major assignment analyzing the organic fruits and vegetables market in vietnam

Research scopeThe research team will analyze the organic fruit and vegetable market within alarge market in Hanoi city to be able to analyze and present analysis results, surveyprices, f

BANKING ACADEMY OF VIETNAMADVANCED PROGRAM====================

MAJOR ASSIGNMENTSUBJECT: MICROECONOMICS

ANALYZING THE ORGANIC FRUITS AND VEGETABLESMARKET IN VIETNAM

Lecturer: Thịnh Phương HạnhClass: ECO-01H07

Group members

1 Nguyễn Thị Linh 2 Đỗ Thị Thùy Linh3 Nguyễn Anh Thư4 Tạ Huyền Trang5 Mai Thanh Thủy6 Hoàng Yến Vy7 Hoàng Bá Huy

Hanoi, December 2023

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NameID StudentContribution Rate

Student’s Confirmation/Commitment:

We confirm that we have personally completed and completed this assignment Any reference sources used in this assignment have been explicitly referenced by us.Student’s Signature (*)

1 Hoàng Bá Huy2 Nguyễn Thị Linh3 Đỗ Thị Thùy Linh4 Nguyễn Anh Thư5 Mai Thanh Thủy6 Tạ Huyền Trang7 Hoàng Yến Vy

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TABLE OF CONTENTS

A INTRODUCTION 4

I Reason for choosing the topic 4

II Research scope 4

III Research subjects 4

IV Research Methods 4

B CONTENTS 5

I THEORETICAL BASIS 5

1.1 Organic fruits and vegetables 5

1.2 Demand and supply 5

II THE SITUATION OF FRUITS AND VEGETABLES MARKET IN VIETNAM 7

2.1 Current supply for organic fruits and vegetables 7

2.2 Current demand for organic fruits and vegetables 10

2.3 The price of organic fruits and vegetables 12

III FACTOR AFFECTING ORGANIC FRUITS AND VEGETABLES MARKET 14

3.1 Factors affecting consumer’s decision to buy organic fruits and vegetables 14

3.2 Factors affecting organic fruits and vegetables production 17

A INTRODUCTIONI Reason for choosing the topic

In this day and age, when environmental pollution is becoming a serious problemin the world, people are increasingly worried about their health and start to beconcerned about factors surrounding their lives to avoid as many types of diseases asthey can During this period, organic fruit and vegetable products have graduallybecome more popular and prominent than ever Not only because of people's thoughtson environmental issues and health safety, this product is also gradually becoming anew trend, attracting many different customers in Vietnam.

II Research scope

The research team will analyze the organic fruit and vegetable market within alarge market in Hanoi city to be able to analyze and present analysis results, surveyprices, fluctuations in supply and demand as well as factors affecting change in themost specific and accurate way.

III Research subjects

People living in the suburbs and center of Hanoi city aged 18 and over.

IV Research Methods

To learn and analyze the organic fruit and vegetable market, the research teamcollected reliable information sources and also used a number of specific methods suchas online surveys and direct interviews with consumers to get the most accurateinformation about this product.

IV Objectives of the study

Learn about the current market situation of organic fruit and vegetable supply and demand in Hanoi.

Analyze factors affecting product supply and demand.

Introduce the trend of developing the organic fruit and vegetable market and how to develop it.

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B CONTENTSI THEORETICAL BASIS

1.1 Organic fruits and vegetables

Organic fruits and vegetables are the name of fruits and vegetables produced by natural methods and do not harm the environment or water sources Organic fruits and vegetable products are really safe for consumers' health Since its inception, organic fruits and vegetables have attracted the attention of many housewives This is a completely safe product for health with "6 NO" standards:

Chemical insecticideHerbicide

Plant growth stimulatorChemical fertilizer NPKPreservative

Genetically modified organisms (GMOs)

Therefore, organic fruits and vegetables are a very safe choice for users Furthermore, organic fruits and vegetables contain more diverse and higher levels of nutrients than conventional vegetables

The proportion of antioxidant compounds in organic fruits and vegetables is ≥ 40% compared to normal ones (according to scientists at Newcastle University in the UK)

Contains more beneficial minerals for the body (iron, zinc )

The organic movement was developed as an eco-friendly alternative means of farming to avoid the negative effects of conventional agriculture, which include reductions in soil fertility, biodiversity loss, environmental degradation, water contamination, and the risks from toxic agrochemicals Although the area devoted to organic production has been increasing in a lot of locations over time, multiple challenges undermine efforts to develop a robust organic sector, especially in developing countries.

