Foreign brands control domestic natural foods market
Vietnam, an agricultural country which has great advantages to produce natural foods, still has to import products of this kind for domestic consumption.
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An analyst commented that organic food, or ‘green’, ‘safe’ food, have become more and more favored by urbanites, especially because many dirty food cases have been discovered in recent years.
In Vietnamese thoughts, organic food means fresh vegetables and fruits. However, they have realized that industrial product drinks (milk, tea, coffee and cocoa), supplement food, cosmetics and many other kinds of products can also be ‘organic’.
In principle, higher demand will make the market more attractive.
However, according to Bui Thanh Giang, deputy director of Sua My JSC, which distributes dairy products imported from the US, noted that the US organic food manufacturers still don’t show interest in the Vietnamese market, though Vietnam, with 90 million people, is considered a ‘promising land’ for manufacturers.
Giang said it is not a simple job to distribute organic food in Vietnam. In general, distributors would take loss for two or three at least to cement their positions in the market. And no one can say for sure the business would bring profit after that period.
When asked about the profit, Giang said Sua My can have a modest profit of 7-10 percent for dairy products.
The businessman went on to say that though the demand for safe food is very high in Vietnam, investors need to think carefully before deciding to pour money into the business field.
“You should trade four products at least and you should prepare for a ‘marathon run’ You need long-term capital, because you won’t be able to make profit quickly,” he said.
Giang, like many other owners of organic food shops, only distributes imported products.
Nguyen Huu Chung, a member of Orana Vietnam, the big supplier of fruits used for making dairy products, drinks, cakes, ice creams and fruit juice, said it is not technically difficult to create organic food, especially when Vietnam is strong in agriculture and tropical fruits.
However, it is difficult for domestically made organic food to conquer consumers’ hearts. Since the cultivation of organic farm produce can only bring low yield, their selling prices are high and not accepted by the majority of consumers.
“The problem is not making organic food, but making it competitive in the market,” Chung said.
