What are the effects of supermarketization on consumers in urban areas in Vietnam: who benefits, who is excluded, and what are the consequences? The publication by Sigrid Wertheim-Heck, Sietze Vellema and Gert Spaargaren covers these queries. The paper is a contribution to the development of more inclusive retail modernization policies.
Access to safe and healthy food is a crucial element of food security. In Vietnam the safety of daily vegetables is of great concern to both consumers and policymakers. To mitigate food safety risks, the Vietnamese government enforces rules and regulations and relies strongly on a single approach for organizing food provision; being modernizing retail by replacing wet markets with supermarkets. In general, reorganizing food provision in this way is increasingly considered to be a guarantee for food safety, especially in urban settings with growing populations. To assess the effectiveness of this induced retail modernization of the fresh vegetables market in Vietnam’s capital Hanoi, the paper examines for whom and under which conditions does this approach deliver the desired outcomes.
The survey data and interviews show that ongoing retail modernization in Hanoi reaches only a minor segment of the population and drives a large group of shoppers into informal vending structures.
On the basis of five case studies, this paper demonstrates how similar supermarket interventions can yield contrasting outcomes when they do not accommodate for differences in shopper population and do not adapt to variations in the urban conditions.
To reduce exposure to unsafe food, particularly for poorer segments of the population, the research concluded that developing a flexible portfolio of retail modernization pathways and adopting a reflexive policy approach provide better impact and leverage, as opposed to the current trend of promoting supermarkets as a single, ideal-type form of food shopping.
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The Food, Agri and Aqua Business Sector Committee (FAASC) of the European Chamber of Commerce in Vietnam (EuroCham) organised a dialogue (27th of May 2015) between Government representatives and companies regarding the importance of traceability and legal enforcement for the control of food safety.
Food safety is still an issue in Vietnam and this limits Vietnam in exporting food, agriculture and aquaculture products. Too frequent products are blocked at the border of the importing country due to existence of high levels of certain heavy metals, bacteria, virus, moulds or other prohibited substances in products. This costs money and damages the reputation of Vietnamese products.
Currently various free trade agreements, such as the EU-VN Free Trade Agreement and the Trans-Pacific Partnership (TPP) are being negotiated. For 2015 the export goal for agricultural products is set at 32 billion USD. To reach this goal, it is important that food safety issues will be addressed.
The legal framework exists and the Government takes measures to improve food safety, however it is not enough. There are various ways to achieve the goal of safe food. Traceability and legal enforcement are two of such ways that can support the improvement of food safety.
Traceability is important in case of a food safety issue. Companies need to track down the origin of their ingredients, so in the worst-case scenario a product can be recalled. Also, consumers are concerned about food safety and would like to know the source of their purchased products.
Legal enforcement is equally important. Existing regulations should be enforced in an efficient and effective way. Currently, violating the rules is in some cases profitable. Fines are (too) low and the risk of being caught is not very high. Various food issues can be avoided by simply enforcing existing regulations.
Actions to improve
Companies should improve the food safety situation by introducing and using a traceability system.
The Government should check these traceability systems and should enforce existing regulations. Both foreign as local companies should be treated in the same way as the applicable law requires.
The dialogue has brought together representatives of various departments and agencies of the Vietnamese Government representatives of several embassies, international organisations and relevant industry and professional Vietnamese associations. Several keynote speakers were invited to present about product traceability legal enforcement:
Product traceability
Jean Jacques Bouflet, Minister Counsellor and Head of the Economics and Trade section of the EU delegation in Vietnam, highlighted the importance of traceability as the cornerstone of reliable and sustainable trade exchanges between counties and referred to a cooperation program between the EU and Vietnam to share the European traceability experience through TRACES (= TRAde Control and Expert System). This is a trans-European network for veterinary health which notifies, certifies and monitors imports, exports and trade of animals and animal products.
Nguyen Hung Long, deputy director of the Vietnam Food Administration, presented the current status of traceability in Vietnam.
Peter Robson, CEO of DSM Vietnam, and Siebe van Wijk, managing director of Fresh Studio, presented the implementation of their companies in relation to traceability.