1.2 Demand and supply 1.2.1 Demand

Quantity demanded: the amount of a good that buyers are willing and able to buy at a given price.

Law of demand

Law of demand states that, other thingsequal, the quantity of a good purchasedvaries inversely with its price

Determinants of demand Income

Prices of related goodsNumber of buyers

Determinants of supplyTechnology improvementInput price

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According to the Hanoi Plant Protection Department, in addition to organicvegetable production by farmer groups, some businesses have also begun to participatein organic vegetable production such as Viet Lien Company with an area of 3 hectaresof organic vegetable production Long Bien district; Hoa Lac Ecological PotentialExploitation Company Limited has an organic vegetable production area of 10hectares in Thach That district; Hoa Lam Vien Company specializes in producingorganic native vegetables.

Enterprises mainly operate in the form of centralized production management,such as renting fields and hiring workers to organize production The average output oforganic vegetables consumed by producer groups ranges from 40 - 50 tons, Viet Lien10 - 12 tons, Eco Hoa 25 - 30 tons.

Organic vegetables in Hanoi are currently sold at 41 supermarkets, stores, andorganic vegetable dealers such as Soi Bien, Haprofood, Vian food, AEON Mall,Unimart, Vinmart, 9 Food, Ecofood, Donavi, Top Green the purchasing price of allkinds of vegetables and fruits is stable at an average of 15,000 VND/kg, on averageeach member of the production group has an income of 5 - 7 million VND/month afterdeducting costs.

2.1.2 Expense

Organic vegetable production requires costs about 30 - 35% more than the cost ofmass vegetable production Unlike conventional vegetable production, organicvegetable production requires strict requirements throughout the production process In

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addition to ensuring standards for planting land and irrigation water, from inputmonitoring, planting and care processes, to harvesting and consuming products, allmust comply with prescribed standards When producing organic vegetables, peoplewant to provide the market with quality organic vegetable products.

However, with such high costs, it is inevitable that the price of organic vegetablesis higher than the price of mass-market vegetables In fact, not all organic vegetablesproduced are sold at their true value Except for branded production places such asDang Xa, Dong Du, Linh Nam that have facilities to purchase directly from thefields, the output of these localities is guaranteed, so the selling price of vegetables isconsistent with the cost that the farmer spent However, there are many cooperativesthat produce organic vegetables but have not found an outlet for their products.Therefore, although many people have participated in organic vegetable productioncooperatives, when they harvest, they have to bring them to the market to sell In themarket, many types of organic vegetables are sold, mainly mass-produced vegetables.Vegetable prices in the market are often unstable and fluctuate day by day, so theincome of organic vegetable farmers is unstable.

2.1.3 Product quality

In recent years, Vietnamese agriculture has developed strongly, especially inresearch and application of scientific and technical advances in the production andprocessing of organic food However, in the Vietnamese organic product market thereare still many products that are not competitive in quality and design, and many typesof products do not meet food safety standards The main causes leading to thecondition can include:

The first reason is that farmers are still weak in qualifications The organicvegetable production process requires strict requirements in all stages of theproduction process However, members of organic vegetable production cooperatives,who are familiar with traditional vegetable farming methods, lack capital to invest ininfrastructure and are on a small scale, making it difficult to ensure proper growingstandards Organic vegetables and selling products on the market is extremelydifficult Since then, organic vegetable products have been born that do not really meetregulatory standards These organic vegetable products that do not guarantee qualityare supplied to organic vegetable businesses and sold on the market.

The second reason is that organic vegetable business owners have difficultychecking the quality of vegetables.

