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Young Vietnamese Consumers Embrace Convenience of Packaged Foods

With the food market showing sign of healthy growth, packaged foods proved the star turn at this year's Vietnamese International Food Show, while there was increased interest from overseas businesses looking to enter the market.

Photo: Do Thang Hai, Deputy Minister of Industry & Commerce, opens the show.
Do Thang Hai, Deputy Minister of Industry & Commerce, opens the show.
Photo: Do Thang Hai, Deputy Minister of Industry & Commerce, opens the show.
Do Thang Hai, Deputy Minister of Industry & Commerce, opens the show.

The Vietnam International Food Expo is now well-established as a key event for the country's agriculture, fisheries and produce industries, all of which play a major role in the nation's economy. This year, the exhibition featured 500 stands displaying a diverse range of products from more than 300 leading national and international companies. Among the more high-profile exhibits were food and beverage processing and packing technology, as well as agriculture and fishery equipment.

In his keynote speech at the event's opening ceremony, Do Thang Hai, Deputy Minister of the Industry and Commerce Department, said: "Alongside the exhibition activities, there is now a well-organised programme of conferences and business matching programmes. The exhibition has attracted many visitors from different provinces, as well as several overseas territories, including South Korea, Kuwait, Japan, and Singapore."

The event has come to be seen as an effective forum for forging international business connections, largely thanks to its co-operative ties to many leading national and overseas trade development organisations. The involvement of these bodies – notably KOTRA (Korea), JETRO (Japan) and CBI (Holland) – was seen as essential for enabling the Vietnamese business community to reach international importers, wholesalers and retailers.

This year, South Korea was selected as the 'country of honour' at the Expo. According to the General Department of Customs, this was recognition of the fact that Vietnam exported US$7.11 billion worth of products to the Korean market in 2014, a 7.7% increase in turnover compared to 2013. In addition, South Korea was ranked third in value terms among Vietnam's 200 trading partners in 2014, as well as being its second largest partner in Asia.

Korea is a major import market for many Asia-Pacific businesses, as well as for many global agricultural and food processing industries. Korean consumers are notoriously partial to rice, coffee and seafood, all of which are exported in bulk from Vietnam. In recent years, a number of Korean companies have come to Vietnam in search of new investment opportunities, something that has proved a boon for the domestic food industry.

One likely beneficiary of this is The Cup Food Company, a large Korean food concern with ties to Indonesia. Explaining the company's interests in the local market, Team Leader Anna Kim said: "We have just started to explore the Vietnamese market for the first time at this fair. We are really impressed by the development of the country.

"At this exhibition, I've seen many leading Korean brands, as well as a few popular names from Japan, Taiwan and Belgium, which gives me confidence about the potential for expanding our business here. After two days at the fair, a few companies have already contacted us about our products and expressed an interest in business contracts."

Photo: Ugent Cacaolab: “Exciting challenge”.
Ugent Cacaolab: "Exciting challenge".
Photo: Ugent Cacaolab: “Exciting challenge”.
Ugent Cacaolab: "Exciting challenge".
Photo: The Cup Food Company: “Confident of potential”.
The Cup Food Company: "Confident of potential".
Photo: The Cup Food Company: “Confident of potential”.
The Cup Food Company: "Confident of potential".

Similarly enamoured of local business prospects was Claudia Delbaere, Head of Research for Ugent Cacaolab, a Belgium-based chocolate and fillings production facility. She said: "We are committed to entering the Vietnamese market. Currently, we are yet to find a suitable business strategy, so we are here to raise awareness among the local market. We are also looking for distributors.

"Cacaolab is a well-known brand in Europe, so we are very concerned about our image and product quality. We have noticed that the Vietnamese are not familiar with a strong cacao flavour, something we call dark chocolate and that has a cacao content of 70% or more. Here, they tend to like milk chocolate. Converting customers will be a difficult but exciting challenge for us."

Also looking to cater to local tastes was Nguyen Minh Man, a tea and coffee retailer visiting the event. He said: "I've come to this exhibition to look for high quality tea and coffee manufacturers. Tea and coffee are popular with everyone nowadays. To the Vietnamese, it has become very much part of the culture.

"In order to build up a good image for our company in this competitive market, we need to ensure the quality of our product here and find the best partner to co-operate with. I have to sample their goods and review the whole packaging process."

Indeed, a key trend in the food industry is the increasing importance and sophistication of packaged goods, something that has been notably driven by consumer preferences. In line with this, Kim of The Cup Food Company said: "The food industry now has a real focus on packaged products, largely because of the convenience they offer and their guarantee of good quality."

Instead of importing print or packaging from abroad, many national and international companies are increasingly turning to packaging out-sourcing services in Vietnam. As a result, the local packaging industry has been growing steadily. According to industry statistics, some 80% of the bottles supplied for the drinks sector in 2014 were produced in Vietnam.

Assessing the growth of the sector, Tran Quoc Van, a Sales Representative for V.N. Industrial Tech, one of the leading metal distribution companies in Vietnam, said: "Packaging machines and metal detectors are the best selling items for our company. We are currently working with a lot of manufacturers in the food and fishing sector."

As well as trade visitors, the exhibition also attracted a number of Vietnamese consumers in search of new food ideas. One local resident visiting the exhibition, Tran Ngoc Minh Trang, said: "I have three kids, including twins. Taking care of lunches for the kids at school and my husband at work, then dinner at the end of the day is a hard job for me. Sometimes I don't know what to cook or how to make the meals more interesting.

"Occasionally, I buy packaged food and add some more ingredients, such as vegetables, meat or spices to make it more palatable for the kids. The reason I came here today was to buy this type of product, and I have bought a lot. It's a great concept."

Echoing her sentiments, Le Minh Thuy, an office worker at a company close to the show site, said: "Packaged foods are really convenient for people like me who don't have much free time. Like many young people, I have to spend a great deal of my time in the office.

"I normally keep some packaged food at work so that I can have a quick lunch or snack during my breaks. My co-workers, many of whom are newly married or single, do the same."

According to figures from the Industry and Commerce Department, food consumption in Vietnam will increase by 5.1% this year, reaching US$29.5 billion in 2016 in value terms. The average food consumption per person will reach VND5.8 million (US$316) per year over the same period.

Photo: Domestic and international brands support the expo.
Domestic and international brands support the expo.
Photo: Domestic and international brands support the expo.
Domestic and international brands support the expo.
Photo: Attendees keen to try novel foodstuffs.
Attendees keen to try novel foodstuffs.
Photo: Attendees keen to try novel foodstuffs.
Attendees keen to try novel foodstuffs.

The Vietnam Food Expo 2015 was held from 13-15 May at the Saigon Exhibition & Conference Center (SECC), Ho Chi Minh City. It attracted around 30,000 visitors, including international business groups from Korea, Thailand, and China.

Pham Tuong Vi, Special Correspondent, Ho Chi Minh City

Content provided by Picture: HKTDC Research
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