Fresh Studio’s managing director, Siebe van Wijk stated:
“Traceability systems are an important tool in controlling food safety, because farmers will realize that a company can, in case food safety violations occur, always trace from which farm a product is originating. But this is just one of the elements which are needed to make Vietnam more successful in exports of agricultural products. This is a task which the private sector can control and implement itself, but one of the larger bottlenecks for successful exports is completely in the hands of the Vietnamese government: market access of Vietnamese products to neighbouring countries. Van Wijk gave the example of the trade balance for fruit between Thailand and Vietnam. While the Thai exports of fruits to Vietnam has a value of US$ 178 mln per year, Vietnam is only exporting about US$ 10 mln. This negative trade balance is caused by the fact that Vietnam is only allowed by Thailand to export dragon fruit, and for vegetables, only sweet potato. This is a very unbalanced situation, as Thai mandarins, rambutans, mangosteens and many other fruits flood the Vietnamese market. Vietnam could export a lot more fruits to Thailand, or other ASEAN countries, but unfortunately little market access has been arranged.”
Vo Ngan Giang of the Food and Agriculture Organisation (FAO), presented results on a pilot traceability project for poultry in Ho Chi Minh City.
Legal enforcement
Nguyen Xuan Duong, Deputy Director General of Animal Husbandry Department, MARD, presented the current performance in relation with checking animal feed additives.
Kao Sieu Luc, president of ABC bakery, and Eric Schubert of Lesaffre informed the attendees the motivation to ban products as potassium bromate by companies.
After the presentations a lively and interesting discussion took place between representatives of the industry, government officials of the relevant ministries as well as representatives of international organisations.
The initiative ‘Women as Inclusive Business partners’ from BoP Innovation Center and ICCO Cooperation supports the private sector in strategy development to better engage women in their value chains in low-income markets, ranging from producers to consumers.
15 good practices have been analyzed of Dutch and international companies, ranging from SME’s or cooperatives to multinational corporations. The practices illustrate ‘the secrets’ to build a successful business case; which benefits both companies and women. Fresh Studio actively took part in developing one of these successful business cases:
The Fruit Republic case
The Fruit Republic (TFR) is a Dutch owned company in Vietnam supplying international quality fruits and vegetables to both international and domestic customers. To expand its vegetable sourcing to North Vietnam The Fruit Republic involved in a vegetable value chain to facilitate access for small-scale vegetable farmers to urban markets in Hanoi.
These smallholder vegetable farmers in North Vietnam were not yet connected to formal retail chains in urban areas. The absence of proper planning, coordination, collection and storage and distribution systems for fresh vegetables were considered to be major bottlenecks to connect these vegetable smallholders to such higher value urban markets.
The vegetable value chain in which The Fruit Republic was involved was built on the extensive local experience of the Vietnamese company Fresh Studio. During the last 5 years they have developed successful strategies to improve the performance of Vietnamese fresh food producers in Vietnam and other Asian countries.
Results for women
1.000 small-scale farm-households in four areas across Vietnam are offered sustainable livelihoods. Especially in the North, most producers are women. In the South, both men and women work on the farms.
The producers have stable supplier contracts and receive ongoing agricultural extension to improve their horticultural quality.
In the packing houses and fresh cut facility employs 106 women.
Results for business
Women take their work more seriously, have an eye for detail and work with precision.
Product groups with female leaders are the most entrepreneurial and successful.
A food safety crisis in Vietnam has opened the door to smallholder vegetable producers in the north-western highlands to pioneer an agribusiness model that is now supplying Hanoi with certified safe produce.
New vegetable supply chains developed in an ACIAR agribusiness project have linked Vietnamese farmers in poor highland villages in Moc Chau district with the modern retailers that are changing the way people shop in Hanoi. The public private partnership (PPP) involved the Northern Mountainous Agriculture and Forestry Science Institute, the Research Institute of Fruits and Vegetables, Hanoi University of Agriculture, the French Agricultural Research Centre for International Development (CIRAD) and Fresh Studio.
The first potato production season within the Dutch funded project “Growing out of poverty with potato” has been completed. During this first seasons potato trials, potato field days, farmer trainings and market research activities have been implemented. The key first outcomes are shared below.
Potato trials
In order to have higher yields and to produce higher quality potato varieties farmers need to have access to good quality potato seeds. The first step to enable this is the registration of potato varieties in Vietnam before commercial trade of these varieties is allowed in Vietnam. In cooperation with Vietnamese institutes potato trials in North-Vietnam and the Central Highlands are established to test and evaluate five new potato varieties and in order to acquire the registration of these varieties.
The trial results of this year trial are positive: all new varieties have higher yield and better quality in comparison with the standard potato varieties included in the trials. The registration of the five new potato varieties is expected to be completed in 2016.
Potato field days
To share the trial results with authorities (MARD), potato traders and farmers several potato field days are organised. The feedback of the participant during the field days was positive; the new potato varieties are appreciated due to its high yield and quality. Farmers perceived that the new varieties taste and smell better than the standard variety. Consumer tests will identify whether consumers have the same feedback as farmers regarding the new potato varieties. Farmers and potato traders expressed their interest to test the new potato varieties and to cooperate with project to develop potato production in Vietnam.
