Dairy productsPost forecasts dairy

Dairy products
Post forecasts dairy consumption will continue to grow in coming years thanks to the following supportive elements:

+ With rising disposable income levels, and a growing middle class, Vietnamese consumers are changing their food consumption patterns, shifting their diets to more protein, including more meat and dairy products

+ The Vietnamese government has launched a number of initiatives focused on raising Vietnamese citizens’ average height, and dairy products play an important role in those initiatives.

+ Strong investments in dairy sector, made by both local and foreign investors, will provide local consumers with a wider choice of dairy products.

+ Current reductions in import tariffs on several dairy products (most of dairy products from chapter four of the tariff book have tariff rates ranging from 7 percent to 3 percent) should favor imported dairy products to Vietnam

U.S. exports of dairy products to Vietnam have continually increased at the average growth rate of 19% during the period 2010 – 2014. Last year U.S. dairy export value reached $265 million, up 10% over 2013. Major U.S. dairy products exported to Vietnam include non –fat dry milk (65 - 70%) and whey (9%). The other dairy products like infant formula, drinking milk, yogurt, butter and cheese also find Vietnam a promising market as domestic production is relatively small, just meet 25 – 30% of the total market demand. However, it is necessary to notice that competition on dairy products in Vietnam is tough when other big players like France, New Zealand, Australia or The Netherlands are also spending great efforts to explore this growing market.

Fresh Fruits
Fruits are an important part of the Vietnamese diet, and consumption of fresh fruits is high. Products such as Washington apples, table grapes, and pears have become increasingly popular in recent years. However, inadequate handling and distribution facilities (poor cold chain infrastructure) hinder greater sales of these products, which are sold at a premium over Chinese varieties and domestic varieties.
Fierce competition between China, Australia, New Zealand, South Africa, and Chile for the Vietnam market has developed over the past five years. Moreover, under the ASEAN-China FTA, since January 1, 2012, exports of fresh fruits from these countries to Vietnam have also enjoyed a tariff rate of 0% , while a rate of 10% has been imposed to table-grapes, apples and pears imported from Most Favored Nations (including the U.S.).

Ho Chi Minh City is the primary market for U.S. fresh fruits. Sales in Hanoi are rising as well, but the city’s small number of high-end markets, less frequent shipping links to major ports, and proximity to China (a major source of cheaper fruit) all constrict U.S. sales in Hanoi.

Large quantities of pineapples, citrus fruit (oranges and limes), and table grapes (just developed recently) are grown locally and sold at very low prices during the harvest season. Some importers have reported some success selling California oranges against cheaper oranges and Clementine from China.
U.S. exporters will need to convince consumers that their product quality is superior enough to justify the premium price.

U.S. exports of fresh fruit (apples and grapes) were $54 million in 2013, and in 2014 they reached a new record of $74 million, an increase of 37 percent.

Special note:
Vietnam has accepted imports of table grapes, apples, cherries and pears from the USA. For other fresh fruits, especially new-to-market fruits, pest risk assessments (PRAs) need to be conducted by Vietnam’s Plant Protection Department in Hanoi, and it normally takes one to three years to complete a PRA. If you have questions about the PRA requirement, please contact FAS Vietnam.

Snack Foods
General demand for snack foods, especially chips, extruded snacks, chocolates, dried fruits, and nuts, is growing due to higher living standards and improving disposable incomes. American-made snack foods are extraordinarily popular with consumers who can afford them. Many shop owners, from street stalls to new mini-shops, report high turnover of snack products such as potato chips, nuts, biscuits and cookies. Several foreign companies have established factories and joint venture partnerships with Vietnamese confectioners. Pringles and Lay’s potato chips are very well received, particularly in Ho Chi Minh City and Hanoi. Hershey’s and M&M chocolates are popular in Vietnam. Foreign-invested snack manufacturers as well as local manufacturers have begun production in Vietnam.

Snack foods have traditionally been subject to stiff import rates (ranging from 15 to 40%), especially as investment in domestic manufacturing increases. However, Vietnamese are consummate snackers and exporters should find a way to service this market with high-quality products.

U.S. exports of snack foods to Vietnam strongly increased in 2014 with an export value of $9.8 million, a year-on-year increase of 61.9 percent.

Canned Meat Products
Exports of canned meats (HS: 1602) to Vietnam strongly increased during the past 5 years. From a modest export value of about USD 17 million in 2009, exports of canned meats jumped to a record of USD 85.7 million in 2013, despite high import duty ranging from 30 to 40%. Hong Kong topped the list of canned meat exporters to Vietnam. In 2013, its export value reached USD 71 million, accounting for 83% of the total exports. U.S. canned meat exports to Vietnam had gone down from USD 6.3 million in 2010 to USD 2 million in 2013, but rebounded in 2014 with an exports of USD 7.1 million, up 254% over 2013.

