Highly attractive: Foreign investment in the food and beverage segment is rising

International retail investors have flocked to Myanmar’s food and beverage (F&B) segment in recent years, drawn by a rising middle class with disposable incomes for F&B purchases, though not yet more expensive internationally branded fashion and consumer goods. Recognising the growth potential, a host of US fast-food chains have moved to enter the market or expand their offerings in recent months, joining a handful of Asian franchises already in operation. Although supply chain difficulties have driven up production costs, the long-term growth potential of the F&B segment is considerable, while rising foreign direct investment (FDI) in the grocery segment indicates further opportunities outside of fast food.

New Entrants

Although international fast-food chains are not yet ubiquitous in Myanmar, a host of Asian F&B outlets have popped up in recent years, most notably fried chicken restaurants. Thailand’s Charoen Pokphand Group operates a network of mini street-side chicken stalls, while South Korea’s Lotteria burger chain launched its first location in 2013, expanding its portfolio to more than 20 by mid-2016. Malaysia’s Marrybrown and South Korea’s BBQ Chicken also entered the market in 2013; the former operates in both Yangon and Mandalay.

The lifting of US sanctions has had a major impact on investor sentiment. The US government has also eased restrictions on trade shipments to ports and airports in the country, which has enabled new investment in the F&B segment.

Five well-known US fast food chains are now operating in the country – KFC, Burger King, Pizza Hut, Swensen’s and Pizza Company. KFC entered the market in July 2015, when its inaugural restaurant opened in downtown Yangon. The franchise, operated by local conglomerate Yoma Strategic Holdings, has since expanded its portfolio to five locations in the business capital, including one at the Yangon International Airport (YIA), which launched in April 2016.

Recent Expansion

Pizza Hut is operated by YUM! Brands, Hong Kong’s Jardine CM Restaurant Group Company, a subsidiary of Jardine Matheson, and Myanmar’s City Mart Holding Company. The group’s first franchise opened for business in Yangon’s Bahan Township in October 2015. The group now plans to expand to 20 locations by 2021. Burger King also opened in YIA’s Terminal 1 in July 2016. Like Pizza Hut, Burger King is owned by YUM! Brands, although its Myanmar operations are led by Thailand’s Minor Food Group, a company with a fast-expanding portfolio of F&B outlets in Yangon. Minor Food Group operates the US-based Swensen’s ice cream franchise, which also opened a new location in YIA in July, as well as at the new Myanmar Plaza shopping centre. The company launched its first Swensen’s in Myanmar in 2013.

Investment in supermarkets is also expected to soar as new brands clamour to capture rising consumer demand. In August 2016, for example, Japan’s retail giant Aeon announced plans to expand its supermarket business into Myanmar through a joint venture company created in partnership with local firm Creation Myanmar Group of Companies (CMGC). The new company, Aeon Orange, plans to acquire 14 supermarkets currently owned by CMGC affiliate Hypermarket Asia, in addition to opening an unspecified number of new stores before 2017.


Retail investors have encountered challenges as they launch operations. KFC Myanmar, for example, reports that supply chain difficulties have posed a problem. The restaurant sources its chicken locally, but outdated infrastructure networks and an undeveloped cold supply chain have driven up operating costs. Limited consumer purchasing power also remains an issue, meaning that fashion and retail brands may struggle to gain a foothold in the market, with F&B purchases standing as the preferred choice for lower-middle-class consumers, making the segment the most attractive to foreign investors.