Dutch ready to provide added agricultural value

The Netherlands and Vietnam are both world players in the export of agricultural products. VIR’s Hanh Tung talks with Simon van der Burg, the Netherlands consul-general in Ho Chi Minh City, on the business opportunities offered by Vietnam’s agriculture and food sector to Dutch firms.

Dutch agriculture is renowned for its high-quality know-how and has a good international reputation concerning food safety and sustainable production. There are examples of Dutch success in Vietnam’s agriculture sector like FrieslandCampina, De Heus, Dalat Hasfarm or Nedcoffee. What are the reasons behind their success?

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Source: Holland, pioneers in international business

Publication date: June 2014

Related article about Public Private Partnerships (PPP):

Successful agricultural projects show great opportunities for future investments Vietnam is one of the 11 countries in the world which applies the PPP model in agricultural projects on a trial basis …+ Read more

BopInc and partners publishes: Shared value at the Base of the Pyramid

‘Inclusive Innovation-shared value at the Base of the Pyramid’ is the first publication of a series of five based on experiences and insights from the pilots within the ‘Three Pilot for Pro-Poor Innovation (3P4PPI) program in Bangladesh, Ethiopia, Kenya, Rwanda and Vietnam. This program is a close cooperation between BoP Innovation Center (BoPInc) and its partners, among others Fresh Studio.

To accelerate the development of successful and profitable BoP innovations it is necessary to capture and share knowledge and identify issues that impact all sectors and themes. The objective of the ‘3 Pilots for Pro-Poor Innovation’ (3P4PPI) program is to gain more knowledge and experience on market-driven pro-poor innovations through the development of three separate pilots. Throughout this process, learning’s are captured, processed and shared with different organizations interested in and working on inclusive innovations.

This publication sets the scene on inclusive innovation. This is the market-driven development of an innovation along the value chain which includes low-income groups in the process and has impact in a social, economic and ecologically sustainable way. 

This publication highlights the latest insights both in theory and in practice to research the BoP market and introduces main challenges encountered in the pilots

The publication is available through download on the BopInc website

Assisting the development of an organic vegetable value chain

HANOI – For one of its public sector clients, Fresh Studio assisted in the development of an organic vegetable value chain.

The client had already developed several organic vegetable farming groups, which were certified using the IFOAM acknowledged PGS certification system.

For more information see www.ifoam.org

Fresh Studio worked with the client to develop a distribution and marketing system for their organic vegetables. The main challenge was to gain the trust of Hanoi consumers, as marketing research revealed that 81% of modern supermarket shoppers in Hanoi distrust any food safety claims.

To win this trust, a Triple A marketing campaign approach was developed and implemented (Attention-Attraction-Adoption). Marketing materials developed for this triple A approach enabled Hanoi consumers to understand what organic vegetables are, how the certification system works, who the farmers are, and where and how the vegetables are produced. Through in-store campaigns in Hanoi supermarkets, thousands of consumers were reached, with very good sales as a result.

Fresh Studio seeks to create value chains in Vietnam

HANOI – Siebe van Wijk of international consulting, R&D and trade company Fresh Studio reports on its efforts to create value chains in Vietnam by profiling two key initiatives with local producers.

Vietnam is booming. In recent years, the country has ranked as Asia’s second fastest growing economy after China. Its entry to the WTO last year has opened the door to record high foreign direct investment in many sectors. With Vietnam’s commitment to allowing 100 per cent foreign-owned investments in the retail sector by 2009, many companies are looking to tap into the large consumer market of over 85m people. But opening its markets also means more competition.

One area where Vietnam is feeling the heat from competition is in the horticulture sector. An influx of products including carrots, potatoes, onions and tomatoes from China and durian and mangosteen from Thailand are threatening Vietnamese
farmers in their own backyard. With its 20 skilled professionals and two offices in Vietnam, Fresh Studio is working to transform the country’s traditional fruit and vegetable distribution channels into more dynamic value chains. The key difference is that firms that participate in a value chain – farmers, traders and retailers – form a strategic alliance which focuses on the competitiveness of the overall chain and not just on their own short-term profit.

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Source: AsiaFruit Magazine

Publication date: July 2007

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Creating value chains in Vietnam

HANOI – Vietnam is booming. For many years, Vietnam has been the second fastest growing economy after China. Entrance to the WTO recently has opened the door to a record high number of foreign direct investment in many sectors.

Committed to allowing 100% foreign owned investments in the retail sector by 2009, many companies are looking to tap into the large consumer market of over 85 million people. But opening its markets also means more competition. One sector where Vietnam is feeling this competition is in the horticulture sector. Chinese carrots, potatoes, onions, tomatoes, Thai durian and mangosteen threaten Vietnamese farmers in their own backyard.

Value chains
With its twenty talented professionals and two offices in Vietnam, Fresh Studio® is busy transforming traditional fruit and vegetable distribution channels into more dynamic value chains. The key difference is: firms which participate in a value chain – farmers, traders and retailers – form a strategic alliance which focuses on the competitiveness of the overall chain and not just on their own short term profit. Firms in a value chain realize that they need each other to be successful, if one fails, everyone in the chain is hurt. They are aware that they are interdependent, and they are driven by consumer demands.

