Food exportation currently ranks as one of the most profitable businesses in Vietnam. This owes to the country's ever-growing agricultural industry. However, one of the challenges you will face is choosing the right products to export. Ever wondered what the best food or beverage product that you can make and then export globally is? We highlight the 5 best-made in Vietnam food & beverage products you can export for a profitable business. We also cover the export regulations that can guide you in making pre-informed decisions.
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Vietnam is a country with a 94 million population. The Southeast Asia country has invested thirty years of continuous development in improving its economic landscape. Similarly, they have experienced an increased standard of living and considerable economic growth. Moreover, Vietnam has joined the ranks of the nation's lower-middle-income economies as one of the fastest developing economies in Southeast Asia. It currently boasts an increasing Gross Domestic Product (GDP) of around 6-7% yearly. The gross domestic product per capita stood at $2400 in 2017, and it's projected to reach $10,000 in 2035.
According to reports, Vietnam ranks 1st when it comes to producing and exporting different kinds of food and beverage products. These include vegetables and fruits, dairy products, coffee, meat, and seafood.
Vietnam's food and beverage sector hold an enormous portion of the country's gross domestic product. However, the whole food and sales will rise at an annual rate of 11.3%1 around 2017-2021.
Despite the meteoric rise, the growth of Vietnam's economy declined in 2020, according to the evaluation of Euromonitor2. However, with the global economy recovering from the pang of the pandemic, Vietnam's export is peaking at a high pace again. Moreover, low sound fiscal agreements and numbers of infections contribute to the fast growth of the economy. The actual gross domestic product increase will be about 7.5% at the end of 2021.
Vietnam’s exportation covers a wide range of food items. However, coffee, milk, and seafood account for about 40% of the whole food and beverage exports industry. Rising incomes and private credit development should increase the value of personal consumption. If you are looking for a smart way to make a reasonable income by exporting food and beverage products in Vietnam, the time is now!
We have reviewed data on food consumption and exportation in Vietnam. We present to you the five best food and beverage products exported globally in the Asian food hub.
Let's take a quick look:
The dairy product in Vietnam is worth $4.1 billion. Also, it has been rising in the last five years with a Compound Annual Growth Rate (CAGR) of more than 16.6%. The significant factors for this development include:
Compared to Singapore or Thailand, the average consumption of dairy products is low, with about 26 liters per capita.
Eight top companies3, such as Nutifood Binh Duong, IDP, Nestle Vietnam, Quang Ngai sugar company, Vinamilk, and FrieslandCampina, make up 90% of the beverage market sector. Friesland Campina, Vibamilk, and TH milk, several companies are manufacturing organic milk brands due to an increase in milk consumption.
In the previous eight years, the import value of dairy products in Vietnam stood above $800 million. This makes the country one of the leading exporters of dairy products in Southeast Asia.
According to Vinamilk, about 30% of milk production can meet the local supply of raw materials.
In contrast, the remaining raw material is from other countries. In the meantime, the export value of Vietnam in exporting yogurt and other dairy products was above $300 million in 2017.
Vietnam is ranked third in the countries exporting seafood in the world, after China and Norway. The country provides job opportunities for more than eight million citizens and exports seafood4 worth $5.8 billion. The country has more than two thousand miles of coastline that stretches from the north to the south. This provides Vietnam with a wide variety of fishing spots. Besides, Vietnam has a considerable quantity of farms established inland and, in the ocean, involved in aquaculture5.
Fruits and vegetable cultivation and processing is known as the most successful sub-sector of agricultural products in Vietnam. In recent years, the country's export value shows a quick rise of 43% in 2017 compared to 32.7% in 2011-2016. Export of vegetables handles 20%, while the fruits are responsible for the remaining 80%. Vegetables and fruits export value in 2018 is about $3.8 billion, and in 2017, $3.5 billion and exported to about 150 countries globally.