Tree Nuts
Vietnamese consumers are more concerned about healthy products and food safety; they show greater attention to healthier foods. Their demand on food is more sophisticated in terms of quality and food safety. Higher prices for better quality and healthy foods are more acceptable to middle-class consumers.

Vietnam boasts a large local supply of nuts, such as cashews and peanuts, which are increasingly finding lucrative markets abroad. This raises domestic prices and creates opportunities for imports of alternatives like U.S. pistachios, almonds, and other nuts. Marketing efforts to introduce premium natural nuts and nuts not grown in Vietnam could yield good results. Moreover, given the fast growing bakery industry in recent years, bakery demand for nuts and dried fruits is increasing.

U.S. exports of nuts to Vietnam in 2013 reached $263 million, an increase of 46.4% over 2012, and 7 times the value in 2009. Exports in 2014 continued rising to $286 million, a year-to-year increase of
17.4 percent. Current tariff for nuts range from 20 to 30 percent with the exception of 10 percent for in- shell walnuts.

Note: It is difficult to estimate the market size for imported nuts into Vietnam due to the fact that Vietnam is now becoming a trans-shipment point for nuts bound for neighboring countries.

Dried fruits
California raisins are becoming popular in Vietnam. These products are mainly sold as snack foods and as ingredients in the bakery industry. Tariff on raisins is now reduced from 17 percent to 13 percent.
U.S. exports of raisins to Vietnam were $5.6 million in 2013, up 13% over 2012. Export value in 2014 stood at the same level as that in 2013 (USD 5.56 million vs USD 5.6 million). A marketing strategy to promote raisins and other dried fruits (possibly cranberries) could reap great results here.

Results (Vietnamese) 1:

Sản phẩm từ sữaBài dự báo sữa tiêu thụ sẽ tiếp tục phát triển trong những năm tới nhờ các yếu tố hỗ trợ sau:+ Với tăng mức thu nhập dùng một lần, và một tầng lớp trung lưu ngày càng tăng, người tiêu dùng Việt Nam đang thay đổi mô hình tiêu thụ thực phẩm của họ, thay đổi chế độ ăn uống của họ để protein hơn, bao gồm thêm thịt và sản phẩm từ sữa+ Chính phủ Việt Nam đã đưa ra một số sáng kiến tập trung vào việc tăng chiều cao trung bình là công dân Việt Nam, và sản phẩm từ sữa đóng một vai trò quan trọng trong những sáng kiến.+ Mạnh đầu tư trong ngành chăn nuôi bò sữa, được thực hiện bởi nhà đầu tư địa phương và nước ngoài, sẽ cung cấp cho người tiêu dùng địa phương với một sự lựa chọn rộng hơn các sản phẩm sữa.+ Hiện tại cắt giảm thuế nhập khẩu trên một số sản phẩm sữa (hầu hết các sản phẩm sữa từ chương bốn của cuốn sách thuế có tỷ lệ thuế quan khác nhau, từ 7 phần trăm đến 3 phần trăm) nên ưu tiên nhập khẩu sản phẩm từ sữa Việt NamU.S. exports of dairy products to Vietnam have continually increased at the average growth rate of 19% during the period 2010 – 2014. Last year U.S. dairy export value reached $265 million, up 10% over 2013. Major U.S. dairy products exported to Vietnam include non –fat dry milk (65 - 70%) and whey (9%). The other dairy products like infant formula, drinking milk, yogurt, butter and cheese also find Vietnam a promising market as domestic production is relatively small, just meet 25 – 30% of the total market demand. However, it is necessary to notice that competition on dairy products in Vietnam is tough when other big players like France, New Zealand, Australia or The Netherlands are also spending great efforts to explore this growing market.Fresh FruitsFruits are an important part of the Vietnamese diet, and consumption of fresh fruits is high. Products such as Washington apples, table grapes, and pears have become increasingly popular in recent years. However, inadequate handling and distribution facilities (poor cold chain infrastructure) hinder greater sales of these products, which are sold at a premium over Chinese varieties and domestic varieties.Fierce competition between China, Australia, New Zealand, South Africa, and Chile for the Vietnam market has developed over the past five years. Moreover, under the ASEAN-China FTA, since January 1, 2012, exports of fresh fruits from these countries to Vietnam have also enjoyed a tariff rate of 0% , while a rate of 10% has been imposed to table-grapes, apples and pears imported from Most Favored Nations (including the U.S.).Ho Chi Minh City is the primary market for U.S. fresh fruits. Sales in Hanoi are rising as well, but the city’s small number of high-end markets, less frequent shipping links to major ports, and proximity to China (a major source of cheaper fruit) all constrict U.S. sales in Hanoi.Large quantities of pineapples, citrus fruit (oranges and limes), and table grapes (just developed recently) are grown locally and sold at very low prices during the harvest season. Some importers have reported some success selling California oranges against cheaper oranges and Clementine from China.U.S. exporters will need to convince consumers that their product quality is superior enough to justify the premium price.U.S. exports of fresh fruit (apples and grapes) were $54 million in 2013, and in 2014 they reached a new record of $74 million, an increase of 37 percent.Special note:Vietnam has accepted imports of table grapes, apples, cherries and pears from the USA. For other fresh fruits, especially new-to-market fruits, pest risk assessments (PRAs) need to be conducted by Vietnam’s Plant Protection Department in Hanoi, and it normally takes one to three years to complete a PRA. If you have questions about the PRA requirement, please contact FAS Vietnam.Snack FoodsGeneral demand for snack foods, especially chips, extruded snacks, chocolates, dried fruits, and nuts, is growing due to higher living standards and improving disposable incomes. American-made snack foods are extraordinarily popular with consumers who can afford them. Many shop owners, from street stalls to new mini-shops, report high turnover of snack products such as potato chips, nuts, biscuits and cookies. Several foreign companies have established factories and joint venture partnerships with Vietnamese confectioners. Pringles and Lay’s potato chips are very well received, particularly in Ho Chi Minh City and Hanoi. Hershey’s and M&M chocolates are popular in Vietnam. Foreign-invested snack manufacturers as well as local manufacturers have begun production in Vietnam.Snack foods have traditionally been subject to stiff import rates (ranging from 15 to 40%), especially as investment in domestic manufacturing increases. However, Vietnamese are consummate snackers and exporters should find a way to service this market with high-quality products.U.S. exports of snack foods to Vietnam strongly increased in 2014 with an export value of $9.8 million, a year-on-year increase of 61.9 percent.Canned Meat ProductsExports of canned meats (HS: 1602) to Vietnam strongly increased during the past 5 years. From a modest export value of about USD 17 million in 2009, exports of canned meats jumped to a record of USD 85.7 million in 2013, despite high import duty ranging from 30 to 40%. Hong Kong topped the list of canned meat exporters to Vietnam. In 2013, its export value reached USD 71 million, accounting for 83% of the total exports. U.S. canned meat exports to Vietnam had gone down from USD 6.3 million in 2010 to USD 2 million in 2013, but rebounded in 2014 with an exports of USD 7.1 million, up 254% over 2013.Tree NutsVietnamese consumers are more concerned about healthy products and food safety; they show greater attention to healthier foods. Their demand on food is more sophisticated in terms of quality and food safety. Higher prices for better quality and healthy foods are more acceptable to middle-class consumers.Vietnam boasts a large local supply of nuts, such as cashews and peanuts, which are increasingly finding lucrative markets abroad. This raises domestic prices and creates opportunities for imports of alternatives like U.S. pistachios, almonds, and other nuts. Marketing efforts to introduce premium natural nuts and nuts not grown in Vietnam could yield good results. Moreover, given the fast growing bakery industry in recent years, bakery demand for nuts and dried fruits is increasing.
U.S. exports of nuts to Vietnam in 2013 reached $263 million, an increase of 46.4% over 2012, and 7 times the value in 2009. Exports in 2014 continued rising to $286 million, a year-to-year increase of
17.4 percent. Current tariff for nuts range from 20 to 30 percent with the exception of 10 percent for in- shell walnuts.

Note: It is difficult to estimate the market size for imported nuts into Vietnam due to the fact that Vietnam is now becoming a trans-shipment point for nuts bound for neighboring countries.

Dried fruits
California raisins are becoming popular in Vietnam. These products are mainly sold as snack foods and as ingredients in the bakery industry. Tariff on raisins is now reduced from 17 percent to 13 percent.
U.S. exports of raisins to Vietnam were $5.6 million in 2013, up 13% over 2012. Export value in 2014 stood at the same level as that in 2013 (USD 5.56 million vs USD 5.6 million). A marketing strategy to promote raisins and other dried fruits (possibly cranberries) could reap great results here.