Organic food market faces shortage of customers

The organic food market is believed to have great potential, but companies are finding it difficult to lure more customers.

There are about 100 organic food producers, including large corporations, in the country. Investors have poured money into organic production as they believe that organic food will be the choice of customers in the future.

According to Pham Thi Hoa from the International University, a member school of the HCMC National University, there is little evidence that organic food provides more nutritious products than normal food, but consumers still prefer organic produce because they do not want to use GM (genetically modified) products and products with pesticide residue.

There is little evidence that organic food provides more nutritious products than normal food, but consumers still prefer organic produce because they do not want to use GM (genetically modified) products and products with pesticide residue.

Hoa cited a survey by Nielsen as saying that Vietnamese are among the group of consumers with highest social awareness in Asia Pacific. 86 percent of Vietnamese polled said they are willing to spend more money on products and services which have positive impact on the society and environment, higher than the average level of 76 percent in the region.

Nielsen estimated that the total value of the Hanoi and HCMC organic food markets is VND400 billion.

“Organic products are in high demand and short supply in the domestic market and this is a great opportunity for anyone to organize the production of organic food,” Hoa commented.

High prices

Dinh Xuan Thu, director of Thu Thuy Green Farm in Dak Nong province, said the organic food market has great potential for development, but everyone has to pay a heavy price to join the market. The price for Thu, for example, is multiple billions of dong.

Thu said his red organic pepper is selling very well despite the high price of VND250,000 per kilogram, or five times higher than normal pepper. Thu Thuy once had 2 hectares of organic vegetables in greenhouses, but the vegetables did not sell well in the market because of high prices.

Later, it shifted to farming strawberries and tomatoes to provide to Japanese supermarkets and have a stable revenue.

“The lesson is that you need to define markets and targeted customers before you begin production, or you will have to pay a heavy price,” he said.

Organica was the first company to own tropical vegetable farms meeting US and EU standards in producing organic food. However, certificates are not enough to sell goods.

“Customers still doubt the origin of products, though we have certificates about meeting US and EU standards,” she explained.

According to the Control Union, in 2017, the global organic food market had value of $92 billion and is expecting an annual growth rate of 5-10 percent per annum.