CHAPTER 3: SUGGESTIONS FOR VIETNAMESE AGRICULTURAL PRODUCTS’
3.1. Suggestions for Vietnamese agricultural suppliers
In order to achieve effective market penetration strategies, Vietnamese agricultural suppliers themselves need to proactively improve their products and operations. While Vietnam has made some positive changes in our trading partnership with the EU market through the signing of the EVFTA, current businesses must make corresponding adjustments in order to take full advantage of the benefits that EVFTA brings again.
Firstly, one of the most important elements for agricultural suppliers penetrating the EU’s market in the present time is to commence the application of technology development and conduct digitization on agricultural production activities. Stemming from the explosion of information technology, requirements for the higher quality of agricultural products overall and in the EU specifically, along with climate change and unexpected global occurrences. With digitization being understood as the conversion of any kinds of information into a digital form, developing high-tech agriculture in cooperation with digitization of documents and custom procedures are inevitable trends to face these problems and is the answer to the development of the country's agriculture.
Agriculture suppliers, with the application of new and advanced technology, will actively need to create a breakthrough quality of agricultural products, further increase the chances to conquer and satisfy the EU market’s distinctive stringency in food quality, safety along with hygiene and technical barriers. The implementation alongside with the digitization of penetration procedures will also grant agricultural suppliers an enhancement of productivity, making sure that the export capacity of agricultural enterprises will be more than enough to meet the increasing demands and timely get to the hands of EU's consumers. This will particularly be helpful as there’s a predicted rise in demand for organic production, as well as the expansion and diversification of organic production in the near future within the Eurozone. Vietnamese agricultural suppliers especially need to make use of the digitization to store and record information about products and goods from production, distribution to consumption will play an enormous role in increasing the traceability of our agricultural products. As the digitized system can track down every small product's processing steps, Vietnam’s suppliers will most definitely be much more confident in the stance of EU’s regulations as the food traceability system will be transparent and concrete the basis for the agricultural products to further integrate into the union’s market.
In summary, with the application of advanced technology as well as the process of digitization in agricultural manufacture will most likely support and amend Vietnam’s agricultural suppliers' inconsistency in quality, getting us one step closer to secure the technical standards in each shipment as well as striving to ensure conditions of traceability.
Secondly, Vietnam’s suppliers should focus on promoting trade promotion measures and the branding for agricultural products on the EU market. According to the research’s analysis, up to now, Vietnamese businesses are still relying heavily on foreign intermediaries to carry out promotional and branding activities for the agricultural products. The long-term continuation of this activity will in particular
adversely affect the profits of companies, the creation and development of a brand image as well as the distribution of Vietnamese agricultural products on the EU market.
The branding must be a top priority in the marketing strategy for Vietnamese agricultural products. An attentive branding strategy will promote the products’
suitability for the European market and increase EU consumer’s recognition of rice brands from Vietnam. Vietnamese agricultural exporters need to investigate the demand, psychology and consumption habits of the EU market related to agricultural consumption from which to build an international marketing campaign for the exportation and the distribution channels. A good quality product also needs aesthetic packaging to attract customers, especially with the customers who value the packaging like in the EU. Design of packaging with characteristics specific to Vietnam or the agricultural companies will increase customer recognition of our agricultural products.
Factors related to packaging such as the brand name, logos printed on the package, what materials the packaging uses need special attention etc. to easily distinguish it from other businesses. Companies should also consider using environmentally friendly materials for the outer packaging of their products to re-emphasize the brand's mindset and image towards the environmental problems.
In addition, it is necessary to focus on trade fairs which are a perfect opportunity to meet and interact with the most potential customers within the Eurozone. Some of the most renowned trade fairs in Europe such as the Global Organic Farmer Fair in Germany (Biofach), the National Brand and Investment Fair (NBI Expo) in Eindhoven, Netherlands etc. will help agricultural suppliers from Vietnam networks, actively interact with their future clients while make use of the audiences to promote their products.
Thirdly, Vietnamese agricultural suppliers need to strive towards a green and sustainable agricultural production. Nowadays, the agricultural suppliers are facing great difficulties and challenges, not only from the COVID-19 pandemic but also from global disputes and political instability, from resource depletion and the strong impact
of climate change. In order to maintain growth, improve productivity and quality of agricultural products, and adapt well to climate change, it is necessary to have a synchronous solution in which suppliers aim towards sustainability and productivity.
Vietnam’s suppliers will be able to make use of their resources and follow the policy of agricultural restructuring closely. With agricultural restructuring meaning the process of changing in the structure of industries in the agricultural sector aiming to a sustainable and resource friendly production, suppliers will need to make adjustments to gain flexible and sufficient agricultural land use planning to change the structure of crops and livestock towards diversity, high added value in the agricultural products. This will also involve switching from low value and less competitive agricultural products to high value and competitive products or in this case, focusing on fast growing competitive export agricultural commodities. Restructuring will include increasing investment in infrastructure to support concentrated commercial use, investments in environmental monitoring and warning systems and disease surveillance. Agricultural manufacturers need to associate with businesses, corporations or gather into a cooperative model to easily apply technology to the process of growing and harvesting. In addition, enterprises and cooperatives producing agricultural products also need to pay attention to building a system of post-harvest preservation and processing.
Agricultural firms need to accelerate the implementations in accordance with agricultural restructuring to further perfect the quality of agricultural products for export, making quality the main staple of Vietnamese agricultural products. While having already been considered by the EU markets as having high quality products that cater to the long-term demand of the union’s consumers, Vietnam’s agricultural suppliers are now facing a new challenge as the EU is now tightening its grip after the previous incidents of having received warnings for exceeding the residue levels of agrochemicals regulated and the goal of eliminating the "yellow card" in the period 2021-2026 is very important as if we are not consistent with our green initiatives, it can lead to a "red card"
penalty from which agricultural products will be banned from being exported to the EU.
So with the application of green and sustainable production, agricultural suppliers will most likely be one step closer to get back on the EU’s good side.
Lastly, Vietnamese agricultural suppliers need to start developing new, high quality agricultural products. With the European Union–Vietnam Free Trade Agreement coming into effect, many of our agricultural products now can have tariff- free privilege. This will be a great opportunity for Vietnam to boost our agricultural product exports as well as diversify the export product portfolio and develop new products into the EU market. High quality products with new variations of the products will help Vietnam expand our market share and compete against other rivals in the competitive market of agricultural products. This also stems from the fact that impacts of the COVID-19 pandemics, the climate change alongside with the strained political situations all over the world are creating difficulties for the trade and export of agricultural products, stepping up to improve machinery and processing methods to diversify products will be a great way to cope with the current state.
For example, businesses can develop methods to maintain agricultural products’
quality longer during the transport as due to the impacts of recent global events, logistics and supply chain have been much slower. Companies can apply the method of drying and deep processing with clean heat for fruits, for instance (which has been proven to be quite successful for the province of Son La in 2021). Large reputable agricultural processing and exporting enterprises in the market possess modern machinery and equipment and well-qualified product development teams will be fully qualified to research and launch new product lines. Vietnam needs to constantly improve the quality of that product as well as always meet the standards and certificates set by the EU such as GlobalGAP (European Retailers standard for Good Agricultural Practices) to ensure better quality farming and clearer origin with products.