EXPORTING SPICES - OPPORTUNITIES AND CHALLENGES FOR VIETNAMESE ENTERPRISES:

As a country with advantages in geography, climate and biodiversity. Vietnam produces many precious spices, quality with distinctive flavors different from similar products in the world. For these reasons, the spice export industry has been and is a potential export industry of Vietnam. However, to develop the industry further, businesses need to have the acumen and advantages in exporting spices to the international market.

1. Learn about the importance of spice exports 

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

Currently, Vietnam is on the way to integration, the need to bring Vietnamese spices to the international market has been expanding, helping farmers improve their quality of life.

According to a report by Transparency Market Research (TMR), the global spice market value is estimated at 16.6 billion USD in 2019 and is expected to reach 22.8 billion USD in 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 at 1.4 billion USD, up 16% over the same period last year.

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

It can be seen that exporting spices to international markets not only helps increase income for businesses and farmers but also promotes the image of Vietnam to the international market. Currently, Vietnamese spices are present in 150 countries and territories around the world, typically the EU, the US, Japan, etc.

2. Benefits of exporting spices for Vietnamese businesses

In addition to the variety of types and quantities of spices always available. There are many other benefits for businesses to develop this field such as:

Increase revenue and profits

Vietnamese spices are considered to have a unique flavor that cannot be confused with other countries. Along with that, they can meet large quantities. Therefore, Vietnamese spices can easily access potential markets around the world. High-priced products help businesses increase revenue and profits from export activities.

Take advantage of free trade agreements

Vietnam has signed and implemented many important free trade agreements (FTAs) such as EVFTA, CPTPP, RCEP... These FTAs ​​will help Vietnamese enterprises enjoy tariff incentives when exporting spices to member markets. Thanks to that, enterprises will save production costs and be highly competitive 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 have certifications from 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 enterprises 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, the US, and China.

Expanding the market helps businesses have more choices when exporting this product to the international market.

3. Summary of popular Vietnamese spices exported today

According to statistics, Vietnam currently exports more than 50 types of spices. Below are some of the main spices exported by the industry in recent years. Specifically:

PEPPER

Vietnamese pepper is of high quality, rich in flavor, and beautiful in color. This product is widely used in cuisine and medicine. Pepper is grown a lot 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 such as: Asia accounts for 50% of the proportion, America 21%, EU 20%, Africa 7%.

CINNAMON

Cinnamon belongs to the group of herbs with a sweet and bitter taste, aromatic smell and warm properties. 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 February 2023 is estimated at 260.9 million USD, an increase of 15% over the same period last year.

Cinnamon is exported in many forms such as cinnamon powder, split cinnamon, cinnamon sticks... Main markets are the US, India, Japan, Korea...

STAR ANISE

Next is the spice anise which is exported quite a lot. Vietnamese anise is considered to be of high quality, with a characteristic flavor and rich in essential oils. Types of anise exported from Vietnam include: whole anise, anise powder, and anise oil. According to statistics, Vietnam's anise in 2023 reached 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... Therefore, ginger is imported by many countries with cold winters such as: China, Korea, Japan, EU... Vietnam's ginger export turnover in 2023 is estimated at 25.8 million USD. Types of ginger exported from Vietnam include: fresh ginger, dried ginger, powdered ginger.

Turmeric

Turmeric spice and turmeric starch are among the key products of Vietnam's food processing industry. According to the General Department of Customs, Vietnam's turmeric starch export turnover reached 9.8 million USD in the first 9 months of 2023, up 15% over the same period in 2022. Vietnam's main export markets are the US, Japan, South Korea, Taiwan and European countries.

4. Review potential consumption markets and opportunities for spice exports

There are three major markets that businesses need to pay attention to when exporting spices. These include the European market, the Asian market and the North American market.

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

5. Industry success factors and strategies 

To understand customer needs and trends, businesses need to analyze the market, classify customers and determine targets to position spice products appropriately.

Businesses need to produce high-quality Vietnamese spice shipments that ensure food safety and comply with import market regulations. Only then can goods be cleared through customs and build credibility in your country.

Businesses need to raise awareness and regulations on the industry, import markets, especially new regulations or changes. In addition, monitor and continuously update information from accurate and reputable sources from official websites. Prepare all knowledge to meet the needs in the simplest and most optimal way.

6. Summary

Through the article, it can be affirmed that spice export is an industry with great export potential of Vietnam, contributing significantly to the socio-economic development of the country. Vietnamese enterprises and farmers need to connect to improve product quality, diversify products and markets.