As an developing country, it does not come as a surprise that Vietnam faces many challenges related to cold chain. The whole concept is even totally unknown to a considerable part of the population and even food professionals.
This lack of awareness have catastrophic effects regarding food losses, it is estimated that Vietnam loses 30 to 40% of their fruit and vegetable production because of improper storage or transportation condition.
Public health is also at stake, Vietnam suffers daily from mass food poisoning cases at home, in offices, schools and factories having both an economic (lost workdays…) and public health consequences on the short and long term.
Fortunately, the situation is evolving fast.
The rising urban middle class coupled to the arrival of major global retailers have a positive impact on Vietnamese cold chain standards and general control.
The government is also playing role in the fight for safer food in Vietnam, as the recent creation of a food safety department in Ho Chi Minh City shows.
Foreign technology and service providers can expect plenty of business opportunities in the future in this industry for companies specialized in (service or material provider) the cold chain industry.
Let’s see first what are the main challenges and opportunities in the cold chain industry.
What challenges Vietnam is facing regarding cold chain
- Vietnam is a country used to eat fresh food, frozen food has been before very rare.
- Lack of infrastructure
- Poor roads
- Obsolete vehicle fleet
- Lack of storage space
- Most facilities are used by the seafood export industry, which leaves few room for domestic products
- Cold chain importance awareness missing from Vietnamese management and employees
- Fragmented market in the North
- Broken Cold chain during
- Last kilometer
Who will play a role in the future ?
There are 6 main players involved in Vietnam´s cold chain improvements:
- Set higher standards
- Enforce regulation
- The urban middles class
- Better educated
- More affluent
- Food safety growing as a major concern
- Safety as added value for consumers
- Fear of destructive scandal for their brands
Cold Chain equipment supplier
Offer new innovative solutions adapted to the Vietnamese environment and fast growing retail market.
Cold chain operator
- Best practices
- High requirement regarding safety standards
- Bringing foreign know-how to the sector
- As for manufacturers, product safety is growing as a major value proposition
Business opportunities in Vietnamese cold chain industry
- Cold storage demand in Vietnam is growing fast
- 90% occupancy rate.
- Cold storage have multiplied by 4 since 2007
- Entry of major retailers will increase cold chain awareness and push for higher standards by improving:
- Workforce training
- The new urban middle class is more sensible to food safety risks, they want to keep themselves and especially their children safe from potentially harmful products.
- According to our discussion with several retail and F&B professionals, frozen foods will be the next food & beverage boom in Vietnam.
- As of today, old storage opportunities are mainly located in the south, the northern market is way more fragmented and difficult to handle.
- The general need for more efficient storage and transport solutions
- Main players in the cold chain industry:
- Japan (Nippon Express, Newland Vietnam)