In Hanoi it is different. Initially harder to find good staff, the people are less prone to jumping off the train and more loyal to their workplace. But not only the high staff turnover is a part of the more dynamic business landscape of Ho Chi Minh City, also the customers tend to be more loyal up North, while here they are more adventurous.

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.

Chances

“At Al Fresco’s we opened our first restaurant back then, 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 chance 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 adaption process is not only important nationwide, it is also essential for success in the three different regions of the country – North, Centre and South – and finally different districts of one and the same city may provide different demographics of customers.

One of the big opportunities to win guests is the rising health consciousness of the aspiring middle income group. Especially women 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% of the menu. The other 20% we tweak to the location specific demography.”

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

Adopting these tools is essential to stay afloat and grow in Vietnam’s age of opportunity.

Conclusion

With the increasing prosperity of the country itself, wages as well as rent is climbing constantly to new heights. One of the major changes that can be expected in the future will be a significant reduction of staff, but higher service quality as well as wages, which brings the way of running a venue closer to the West.

The opening of the country and the resulting influx of professional players on the market is already changing the game significantly.

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

About this Article

Since the commissioning publisher removed all authorship credits that were initially agreed upon from our past and present articles on their websites, crediting it to themselves instead of the original writer, we consider this as a breach of our service agreement concerning intellectual property and will therefore reclaim our content here and now.

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