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Methods that can be used to check and evaluate the quality of vegetables include:sensory methods, experimental methods, expert methods, and trial methods Assessingvegetable quality using sensory methods is simple, convenient, and low cost, but theaccuracy is not high and difficult to be objective Determining food hygiene and safetycriteria by means of testing is highly accurate, objective, and reliable, but requires along time (2-3 days) and costs too much (1.5-3 million VND/day) sample), islaborious and not always possible and not everyone can do it This method is mostlyonly implemented by officers of the Plant Protection Department and marketmanagers And fruits and vegetables are Fresh food products spoil quickly, so usingtechnical measures to check the quality of vegetables is not feasible in practice The third reason is that organic vegetable production has low productivity andhigh costs, but in reality many people have to sell vegetables at the same price asregular vegetables Therefore, a part of producers is not interested in producingorganic vegetables.

Another reason is that organic vegetable businesses want to make high profits, sothey buy vegetables floating on the market, label them as organic vegetables and sellthem at the price of organic vegetables, making consumers doubt the quality of organicvegetables This situation is quite common in the market today.

Getting an organic certification is not a simple thing, but there are still businessesthat claim to sell organic products.

The specific supply of some organic vegetables for the Hanoi market is shown inthe table below:

The table above shows that the average daily organic vegetables supply increasesevery year In 2019, the supply of organic vegetables was 220 tons/day, by 2020 it

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increased to 255 tons/day (equivalent to an increase of 15.9%), in 2021 the supplycontinued to increase to 300 tons/day (an increase of 17.6%) compared to 2020

The amount of organic vegetables supply increases every year because the organicvegetables growing area continues to expand according to organic vegetablesproduction development projects By 2021, the area planted with organic vegetables inHanoi will be 2,105 hectares, an increase of nearly 500 hectares compared to 2019.Most other localities such as Hai Duong, Hung Yen have increased the area plantedwith organic vegetables During the production process, farmers actively apply scienceand technology and plant new varieties for higher productivity That is also the reasonwhy the amount of organic vegetables supplied to the market is increasing.

2.2 Current demand for organic fruits and vegetables

The global organic fruits and vegetables market size is estimated at USD 41.91 billion in 2023 and is expected to reach USD 68.15 billion by 2028.

2.2.1 Market Driver

Consumer Awareness of Healthy Diet

The demand for organic fruits and vegetables is predicted to increase as a result of rising health consciousness, expanding fitness trends, and a shift toward healthier goods like organic fruit and vegetable products For example, customers are becoming increasingly interested in organic aloe vera juice It's consumed for its hydration properties, liver function, ability to help with constipation, clear skin, nutritional boost,relief from heartburn, digestive advantages, and beauty tips Organically cultivated fruits and vegetables are in more demand among health-conscious consumers due to their superior nutritional value.

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Furthermore, sedentary lifestyles and unhealthy eating habits have contributed to an alarming rise in the prevalence of chronic diseases like cancer and heart problems Thus, in order to lower the risk of developing chronic illnesses, consumers have adopted a healthy diet that includes natural and organic products As a result, the demand for organic fruits and vegetables as well as related processed foods has increased globally, driving the market's growth

Consumer’s Environmental Consciousness

Organic farming has been linked to several environmental advantages, such as preserving surface and groundwater, farm ecosystems, and soil Since buying organic products is seen as an environmentally friendly action, environmental concern is a critical factor in determining the demand for organic fruits and vegetables A consumer's intention and behavior to make green purchases are therefore stronger when they are more environmentally conscious.

2.2.2 Market Opportunities

Investing in Organic Processed Food and Drink Products

Nowadays, in order to serve customers who become more concerned about their health and seek food products made with natural and organic ingredients to preserve them, various companies are cooperating with organic farmers and launching processed food products like drinks and confections made with natural and organic ingredient, which is further likely to rise the demand for organic fruits and vegetables.

Exploration of Organic Fruits and Vegetables in Skin Care and Beauty Care Products

On the grounds that many artificial chemicals in skincare and beauty care products lead to severe side effects, various skincare and beauty care brands are launching their products with organic labels These organic skincare and beauty care products comprise organically grown fruits such as almonds, strawberries, apples, grapes, carrots, oats, and aloe vera This is also one of the factors contributing to the growing demand for organic fruits and vegetables.

Garnier, for example, has introduced organic skincare and beauty care products The new Garnier Organic line is made up of six organic ingredients: lavender, cornflower, and thyme from France, argan from Morocco, lemongrass from Sri Lanka,and konjac root from the Asian Highlands

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