Vietnam loses out on global market without rice brand
Trung An Hi-tech Farming JSC in the Mekong Delta has been exporting rice under foreign brand names for many years though it is itself one of the biggest rice exporters in Vietnam.
|Vietnamese rice exporters often ship in 50-kilogramme bags under the labels of their foreign distributors
“But at the moment we still depend on buyers, which means they decide the packaging and labelling and we only have to follow instructions.
“Some markets allow the phrase ‘origin in Vietnam’ to be written on the package, and that is already quite generous.”
He said foreign buyers usually order in bulk and want 50kg packaged under their name.
“They do not have to introduce Vietnamese rice to consumers, they just want to promote their own brands.”
According to the Ministry of Agricultural and Rural Development (MARD), Vietnam exports to 150 markets yet global recognition of Vietnamese rice brands is still very low.
Last December, it unveiled the official Vietnam rice brand logo hoping to create a firm foothold in the global market.
Binh said it was an important move because it would help consumers identify Vietnamese rice since the logo is on the package.
But having a national brand does not mean it would automatically enhance the value of Vietnamese rice, he said.
“Whether or not we can increase the value depends on the quality of the product. Quality decides everything. Even the national rice brand can only be successful if companies and farmers collaborate to improve product quality.”
Nguyen Quoc Toan, Acting Director of MARD’s Department of Agricultural Market Processing and Development, had emphasised the importance of quality at the launch of the national brand logo.
“The main issue [when building a brand for Vietnamese rice] is product quality because no brand will be accepted when the quality is poor.
“First and foremost, we need to improve the quality of our rice grain to not only meet the requirements of traditional rice markets but also niche markets in future.”
He said enterprises and farmers must work together very closely to enhance the value of Vietnamese rice.
Dr Nguyen Duc Thanh, Director of the Institute of Economic and Policy Research, told Vietnam News that consumers are now more demanding than ever. “They want to buy clean and organic rice whose production is traceable.”
He said farmers have to meet those requirements but cannot do it by themselves.
They have to work with enterprises because the latter work directly with consumers and have the responsibility to ensure people can buy good quality products, he said. “Only by joining hands can farmers and enterprises tap foreign markets.”
He also pointed out that due to low productivity, farmers have to grow three rice crops a year instead of two as recommended by scientists for sustainability, which leads to low quality and almost no value addition.
If the non-agricultural sector grows further, farmers could abandon the third crop, he said.
“Production may decrease but quality will improve and bring more value.”
According to Dr Nguyen Van Sanh, former director of the Mekong Delta Development Research Institute, the delta, the country’s rice basket, has been hit by climate change in recent years, which has brought challenges such as changing water flows, low market competitiveness and overexploitation of agricultural resources.
Besides, production costs increase while quality deteriorates, he said. “To develop a sustainable rice industry, farmers, enterprises and administrators must be ‘smart’ in production and trading.”
It can be done by selecting appropriate rice varieties, making use of ecological advantages through regional and sub-regional integration, improving production techniques, and adopting effective mechanisms and policies, he added.
Dr Thanh noted that enterprises need to pay more attention to communication and advertising to build their brands in the domestic market first before expanding overseas.
He said though advertising is costly, without communication consumers cannot know and would continue to think that foreign rice is better than Vietnamese rice though it is not always the reality.
He said high-income families prefer to buy imported rice from Japan, Thailand or South Korea, and so building rice brands should not only be for international markets but also the domestic market.
“We can sell Vietnamese rice at supermarkets overseas but on a small scale. At the moment the biggest market for us is the domestic market.
“It has 100 million people who eat rice every day. Only a small number of highly selective consumers care about rice brands while the majority are indifferent.
“The domestic market is very sustainable for us as it is familiar and we have knowledge about the local market and consumers,” he said.