Blogs

23. McDonald’s in Viet Nam

Byadmin

Sep 9, 2016

WN Update

Big Food Watch. McDonald’s
Ronald McDonald hits Ho Chi Minh City

BIG FOOD WATCH

Access August 2012 Association new story on McDonald’s and the Olympics here

Girls lined up against the Golden Arches sign in Ho Chi Minh City, providing a photo opportunity at the opening of McDonald’s first ever outlet in Vietnam. On the first day business was very brisk

Claudio Schuftan reports from Ho Chi Minh City:

On 8 February McDonald’s opened its first burger joint in Vietnam, in my home town, Ho Chi Minh City. I have to say that I felt that this was very depressing. Photographer Neil Massey was there all day and his pictures are shown here. He says: ‘The festivities included blaring techno, live bands, and thousands of customers waiting up to two hours in 90-degree heat’.

He explains further: ‘For most Vietnamese youngsters the chance to work at an international company like McDonald’s is a big deal. For the customers it’s the aspirational experience that brings them through the doors. The average wage in Vietnam is about $US 150 a month and the cost of a Big Mac is $US 2.82 and a Value Meal is $US 3.99. So for an average worker, two Value Meals cost half a week’s wages. For many Vietnamese, it’s a special treat to bring the family to a place like this. Last year, Vietnam relaxed its investment restrictions and since then it has seen big brands like Burger King and Starbucks come into Vietnam. Starbucks was a big deal on its opening weekend, but nothing compared to this’.

Mother and child at the opening of the first McDonald’s outlet in Vietnam, Ho Chi Minh City
The balloons and music were free on this first day as middle-class customers got a taste of the USA

A colleague tells me that a study just published in the British Medical Journal has found that ‘Exposure to takeaway food outlets in home, work, and commuting environments combined?? was associated with marginally higher consumption of takeaway food, greater body mass index, and greater odds of obesity’. Good gracious! With transnational corporations poised for ‘double- digit’ 10 per cent + annual sales increases, obesity and diabetes rates are projected to rise fast, which will be good business for pharmacies and hospitals. Here follows an extract from a report in USA Today of the Ho Chi Minh City opening:

The businessman who brought McDonald’s to Vietnam, developmental licensee Henry Nguyen, born in Vietnam but grew up in the US, is married to the daughter of prime minister Nguyen Tan Dung. He said that one reason it took McDonald’s so long to come to Vietnam is that ‘McDonald’s is a very careful organization. If you show up in a market you’ve got to do things right. The food standards have got to be there, so supply chain was definitely an issue’. McDonald’s plans a target of 100 restaurants in 10 years. The biggest challenges will be training the workforce and creating a supply chain that will meet international standards. We’re going to change the food industry here.’

For now most Vietnamese customers still eat out in small local shops such as Pho Loc, which sells Vietnam’s popular pho noodle soup only a few hundred feet down the street from the new McDonald’s. Tran Ngoc Anh, 63, has been running the restaurant for 30 years and said she isn’t worried that the new giant down the street will draw away her customers. ‘It’s just fast food’ she said. ‘It doesn’t have all the delicious flavors of pho’.

Ronald McDonald and a local companion celebrate[s] the opening of the 10,000th Big Mac joint in Asia, in Ho Chi Minh City. Density of fast food outlets is a reliable predictor of rates of obesity

Box 1

McDonald’s in Asia

Summarised from the USA Today report
For Oak Brook, Illinois -based McDonald’s, Vietnam is one of its largest remaining untapped markets, a country with 90 million people and a growing middle class that is able to afford fast food, which is typically more expensive than local street food. At McDonald’s, a Big Mac costs 60,000 Vietnamese Dong ($US 2.82), while a value meal with fries and a drink goes for 85,000 Vietnamese Dong ($US 3.99).

According to Euromonitor International, Vietnam’s fast-food industry is growing rapidly. Total revenues were $535 million in 2013, a growth of 14.5 per cent over 2012. The first foreign fast-food chain to enter Vietnam was KFC in 1997, after the US ‘normalised’ trade relations. KFC remains the largest brand in Vietnam, with 135 locations.

In recent years the market has grown more crowded as several U.S.-based fast-food chains have made the leap into Vietnam. Burger King arrived in 2011, and has expanded quickly, with almost 20 restaurants in Ho Chi Minh City, Hanoi and Danang. Other recent entrants include Baskin-Robbins, Dairy Queen, Carl’s Jr., Popeyes Louisiana Kitchen and Subway. Starbucks opened its first store in 2013, and now has three locations in Ho Chi Minh City.

Vietnam is the 38th country that McDonald’s has entered in Asia, and the Ho Chi Minh City restaurant is the region’s 10,000th McDonald’s location. The company has more than 35,000 restaurants worldwide.