Introducing Vietnamese agricultural products into the international distribution system

Vietnam is an important supplier of various agricultural products to the global market

Thanks to its favorable geographical location, natural conditions, and benefits from free trade agreements, Vietnam's export turnover of agricultural, seafood, and food products has maintained a high growth rate throughout recent years.

Multiple Vietnamese agricultural products such as fresh bananas, sweet potatoes, bird's nests, pomelos, lychees, cucumbers, and durians were granted export licenses to developed markets with high standards such as the United States, Japan, China, and New Zealand in 2022. This development has resulted in significant opportunities for fruit exports.

Ms. Nguyen Thao Hien, Deputy Head of the European-American Market Division at the Ministry of Industry and Trade, predicts that despite the challenging market conditions in 2023, including high inflation rates in major export markets, Vietnam's export turnover of agricultural products can surpass the 50 billion USD mark.

Fruits and vegetables are the highlights of Vietnam's export of agricultural products. It is anticipated that fruit and vegetable export turnover will reach a historic milestone of 5 billion USD in 2023.

Vietnam currently exports agricultural products to over 200 out of 224 countries and territories with whom it has established trade relations. Products such as rice, coffee, black pepper, and cashew nuts have a significant market share with some taking the first place globally. Vietnam is one of the top three global suppliers of coffee, the largest supplier of cashew nuts, and black pepper, and the third-largest exporter of rice.

However, Ms. Hien notes that the export of agricultural, seafood, and processed food products faces numerous internal and external challenges. Introducing Vietnamese agricultural products into the international distribution system is a considerable challenge for exporting businesses due to the frequent updates of regulations and laws in major importing markets to protect the environment and place emphasis on social responsibility.

Vietnam has evolved into a pivotal supplier of numerous agricultural export products on the global stage, progressively fortifying its steadfast standing in the international market.

Vietnamese agricultural products are present in over 190 countries and territories

From a managerial perspective, Mr. Le Thanh Hoa, Deputy Director of the Department of Quality, Processing, and Market Development and Director of Vietnam SPS, believes that with Vietnam's accession to the WTO, the country has finalized all legal frameworks and regulations related to Sanitary and Phytosanitary inspection, which are crucial areas for international agricultural and food trade.

"The completion of these frameworks has significantly enhanced our competitiveness and expanded the market for Vietnamese agricultural products", Mr. Hoa assessed. He further noted that the government has issued various decrees to guide and encourage investments in agricultural production, processing, and the establishment of supply chains from production to export. Consequently, the supply chains will increase the competitiveness of Vietnamese products' prices.

There are currently 2,510 safe agricultural and aquatic supply chains that supply supermarkets and food chains nationwide. "This serves as a channel to distribute products and demonstrate to buyers that our production process is closely monitored to ensure food safety", Mr. Hoa remarked, adding that Vietnam's processing capacity exceeds its capacity to supply raw materials.

"Following COVID-19, free trade agreements have incorporated provisions on green growth, environmental protection, ecosystem preservation, social welfare, and labor. If we fail to improve, Vietnamese products will face stiff competition in the global market, especially in the EU and the United States", Mr. Hoa emphasized.

According to Mr. Hoa, the Ministry of Agriculture and Rural Development will continue to refine policies and legal frameworks to meet the demands of the global integration process. Accordingly, resources will be allocated to prioritize the supervisory management of food safety from production and harvesting to preservation and processing. Additionally, the Ministry will focus on connecting domestic and international consumption. Updates will be made to regulations, market analysis information, and consumer preferences to develop products that meet food safety standards.

On the other hand, the Ministry of Agriculture and Rural Development is establishing raw material areas to support production and export in addition to improving the logistics infrastructure within the agricultural supply chain to ensure food safety. Moreover, the Ministry is actively reducing post-harvest losses and enhancing the quality of agricultural products.

Furthermore, there is a need for innovation in public awareness campaigns, training, and support for businesses in terms of quality control, food safety, technology adoption, digital transformation, and digital channels for market connections and consumer engagement. The Ministry is negotiating to gain access to additional markets and products in the fruit and vegetable sector, which will markedly benefit export businesses. Innovations in promotional communications and strategic emphasis on trade promotion activities will be the Ministry's long-term goals.

As of 2022, there are over 21,500 processing facilities nationwide, including 7,500 businesses and 14,000 business households.

Vietnam's agricultural products have been present in over 190 countries and territories, with export turnover reaching over 53 billion USD in 2022.

Every product carries a story

The Central Retail Group has collaborated with the Ministry of Industry and Trade to organize multiple "Vietnamese Goods Week in Thailand" over the years. These events has helped businesses promote their brands and increase sales opportunities in the Thai distribution channels. Mr. Paul Le, Vice President of Central Retail Group Vietnam, believes that the introduction of Vietnamese agricultural products into the international distribution systems will require businesses to fully understand market needs and information. Furthermore, businesses must be able to tell the story of their products instead of showcasing ordinary products when participating in trade promotion programs and export connections.

According to Mr. Le Thanh Trung, Commercial Manager for the Fresh Food Value Chain at Central Retail Vietnam, a seafood company from Ca Mau province attracted customer interest by taking a proactive approach to the market during the 2022 Vietnamese Goods Week in Thailand.

"This business introduced two products at the fair: shrimp crackers and dried shrimp from Ca Mau province. After setting up their booth, the company actively visited traditional markets and supermarkets in Thailand to learn about similar products. When participating in B2B sessions, they shared the story of Ca Mau's wild shrimp products, highlighting the artisanal production and livelihoods it creates for local farmers", Mr. Trung recalled. He emphasized that in addition to document preparation, businesses need to improve their soft skills in order to reach the target market.