Vietnam is reputed to be one of the largest coffee producers in the world with more than US$3 billion earned from the export of coffee bean each year.
Unfortunately, the country mainly sells coffee bean materials with low added value. To achieve a higher value for its coffee, Director of the Rural Development Centre Dao Duc Huan emphasise on the importance of building a brand name for Vietnamese coffee, by taking advantage of specialty coffee growing areas such as Buon Ma Thuot or Son La to establish brand names in connection to geographical indication (GI).
At the same time, the brand building work should go hand in hand with production of high-quality product, with strong connection from cultivation to processing to the market. Several ministries and local administrations have recently adopted policies and measures to establish brand names for specialty coffee through GI protection. At present, Vietnam had 2 coffee products with GI namely Buon Ma Thuot and Son La coffee.
The Ministry of Agriculture and Rural Development has also approved a framework national project on developing high-quality coffee. The project aims to develop a coffee industry from farming to processing. It will encourage the use of new coffee varieties and advanced farming and post-harvest techniques, mechanisation and reorganisation of production for higher productivity, better product quality, and climate change resilience.
Huan noted that brand building work is facing many difficulties due to small scale and limited capacity of the local coffee industry.
Apart from coffee, another Vietnamese product with similar problem is tea. Vietnam is the 5th largest exporter for tea in the world, however this commodity has an uncertain future as it still finds difficulty in accessing difficult markets like the US and Europe.
Based on statistics from the Department of Agricultural Product Processing and Market Development (MARD), for the first 7 months of 2018, tea exports reached 67,000 tonnes worth US$109 million, a decrease of 12.9% in volume and 9.3% in value over the same period last year. Vietnam major export markets for tea include Pakistan (32.8%), Taiwan (13.8%), Russia (12.1%) and China (7.9%).
Although Vietnam is in the Top 5 position globally for tea exports, Vietnamese tea has never asserted its position in line with its potential. Vietnamese tea, just like coffee, is mainly exported in raw form with low value added. In addition, most of its tea exports are mainly to easy access markets instead of penetrating into tough markets such as the EU, the US and Japan.
Director of the Department of Processing and Market Development, Nguyen Quoc Toan said that due to the lack of brand names as a result of low-quality products, Vietnamese tea lacks competitiveness in the international market.
Nguyen Thi Anh Hong, Vice President of the Vietnam Tea Association said that despite this setback, Vietnamese tea producers are still well-known to international customers with the ability to supply large volumes of medium quality products. To penetrate the more lucrative markets, it is important to upgrade the quality and safety standards for tea in line with these countries’ requirements.
This process of branding should be noted for both raw and processed tea. For example, for exporters of raw materials, enterprises should focus on building brand names. Tea exporters need to ensure the image of professional partners in the international market.
With packaged tea products, exporting finished products with the Vietnamese brand to the international consumers is still a distant dream. Vietnam still needs to tackle key issues like limited investments, and proper management with regards to fertiliser residues and pesticides in tea production. Final consideration will be to enhance its current production technology so as to be able to offer quality products with attractive packaging for the international markets.
There are more than 500 tea factories operational in the country with a combined production of more than 500,000 tonnes of dried tea leaves annually. Despite the high production, the export value of Vietnamese tea products is half the average global price.
Nevertheless, there is a ray of hope for this industry. Recently, Vietnamese tea products had won awards at the first International Gourmet Tea Competition “Teas of the World” in Paris. These include Rizote tea of the northern province of Thai Nguyen (silver award) and the Carosa of Tay Con Linh Cooperative in the northern province of Ha Giang (bronze award). The northern province has been touted as a cradle of Vietnamese tea with its products gaining popularity in Europe.