Exporting spices – A challenging opportunity for Vietnamese businesses

Vietnam is a country with advantages in geography, climate and biodiversity. That explains why many precious and quality spices with unique flavors that are different from similar products in the world are produced from this particular country. For those reasons, the spice export industry has been considered as a potential export industry of Vietnam. However, to further develop the industry, businesses need to have acumen and advantages in exporting spices to the international market.

1. Learn about the importance of spice export

According to the World Spice Association (WSSA), there are currently about 109 spices used worldwide. Each country and each region creates its own type of spice, making culinary diversity for each region.

Currently, Vietnam is on the path to integration. The need to bring Vietnamese spices to the international market has been expanding to help farmers enhance their quality of life.

According to a report by Transparency Market Research (TMR), the global spice market value is estimated to reach 16.6 billion USD in 2019 and is expected to reach 22.8 billion USD by 2027, growing at a CAGR of about 4% in the period 2019-2027. According to statistics from the General Department of Customs, Vietnam’s spice export turnover as of November 2022 is estimated to reach 1.4 billion USD, up 16% over the same period last year. .

Of which, pepper export turnover is estimated at 911.1 million USD, an increase of 22%; Cinnamon is estimated at 267.5 million USD, up 15%; estimated to reach 115 million USD, an increase of 9%2. It is forecast that the entire Vietnamese spice industry in 2022 will reach around 1.5 billion USD.

It can be seen that exporting spices to the international market not only generates income for businesses and farmers but also promotes the image of Vietnam to the international market. Currently, Vietnamese spice products are present in 150 countries and territories around the world, notably the EU, US, Japan…

2. Benefits of exporting spices for Vietnamese businesses

In addition to the variety of types and the availability of substantial quantities of spices, there are many other benefits for businesses to develop this field such as:

Increase revenue and profits

Vietnamese spices are considered to have their own distinctive flavor that is not identical with other countries. Along with that, it can accommodate large quantities so that Vietnamese spices can easily access potential markets around the world. Products with high prices help businesses increase revenue and profits from export activities.

Take advantage of free trade agreements

Vietnam has currently signed and implemented many important free trade agreements (FTAs) such as EVFTA, CPTPP, RCEP… These FTAs ​​will help Vietnamese businesses enjoy tariff incentives when exporting spices to Vietnam. member markets. Thanks to that, businesses will save production costs and achieve a better competitive position in the international market.

High quality and safe products

To successfully export spices, businesses need to ensure product quality and safety according to the standards of the import market. In addition, businesses need to prepare quality management systems such as: ISO, HACCP, GAP. And certified by reputable organizations such as USDA, EU Organic, Fairtrade, FDA.

Businesses also need to pay attention to controlling pesticide residues, heavy metals, and artificial colors in spice products.

Market diversity

Domestic businesses need to exploit and expand potential markets such as Africa, the Middle East, and Latin America in addition to traditional markets such as the EU, US, and China.

Expanding the market helps businesses to widen choices when reaching the international market.

3. Summary of popular Vietnamese export spices today

According to statistics, Vietnam has more than 50 types of spices being exported today. Below are some of the industry’s main export spices in recent years. Specifically:

Pepper

 

Vietnamese pepper has high quality, rich flavor, and beautiful color. This is a product widely used in cuisine and medicine. Pepper is grown massively in the Central Highlands and Southeast regions.

There are many types of exported pepper, such as: whole black pepper, whole white pepper, ground pepper, green pepper, red pepper, pickled pepper… Currently, Vietnamese pepper is exported to many countries around the world, for example: Asia accounts for 50%, Americas 21%, EU 20%, Africa 7%

Cinnamon

Cinnamon belongs to a group of herbs with a bitter-sweet taste, aroma and warm features. Cinnamon has many different effects such as stimulating blood circulation, reducing blood sugar, reducing cholesterol, and anti-oxidation. Vietnam is currently one of the largest cinnamon exporting countries in the world. Vietnam’s cinnamon export turnover as of May 2023 is estimated to reach 260.9 million USD, up 15% over the same period last year.

Cinnamon is exported in many forms such as powdered cinnamon, split cinnamon, fluted cinnamon… The main markets of this product are the US, India, Japan, Korea etc.

Anise

Next is the anise spice which is exported quite a lot. Vietnamese star anise is considered to have high quality, unique flavor, and rich in essential oils. Some types of anise exported from Vietnam include: whole anise, powdered anise, and oil anise. According to Vietnam’s statistics, the return in 2023 will reach 115 million USD, an increase of 17% over the same period last year.

Ginger

Ginger has the effect of stimulating digestion, reducing nausea, reducing arthritis, preventing colds etc. Therefore, ginger is imported by many countries with cold winters such as China, Korea, Japan, EU… Export turnover of Vietnam’s ginger export 2023 is estimated to reach 25.8 million USD. Vietnam’s exported ginger types include: fresh ginger, dried ginger, and powdered ginger.

Turmeric

Turmeric spice and turmeric starch are one of the key products of the Vietnamese food processing industry. According to data from the General Department of Customs, Vietnam’s turmeric starch export turnover reached 9.8 million USD in the first 9 months of 2023, an increase of 15% over the same period in 2022. Vietnam’s main export markets are America, Japan, Korea, Taiwan and European countries.

4. Review potential consumer markets and spice export opportunities

There are three major markets that businesses need to pay attention to when exporting spices, which consist of European market, Asian market and North American market

• European market: The EU is the world’s largest spice consumption market, accounting for about 40% of the total global spice import value. The EU has high demand for deeply processed spices, organic spices, mixed spices… The largest spice importing countries in the EU are Germany, England, France, the Netherlands… Vietnam has signed and put into effect the Vietnam – EU Free Trade Agreement (EVFTA) from August 2020, opening up opportunities for Vietnamese businesses to enjoy tariff incentives when bringing spices to the EU.
• North American market: This is the world’s second largest spice consumption market, accounting for about 20% of the total global spice import value. This region has high demand for spices with quality, safety and sustainability certifications such as USDA Organic, Fairtrade, Rainforest Alliance… The main spices imported from the US are pepper, cinnamon, ginger, chili…North America is also one of the major markets that Vietnam is targeting in the industry.
• Asian market: It includes countries such as China, India, etc. This is a market with large spice consumption, with the main imported spices being pepper, cinnamon, anise, ginger, etc. .

5. Success factors and industry strategies

Understanding customer needs and trends is insufficient to succeed since businesses need to take steps to analyze the market, classify customers and determine goals to position spice products accordingly.

Businesses need to create good quality shipments of Vietnamese spices, ensure food safety and comply with import market regulations. Only then will the goods be cleared through customs and establish credibility with importing countries.

Businesses need to raise awareness of industry regulations and import markets, especially new or changing regulations. In addition, it is generally essential to monitor and continuously update information from accurate and reputable sources from official websites so that all necessary knowledge can be prepared to adapt with the needs of customers in a straightforward and optimized way.

6. Summary

Through the article, it can be affirmed that spice export is an industry with great export potential in Vietnam, making it an important contribution to the country’s socio-economic development. Vietnamese businesses and farmers need to connect to improve product quality, diversify products and markets, please consider Viet Linh as we have been a business connecting international partners with large spice gardens in Vietnam. Customers are in need of cooperation, please contact us using the information below for the best support.

• Address: LK07-C14 Ministry of National Defense, Bui Xuong Trach Street, Hoang Mai District, Hanoi, Vietnam
• Phone: 0345.128.188
• Fax: (02).432.099.006
• Email: sales@vietlinhagrimex.vn