Food industry changes drastically amid pandemic

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Delegates look atproducts introduced on the sidelines of the opening ceremony of Vietnam Foodexpo 2020. Photo: N.H

Businesses take the initiative

The “shock” of the Covid-19 pandemic has a great impact on the Vietnamese food industry. The supply chain of raw materials has been "broken", domestic consumption has decreased, export orders have been canceled or sharply reduced, logistics activities and freight transportation have stalled and become congested at ports; goods and capital flows have been insufficient or stagnant in warehouses.

Meanwhile, businesses still have to maintain maximum social responsibility, causing many businesses to suffer difficulties and great pressure during the Covid-19 pandemic. In addition, changes in consumer behavior also have conflicting effects on Vietnamese food businesses, requiring businesses to have appropriate change and response strategies.

At the Vietnam Food Forum 2020 held on December 9, Mr. Nguyen Manh Hung, Vice President and General Director of Nafoods Group Joint Stock Company, said that when Covid-19 pandemic started, Nafoods faced a series of difficulties because fresh fruit exports have been delayed and they must be taken back for processing. In major export markets, a series of orders have been delayed and canceled, cash flow has been slow because customers have not yet paid, while banks have not yet supported them, but the company still has to buy agricultural products from farmers under signedcontracts.

“The most difficult thing is in logistics, we export fresh fruit to the EU by airway at the freight of US$3/kg, but when the pandemic started, the freight doubled and even sometimes we cannot export, the sea freight increases by 40-50%, recently the empty containers have been in shortage for export.”

In this difficult period, Nafoods gradually adapted and looked for opportunities. The first is to make use of raw materials for production and increase online activities to find customers, and change the management system. In particular, Hung said, during the pandemic, the company has cut costs, thereby maintaining growth over the same period last year.

In particular, many value-added products of Nafoods are sold well online. Typically, air dried products are bought a lot in Russia and in Russian-speaking markets. Specifically, Nafoods exports up to 25 containers of products each month.

Innovate support solutions

Besides the initiative of businesses, State agencies have also made efforts to change support activities during the pandemic. Mr. Vu Ba Phu, Director of Department of Trade Promotion under the Ministry of Industry and Trade, said that due to the impact of the pandemic, about 80% of trade promotion activities in 2020 had to be canceled. Facing this situation, departments under the Ministry of Industry and Trade have quickly looked fornew solutions to support businesses.

Accordingly, the Department of Trade Promotion has gathered and sent a list of domestic products and exporters to counselors in the countries and foreign representative offices to directly work with importers. This has partly helped to re-establish links between Vietnamese exporters and foreign importers.

Phu added that the department has created digital platforms to support trade promotion activities. Since May 2020, nearly 1,000 online trade conferences have been held.

In particular, the Ministry of Industry and Trade and the Department of Trade Promotionhave built and tested five platforms to support businesses and trade promotion, including a global customer data management system which is connected with the counselor system with localities across the country; conducted traceability and trade promotion.

“All these platforms have been completed in a trade promotion ecosystem, which is expected to be announced and put into use in early 2021. The application of information technology will help save costs for businesses in trade promotion activities, brand promotion, and shortening the gap between manufacturers, suppliers and the market,” Phu said.