VN rice ’needs better branding’

on Vietnamnet, 16:53' 03/12/2009 (GMT+7)

VietNamNet Bridge – Rice has a massive and continuously expanding market in the world, but Viet Nam should create a brand of its own to increase the export value of the staple, especially in developed Western markets, experts say.
Failure to brand its rice property had led to Viet Nam failing to compete with Thailand in terms of value, and average prices of Vietnamese rice were often lower than their Thai counterparts by US$100-200 per tonne.
Persistent global food shortages, reduced arable land, bio-energy demand and climate change would combine to create an insatiable market for rice in the years to come, said Vo Hung Dung, chairman of the Viet Nam Chamber of Commerce and Industry chapter in Can Tho City.
He was speaking at a workshop on rice exports last Sunday in Vi Thanh, capital city of the Cuu Long (Mekong) Delta Province of Hau Giang.
Dung quoted the Food and Agricultural Organisation as reporting that agricultural production needed to increase by 70 per cent in the next 40 years to feed a world population of 9 billion people.
However, the country would find it hard to ride the wave of this increasing demand, given that "a delta that is dubbed Asia’s rice bowl has failed to build a brand for its own", he added.
"So, it’s imperative that we develop a branding strategy for Vietnamese rice," Hiep stressed.
Failure to brand its rice property had led to Viet Nam failing to compete with Thailand in terms of value, and average prices of Vietnamese rice were often lower than their Thai counterparts by US$100-200 per tonne, he said.
"If the country goes on to export 7 million tonnes next year, it will lose $700 million in value."

Customers selective

"According to US’s World Agricultural Supply and Demand Estimates, this year the world will suffer a deficit of around 5 million tonnes of rice due to the margin between production and consumption," said Tran Huu Hiep, a senior member of the Mekong Delta Steering Committee.

"Little has been done to make rice from Viet Nam a world famous brand," noted Herby Neubacher, a German who has been working in the country as a marketing and communication consultant in food and seafood promotion.
"The country’s brands are not as widely distributed as its products," said Neubacher, adding that Viet Nam’s reputation as the world’s second largest rice producer was known only within the rice industry circles and mostly unknown to the public.
He noted that rice farmers he had met in the Mekong Delta were mainly concerned with getting more yield per hectare like Thailand, rather than selling what they have and communicating what they do.
"Food is not only for nourishment, it’s also for enjoying," he said, noting that the latter added value that could be earned by developing a good brand. "Western consumers looked for food that was good for their health and for their day-to-day delight," he said.
"So customers are apt to pick and choose, and this demand needs information," he said.

They may ask questions like "where the food comes from, who produces it, what conditions has it been grown in and transported and how far".
Therefore, ethical positioning – like environmental friendliness, responsibility towards the community, safety, workers’ well-being and fair competition – becomes essential in today’s marketing, and the country should exploit its rural production conditions as a unique selling point, Neubacher felt.
"Products that are really made by hand, done with age-old systems have a better position in the market and can gain more interest than normal mass (produced) products.
"Vietnamese farmers are said to work with their ‘backs against the sun’, and that way to earn a living is well loved and well appreciated by the global public," he said.

He recommended that rice from Viet Nam be grown and harvested in "clean and safe conditions", so that the country can market its rice as "handmade and very safe to enjoy".

"Viet Nam is good when it came to safety of agricultural products, and it was high time it was spoken about," he said, adding that the country could use tourism as a vehicle to transport the name of Viet Nam as a major food supplier.

Generic brandingAfrican consumers were eating Vietnamese rice, but they did not know whether the rice they were eating comes from Viet Nam or Thailand because they bought from a big marketplace, said V. Subramanian, managing editor of RiceToday magazine.
"Price difference is still important, but if Vietnamese exporters focus a little bit on branding, they do not have to discount too much," he said.
Generic promotion of the country as a producer of high quality rice would be more effective than promotion of individual brands, he added.
"Rice producers should communicate brand, design and package as a language that can influence buyers," said Richard Moore, a marketing and communication expert.
"In markets that have not seen any Vietnamese rice, introduction of the first rice was "extremely important" since it could create a lasting impression that Vietnamese rice was of high quality."
"It will make it easier for other rice brands from the country to enter the markets," he explained.
The country had done very well in the African rice market, said Abhishek Sahai, vice president of rice division of Olam International Limited, one of the world’s leading players in rice business.
He noted that African markets accounted for around 30 per cent of the country’s rice export in recent years, and market potential remained enormous since most African country were highly dependent on rice imports and likely to double volumes over the next 10 years.
However, to strengthen its position in the market, Viet Nam’s rice exporters should ensure consistency of quality, which was still a problem, issue standard specifications and have good packaging materials – areas in which the country was beaten by Thailand, Sahai said.

"Vietnamese rice has got an entry [into African markets] due to its lower price, and there is a need to ensure a price differential to Thai rice so that this place won’t be reversed," he noted.

VietNamNet/Viet Nam News