At 6am every day, 65-year-old Ms. Nguyen Thi Lanh wakes up and goes to the local wet market to buy recently slaughtered, still-warm pork. She is one of 98 per cent of Vietnamese housewives that believe warm pork sold in wet markets in the early morning is the freshest available, despite it being quite difficult to control food hygiene and safety. 

Only recently have people like Ms. Lanh had the opportunity to buy safe, clean meat, at the Masan Group’s Meat Deli, when the group’s Masan Nutri-Science Corporation (MNS) officially opened the MNS Meat Processing Complex at the Dong Van IV Industrial Park in northern Ha Nam province on December 23.

Meat market revolution

The complex strictly selects healthy pig breeds and applies closed pig raising technology according to world standards, minimizing the impact of hot weather in summer and the winter cold on the breeding process. It also applies Global GAP standards and a food traceability system to provide pork products that are safe, antibiotic-free, and without lean substances, and that comply with strict controls on disease and biosecurity.

Attending the opening ceremony, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the opening is important and contributes to the development of the country’s meat industry in particular and agriculture in general. 

Masan leaders said that this revolution in Vietnam will help local consumers have better living standards and it spent five years on preparations. “Meat Deli was launched first in Hanoi and we believe that the capital is our starting point and will look to take it nationwide in the near future,” said Mr. Nguyen Dang Quang, Chairman and CEO of the Masan Group. 

Mr. Quang has seen a shift to chilled meat over time in developing countries, even in neighboring countries where he has worked during his career, such as Indonesia, Thailand, and the Philippines. “I think this trend will take hold in Vietnam,” he said. “We are the pioneer in introducing fresh chilled meat to the market under a full meat value chain.” 

Mr. Nguyen Van Nga, Director of business consultants the Agrocom Vietnam Company, told VET that some producers distribute chilled meat, such as DnF, CJ Foods, Vissan, Mavin, and Masan. 

“Great opportunities present themselves for Vietnamese meat producers who can satisfy international standards in processing and transport with a fully closed cool supply chain,” said Mr. David John Whitehead, Chairman of the Mavin Group. Mavin invested $8 million in building a sophisticated meat processing plant in northern Ha Nam province, with a full production capacity of 10,000 tons of sausages, ham, and cold cuts each year. Since 2012, the company has invested in swine genetics, with the establishment of a center in northern Hung Yen province. It also established the Mavin Foods Joint Venture Company with the goal of providing high quality, safe, and hygienic meat products.

Growth in livestock husbandry has continually been high over recent years, averaging 5-6 per cent annually, according to the latest report from MARD’s Department of Livestock Production, released in January. In 2018, pork output was estimated at 3.81 million tons, up 2.2 per cent compared to 2017. On average, just under 300,000 tons of pork is consumed in Vietnam each month and demand is increasing at 6-8 per cent per year.

Vietnam is on the path to restructuring agricultural commodity industries, ensuring the application of modern technology from farming to processing and market organization to create clean products with competitive prices, according to MARD. This is also an opportunity for major companies like Masan and Mavin. 

Ambitious goals

According to the Paris-headquartered Ipsos Business Consulting (IBC), in 2019 Vietnamese consumers are estimated to consume about 4.5 million tons of meat, an increase of 30 per cent compared to 2013. 

GDP growth is forecast at over 7 per cent in 2019, according to Mr. Nga, which indicates consumption power will develop and consumers will change their shopping behaviors. “We predict that chilled meat will gain in popularity in Vietnam in the long run, especially among high-end restaurants, hotels, and supermarkets,” said Mr. Stanley Ng., Sales Manager at the Cargill Protein Group in Hong Kong and Vietnam.

Mr. Whitehead also sees a growing percentage of chilled meat being provided by Vietnam-based enterprises operating under international quality standards and with a closed integrated supply chain and modern procedures based on advanced technology. At this moment, Mavin is improving its production capacity and modern slaughtering technology, and will diversify products from its closed farming system. “We believe changes in customer behavior and penetration by more and more Vietnamese producers will soon generate fierce competition,” he said. Mavin targets becoming among the top 3 in terms of processed food and meat production in Vietnam’s north in the next five years, with 5,000 tons of chilled meat per year.

Masan is aiming for a double-digit market share in Hanoi’s fresh meat market by the end of this year and is preparing for its entry into markets in the south. “We expect Vietnam will be like emerging countries such as Thailand, Indonesia and the Philippines, and shift away from warm meat to the safer alternative - chilled meat,” Mr. Quang said. “We aim to capture a 10 per cent market share in the pork market, worth up to $10.2 billion, by 2022.”

Matters to address

Mr. Ng. believes the chilled meat market will only grow as expected in Vietnam once cold chain management, including chilled storage facilities, refrigerated trucks, and proper handling, is improved to ensure consistent product temperatures during delivery and storage. Chilled meat is preserved by chilling it at no more than 7°C immediately after slaughter. It is not only safer to consume but also offers a fresher taste thanks to a process called ageing, which allows the meat to age in its own juices. 

The challenge for local producers is how to strictly control the total chain from genetics to feed and from farm to processing. It is important that processing, packaging, transport, and final distribution take place under the ideal temperature range of 0-4°C. Only then will the meat be truly safe, fresh and delicious, according to Mr. Nga.

Another is gaining the trust of Vietnamese consumers, as chilled meat remains a new concept for most. Mr. Nga believes producers should consider introduction consumption programs to educate consumers on the benefits chilled meat provide for the health, and provide products with traceability. 

There is also fierce competition on the way from imported meat companies in member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will put pressure on local producers hoping to secure healthy market shares. “We can together change consumer habits and expand markets, bringing healthy, clean and delicious chilled meat to consumers,” said Mr. Quang. “But there remain many things to do.”

VN Economic Times