Farmer training and extension
Vietnamese training materials have been developed to train Vietnamese farmers in potato production. The training consists of 3 modules which covers the aggregate from seed potato variety selection o to storage of the harvested potatoes. Over 350 farmers (69% female) are trained during the potato season in the 3 training modules. The training was implemented in 4 provinces (Nam Dinh, Thai Binh, Bac Giang and Bac Ninh) in North-Vietnam. Later this year farmer training in the central highlands (Lam Dong province) will start.
Market research activities
The general objective of the marketing activities is to grow the potato consumption in Vietnam beyond fries and crisp and increase the preference towards new high quality table potato cultivars in Vietnam. The research activities in the first phase included an extensive baseline market study, covering the main consumption hubs in Vietnam, Hanoi and HCMC. Results showed that, although consumers in Vietnam show a positive attitude towards potato consumption, they are rather unaware of the nutritional benefits of potato, the versatility in modes of preparation of potato and the variation in potato quality based on variety characteristics.
60% of consumers in urban Hanoi and HCMC believe that white rice is equally or more nutritious than potato
The inclusion of potato in the diet is considered important in addressing nutrient deficiency among younger children and pregnant women, in particular in relation to iron deficiencies. Sector interventions are thus not limited to potato cultivation, but include focus groups, household panels and sensory consumer tests to obtain in-depth insights in table potato consumption and practices in Vietnam. All combined activities will inform the selection of most potential cultivars for the Vietnamese market, as well as the development of a potato awareness campaign. To measure the effectiveness of the marketing communication interventions the survey applied in the baseline research will be repeated on an annual basis.
Summary
Fresh Studio can look back on a successful first potato season in which a strong basis for the next 4 years has been created to vitalise the Vietnamese potato sector.
‘Rau an toàn Mộc Châu’ or ‘Moc Chau safe vegetables’ are now presented daily on the tables of many families, canteens and restaurants in Hanoi, meeting the demands of many consumers for safe, fresh and delicious vegetables.
This is a result from strong linkages between the Moc Chau district authority, Son La provincial Department of Agriculture and Rural Development (DARD) and the research team of the ACIAR-funded project ‘Improved market engagement for counter-seasonal vegetables producers in North-West Vietnam’.
Productivity and product quality of Vietnamese pork is low. Nevertheless, Vietnam is ranking in the top 10 of most pork consuming countries. In order to enhance the pork sector, Fresh Studio and its projects partner are creating the first safe and sustainable pork value chain in Vietnam.
Background
Pork is by far the most consumed meat in Vietnam- with an annual pork consumption of approximately 30 kg per capita/year. The domestic value of reaches at least US$ 8 billion per year. However, compared to international standards, the productivity and product quality of Vietnamese pork is low. Vietnamese pig farmers face a strong pressure to provide low pig price. This makes the business one of the highest risk sectors in agriculture production. On the other hand, there is also a big concern from the society about the safety of pork caused by pig diseases, chemical residues and unhygienic conditions at slaughterhouses and point of sale.
Approach
This project aims to focus on provision of certified safe pork and on transparency and controllability of the pork value chain- from piglets to fresh and processed meat in the retail. It takes into account the environmental issues as well as the welfare of workers and animal to meet the requirements of international and national certification standards (e.g GlobalGAP, VietGAHP) and customers’ expectations. Different activities and approaches will be implemented during the project period:
Set up the demonstration farm as a model for farm management and training
Develop a set of quality standards covering the whole value chain , from farm to fork
Assess and select contracted farmers who have the capacity and interest to produce safe pork meat according to the developed standards
Offer trainings and capacity building for all stakeholders along the chain
Provide quality control and assurance for pig production and pork meat supply
Development and launch of a marketing campaign aiming to give value to the certified safe pork
Ensure that social responsibilities principles are implemented all along the chain
Respect animal welfare at all stages
Expected outcome
The demonstration farm will be the first Global GAP certified pig farm of Vietnam. This farm will serve as a model for sustainable pig production. The establishment of a new sales channel for professional sustainable and safe pig farmers is expected to provide trust for consumers and gives farmers recognition and premium price. The creation of a safe and sustainable pork value chain will deliver Vietnamese consumers with domestic certified safe pork.