Though Vietnam is one of the largest exporters of coffee globally in Southeast Asia, it is second only to Brazil, the world's largest exporter. The highlands of central Vietnam are suitable for cultivating various coffee beans called the robust strain6 of coffee. Although the citizens consume a lot in the production, there is still enough for exportation globally. The quantity of coffee exported in 2012 amounts up to 1.3 million tons. Most of the coffee exported are robusta beans, which are of lower quality compared to arabica beans. Besides, coffee farmers in Vietnam are focusing on the unique coffee market and improving the quality of the cultivated beans. This makes Vietnam-made coffee more appealing to the global market.
Meat production is associated with development, increasing incomes, and increasing population. Thus, the rate of consumption of meat has grown considerably globally in the past ten years. In Vietnam, the meat product keeps rising to reach 4 million tons in 2019 and increase by 3-5% per year. Meat products such as chicken, frozen beef, bovine, and pork consumption, increase as more people adjust their eating habits.
Production of pork accounts for a significant part of fresh meat exported. This is followed by chicken, veal, beef, goat, and lamb. In comparison, poultry accounts for the most extensive improvement operation at 7%, before the lamb, goat, veal, and beef. The primary source of pork in Vietnam is from private commercial farmers.
Vietnam is among the six leading developing countries with the highest meat consumption globally. At the same time, the total meat supply is to rise by 1-3% annually, leaving the opportunity for exportation.
These are the top five foods you should consider exporting in Vietnam.
Every country has its export regulations exporters need to take note of. This session highlights the regulations you must abide by when exporting food products from Vietnam.
Exporting in Vietnam does not require that you own a company to have an export license. That means you can start an export business without having a trading company. But, to begin export trading, an investor must register with the DPI, known as the department of planning and investment.
However, investors who want to start an export business in Vietnam must get an investment certificate. Companies interested in getting involved with export are required to follow specific steps to change their investment certificates.
On circular 34/2013/TT-BCT, there are certain products investors cannot export from the country. Products prohibited for export include petroleum oil. Particular products need the export company to get export permits from the regulating agency, according to Appendix II of Decree 187/2013/ND-CP. These goods include:
All exports need to be inspected by the necessary regulating agencies before clearing customs. Also, exporters must obey the essential government regulations on quality requirements, quarantine, and food safety.
Unsurprisingly, Vietnam has become investor-friendly in present years when talking about the financial and regulatory incentives. This is because its export agency has taken measures like raising the workforce quality, developing the financial sector, and streamlining trading regulations.
Export duties applied to food and beverage products depends on:
Goods exempted from export duties include:
Nearly all services and products exported abroad are cleared from tax duties. Thus, tax duties are only applicable to some products. Natural resources like scrap metal, minerals, and forest materials are examples. You must also note statements of export duties needed to register customs laws in the customs agency. Also, there is a limit of thirty days for the payment of export duties after customs registration. Based on the trading conditions in Vietnam, many kinds of export duties are imposed on products.
Requirements for exporting vary based on the destination and product involved. The Vietnamese regulating agency provides:
Only specific products are accountable for export tax and VAT (VAT on exported products is 0). Taxes applicable to exports range from 0% to 45%.
Furthermore, the Law on Special Consumption Tax (SCT) states that any exporting agency involved with tax-applicable products for exports must follow SCT, while the exporters who trade goods locally are not. The payable tax rate of exported products is indicated for every commodity in the export tariff. The Ministry of Finance will release the latest circulars to complement or renew the former ones whenever there is any change in the tax tariff.
Here are a few frequently asked questions on exports by some of our readers:
The applicable export tax rate is equal to the unit quantity of each exported product. It is calculated by multiplying the tax rate of every product and tax calculation cost, which is located in the tariff for calculating tax. These can be found in the customs declarations.
Documents needed for exporting depend on the goods exported from the country. Whether unilateral, bilateral, or multilateral trade agreements and other business policies of the Vietnam regulating agency. The export documents required in the country depend on the trading policy of Vietnam. Certain products from Vietnam, like food products and the nature of the food products, such as dangerous products, general goods, livestock, and personal effects, also determine the document requirement.
Yes, the documentation procedures to export products in every country are identical. The WTO countries in every region regulate licenses and certificates needed for export.
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