Tea exports: Need to build brand

Vietnam is in the top five countries for tea export output in the world, but the export of tea is quite uncertain, and can not conquer difficult markets. Therefore, it needs to change and gradually create a brand for this industry.

Poor quality and lack of brand names are factors that reduce the value of tea exports. Photo: N.Thanh.

Reduce both quantity and value

According to the Department of Agricultural Product Processing and Market Development (MARD), from the beginning of 2018 to the end of July 2018, tea exports were estimated at 67 thousand tons, equivalent to $US 109 million, a decrease of 12.9% in volume and 9.3% in value over the same period last year. The main import markets for tea in the first half of 2018 included Pakistan (32.8%), Taiwan (13.8%), Russia (12.1%), China (7.9%).

The representative of the Department of Processing and Market Development said: The highlight of tea export over time is the resurgence of the Pakistan market - Vietnam’s largest tea import. Specifically, tea exports to Pakistan in June 2018 increased by 62.6% compared to May 2018, and 62.5% compared to June 2017. Thus, the cumulative tea exports in the first 6 months of 2018 to the Pakistan market increased by 1.3 thousand tons (equivalent to 10.9%) over the same period in 2017. The markets having strong growth in the first half of 2018 included Taiwan (an increase of 6.7%), the United States (an increase of 14.9%) and China (an increase of 7.9%). In addition to these markets, the most notable point in tea exports from the beginning of 2018 is a strong growth in the emerging market of the Philippines. The tea export to the Philippines in the first 6 months of 2018 increased by 8.4 times in volume and 21.7 times in value.

Despite the prosperity in some export markets and there is even the sudden export growth in the Philippines market, why did the volume and value of exports in the first 7 months of 2018 decrease compared to the same period last year? In response to this question, the representative of the Department of Processing and Market Development analyzed that the growth from these markets was not enough to offset the continual decline in other major markets. Specifically, in the first half of 2018, tea exports to Russia - the second largest market of tea export in Vietnam, accounted for 13% of market share, a decrease of 1.23 thousand tons (equivalent to 14.3%). Tea exports to the United Arab Emirates decreased by 1.19 thousand tons (57.0%) and Indonesia decreased by 427 tons (8.7%) compared to the same period in 2017.

In fact, in many recent years, although Vietnam is in the countries with the largest tea production in the world, Vietnamese tea has never asserted its position in line with potentiality of the country. Vietnamese tea is mainly exported in raw form with a low value added. In terms of market, most tea exports are mainly to the easy markets, instead of penetrating into the fastidious markets such as the EU, the United States, Japan. Mr. Nguyen Quoc Toan, the Director of the Department of Processing and Market Development said that due to the lack of brand names, low-quality products, Vietnamese tea lacks competitiveness, so it can not affirm its position in the international market.

Focus on brand building

Ms. Nguyen Thi Anh Hong, Vice president of the Vietnam Tea Association said that Vietnamese tea producers were still well-known to international customers with the ability to supply large volumes of medium quality products. In order to penetrate the fastidious markets and increase the value of tea export, it is important that the tea products must meet the standards, quality and safety, meet the standards set by the exporting countries. Changing image is a great challenge not only for manufacturing enterprises and exporters but also for the whole tea industry.

Some experts pointed out: To be outstanding in the international market, Vietnamese tea producers need to build the brand. This process of branding should be noted for both raw and processed tea. For example, for exporters of raw materials, enterprises should focus on building brand names. Tea exporters need to ensure the image of professional partners in the international market.

With packaged tea products, exporting finished products with the Vietnamese brand to the international consumers is a long way off, which requires the effort, investment funds of export enterprises as well as the whole supply chain. In particular, the key is to have serious investment, good management for the problem of fertilizer residues and pesticides in tea production. When there are good materials with quality assurance and food hygiene and safety, processing enterprises and exporters need to meet the standard of production technology to create quality products with beautiful packaging suitable for the consumer culture of each export market.