Vietnam is in the process of providing the food necessary for health and growth. While nutritional food is essential in a daily diet, food systems and nutritional intake are changing. The trend in Vietnam is too little-too bad (low nutritional status and low quality) or too much-too sweet/fat.
ACIAR and University of Adelaine organized a small discussion workshop on the 1st and 2nd of December 2014 with the title ‘Nutrition sensitive agriculture- looking through a nutrition lens’. Nutrition sensitive agriculture aims to maximize the impact of nutrition outcomes for the poor, while minimizing the unintended negative nutritional consequences of agricultural interventions and policies on the poor, especially women and young children (World Bank, 2013).
The workshop assembled researchers, development specialists and agencies working in the area of measuring nutritional impact, food security, diet diversity and consumption to share current research findings, indicators and approaches.
Several keynote speakers were invited to share their thoughts on the different nutrition topics in different areas.
According to Ms. Wendy Umberger – Director Global Food Studies and A/Professor Agricultural and Food Economics, University of Adelaide – are food systems changing. The transformation of traditional and modern retailing may impact the health of society. She examined the relationship between food market environment, supermarket penetration, dietary changes, diet related diseases among urban Indonesian households and likely impacts of modern retailing on smallholder farmers in Indonesia.
Ms. Ellen Goddard – Professor and Co-operative Chair, Agricultural Marketing and Business, University of Alberta – discussed the enhancement food and nutrition security during a study on household home gardening in India. She pointed to the effect of growing fruit and vegetables by households, which doesn’t imply an improvement of the nutritional quality of the diets.
Mr. Nguyen Dinh Quang – UNICEF – presented results from NNSSS and MICS research on the nutritional status of women & children in Vietnam. In his presentation he highlighted the growing issue of stunting, an indicator of nutritional status, among children below 5 years and the disparity among rural regions.
Ms. Sigrid Wertheim-Heck – Marketing and BD director of Fresh Studio – is working on dietary topics over the last years and highlighted the circumstance in urban Vietnam: the first impression of nutritious intake seems decent; however the trend is two sides 1) not having enough or 2) not eating enough of the right products. Fresh Studio showed that 70% of Hanoi population is facing potentially dietary issues and the access towards healthy and safe diet is limited in terms of income, action radius and knowledge. The challenge is how to introduce healthy food into the daily diet.
Ms. Sigrid Wertheim-Heck presenting about: Nutrition vulnerability past or future?
Ms. Maria Yvette Reyes and Mr. Nguyen An Vu – World Vision Vietnam – spoke about how to demonstrate impact on specific child well-being aspirations, implying that every child should enjoy good health, should be educated for live, feel love and be able to express love and is protected and participating. Integrated community based meetings of caregivers including among others interactive games about hygiene, child care, nutrition, feeding practices, regular child growth monitoring. The positive impact of interventions with nutrition community clubs was supported by Ms. Nguyen Thi Thuyet Mai – Vietnamese Women’s Union. VWU is working with 755 community clubs in more than 30 areas in Vietnam among others with Unilever’s program to empower women.
Where to from here?
Investments have to be made to develop modules. Vietnam is a good starting place, since a lot of good national data is available (e.g. World vision, NIN, Unicef) and the capacity is there to measure the data in order to develop modules, to check the robustness of different nutrition methods and to create interventions to meet the challenges.
A fruitful platform where lessons learned were shared and future initiatives and nutritional interventions collaboration were made.
Fresh Studio’s Director Marketing and Business development, Sigrid Wertheim-Heck, delivered a keynote presentation during the round table meeting ‘Developing Myanmar’s Vegetable Sector’ in Nay Pyi Taw.
On the 20th of November the Ministry of Agriculture and Irrigation and the Netherlands Embassy in cooperation with Mercy Corps and East-West Seed hosted a Round Table Meeting focusing on the development of Myanmar’s Vegetable Sector in Nay Pyi Taw. The objective of the meeting was for stakeholders from government, private sector and development agencies to jointly reach consensus on the main steps that will be necessary for realizing the growth potential in Myanmar’s vegetable sector and begin planning for their implementation.
Fresh Studio’s Director Marketing and Business Development was invited to give a keynote presentation on Fresh Studio’s experiences in vegetable sector development in Vietnam.
“It was an honor to present Fresh Studio experiences from Vietnam at the round table and inspiring to join the open and constructive discussions with counter parts in Myanmar. The attendance was robust atmosphere very constructive. Conclusion: a lot needs to be done, but first steps are being made in collective addressing the diversity in topics. The organizers will share the outcomes and recommendations for concrete action shortly.”
Participants of the round table Meeting focusing on the development of Myanmar’s Vegetable Sector
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