Fresh Studio® is currently implementing value chain projects for a wide range of fruit and vegetables including avocado and watermelon for both the domestic and export market. A common factor in all these projects is that they align all crucial chain actors: seed companies (eg. Rijk Zwaan), crop protection (eg. Syngenta), farmers, traders, transporters, packaging companies, finance (Rabobank), modern wholesalers (METRO Cash & Carry) and retailers to create win-win situations for all involved.

One of the first modern distributors to see the potential in Vietnam was METRO Cash & Carry. Since 2002, they have invested US$ 200 million dollar and opened eight large stores in key locations of Vietnam, with more stores planned for the near future. Within four years, METRO has become the largest wholesaler of Vietnam. Fruits and vegetables are important for Metro. With no professional supply companies present in Vietnam who can control the quality from field to fork, METRO decided it needed to meet consumer demand for safe food.

To do this successfully, METRO Cash & Carry, requested Fresh Studio® to develop a project for a new vegetable sourcing system which would assure quality and food safety. A key element of the project was to be as close as possible to the farmers. To achieve this, METRO is investing in a fresh distribution centre (DC) in the heart of Vietnam’s premium vegetable growing area, Dalat. Since this project will play a key role in linking small farmers to modern retail chains, the investment is co-funded by a special public-private partnership program of the Dutch government.

Because of its high altitude (1000-1600 m), sunny weather and availability of water, Dalat has a suitable climate for the year round cultivation of a wide range of fruits and vegetables. We strongly believe that Dalat has the potential to become the main year-round vegetable supply area for urban Asia. The Vietnamese government is also realizing this, and is upgrading the airport in Dalat and the road to HCMC, Vietnam’s eight million population mega city.

Being present in this unique production area allows METRO to source directly from farmers, instead of working with a long chain of collectors and traditional wholesalers. METRO can now procure traceable vegetables in the cold chain within one hour after harvesting. To assure food safety and quality, Fresh Studio’s quality-assurance specialist trains the METRO staff in preparing the DC for HACCP certification. At the same time pre- and post-harvest specialists of Fresh Studio® are developing cultivation protocols (good agricultural practices) for every key vegetable required by METRO. Farmers will be selected, trained and monitored to ensure that these GAPs are met. An extension system will be developed to support farmers in increasing their productivity, quality of the vegetables and meeting basic food safety standards.

Fresh Studio® is also busy setting up a small experimental farm to test the newest vegetable varieties in close cooperation with leading vegetable seed companies. The experimental farm will be used to demonstrate the GAPs, and to showcase value-adding technologies to local farmers.

The project will first focus on meeting the surging demand from METRO stores in Vietnam. Down the line, it will be possible to export directly from Dalat to METRO stores and clients in other countries.

Fresh Studio® is also developing an avocado value chain. Avocado is a relatively new product in Vietnam, where the majority of the Vietnamese consumers are not yet familiar with the product itself, its nutritional values and its uses. When consumed, avocados are currently used mainly as an ingredient for fruit shakes: the well known “Sinh To Bo”.

The Vietnamese Avocado is grown in one of the most important coffee production areas of the world, Dak Lak Province. At first coffee farmers in this area only used avocado trees as windbreakers and shade trees. In the past five years though, Vietnamese consumers and traders have slowly begun to discover avocados. Prices have increased, and farmers have responded by developing very small avocado orchards (10-100 trees). We estimate that currently about 250,000 avocado trees are cultivated in Dak Lak Province and in the main season about 200 tons of avocado per day are sold in the domestic market.

A special rural development program of the German and Vietnamese government which wanted a market based intervention strategy, requested Fresh Studio® to develop a master plan to upgrade the avocado sector of Dak Lak. With 20 percent of Vietnamese children less than five years of age being under-developed for their age, avocado is seen as attractive product which can bring cash to farmers, and at the same time provide Vietnamese consumers and poorer farming families with healthy nutritious food.

The master plan, which was developed by Fresh Studio® and the Dak Lak Centre for Science and Technology Application focused on developing the local market demand for avocado, introducing an avocado quality label and improving the very basic local production, post harvest, packaging and transport system.

Fresh Studio® marketing specialists have developed a consumer awareness campaign. The market demand is expected to grow substantially, once consumers become more aware of the value avocados offer for health and beauty. It is anticipated that the ‘Discover the magic…’ campaign will seduce consumers into trying new ways of enjoying avocados, both as a fruit and as a vegetable. Saigon Co.Op Mart, the largest Vietnamese supermarket chain and METRO Cash & Carry are partners in this campaign. Cooking demonstrations and special avocado promotion teams will inform Vietnamese consumers in the stores during special avocado weeks, which are expected to attract media attention.

Besides creating more demand, close cooperation between farmers, collectors and traders has been organised in order to produce a higher quality avocado. The focus is on quick wins in harvesting and post- harvest operations. We introduced new and simple avocado harvesting tools; developed Standard Operating Procedures (SOPs) for harvest and post-harvest operations; developed more homogenous avocado batches consisting of the same maturity levels; piloted with cold storage and improved packaging solutions.

To enable these high quality avocados their identification in the market, an avocado quality label was introduced, named DAKADO (see www.dakado.vn). In the coming year, this label will be further developed into a brand, and will be ‘institutionalised’ through the formation of a marketing board, which will use a levy to fund market development and R&D.

Introducing new concepts and approaches requires a passion for fresh produce and an alliance of collaborators who can act and think creatively. Successful examples lead the way and bring the whole F&V sector of Vietnam to a higher level.Also interesting to read: