09:18 | 26/12/2017 Industry
(VEN) - Food manufacturers in Vietnam should keep abreast of new consumption trends and prove the market with safe, chemical-free high quality products and attractive designs in order to grow on a sustainable basis.
Room for growth
As a pillar of the Vietnamese industrial sector, the processing industry is growing rapidly. Bui Truong Thang, Deputy Director of the Ministry of Industry and Trade’s Department of Industry, said at a recent Ho Chi Minh City seminar on promoting investment in the food processing industry that the industry has reached an average index of industrial production (IIP) of 106.9 percent and an average consumption index of 109.7 percent in 2012-2016. Food consumption in Vietnam accounted for an estimated 15 percent of the country’s gross domestic product (GDP).
However, there is much more room for the food processing industry’s development. Deputy Minister of Industry and Trade, Do Thang Hai, said Business Monitor International has forecast that the food and beverage industry would maintain an annual growth rate of 10.9 percent from 2017-2019. The dairy industry alone is expected to grow 10 percent and the alcohol-based drinks sector is expected to grow 11.1 percent per year during the same period.
The Vietnamese food processing industry has huge potential to attract foreign direct investment (FDI). The deputy minister said investors would have the opportunity to exploit the 90-million-plus domestic market and develop production and export of food products made of Vietnam’s plentiful sources of agricultural, forest and seafood materials. Starbucks is using Arabica coffee grown in the Central Highlands Lam Dong Province’s Da Lat City at more than 21,500 stores in 56 countries and territories worldwide, while only three percent of coffee worldwide meets Starbucks standards. This shows that Vietnamese food materials could meet the quality requirements of the world’s most prestigious companies, Hai said.
Quality and price
Most domestic food processing enterprises are small to medium in size, with low capability in terms of research and development. They still lag behind their foreign counterparts in terms of product renovation and diversification, and therefore haven’t satisfied modern consumption trends.
Nguyen Huong Quynh, General Director of Nielsen Vietnam, said enterprises need to keep up with modern consumption trends and consumer demand for quality and prestige products, with health of great concern, and should focus on connectivity and e-commerce.
Jocelyn Tran, Regional Senior Director for Walmart Global Sourcing in Southeast Asia, said Walmart purchases processed food products from suppliers all over the world. When choosing a supplier, Walmart seeks value rather than cheap prices, Tran said.
Consumers are willing to pay more for higher value, safer products. Food processors need to acknowledge this to adjust production if they are to grow on a sustainable basis.
Nguyen Phuong & Thuy Duong