Strategies to Build Value for Vietnam Tea

In a quest to be more competitive with their tea exports, officials in Vietnam are encouraging a new focus on fair trade certification.

THAI NGUYEN, VIETNAM-  FEB 24: People pick tea leaf on agricultural plantation, tea leave is good, healthy drink, picker working at day, carry basket, pick green leaf to harvest, Vietnam, Feb 24, 2014

Vietnam tea farm, © xuanhuongho

Although it stands in the top five tea producers globally, Vietnam has seen lower exports in the early part of 2015, sending out 6.7% less in volume than the first half of last year. This translated to 4.1% less tea income, the equivalent of about $90 million.

While Vietnam has exported on a massive scale, it has largely been unbranded tea which has brought low prices as a result. The head of the Viet Nam Tea Association, Hoang Vinh Long, argues that the country needs to focus on creating a brand identity or establishing products that can be exported directly to customers in order to build value. There will have to be more efforts with investing in processing and better tea growing strategies. He believes that pursuing Fairtrade International certification will help growers achieve some of these goals, while also using the labeling to make them more competitive.

Only two producers in Vietnam, Bac Ha Investment and Development Company Limited and Shan Tea Cooperative are currently certified by Fairtrade International.

Finding capital to finance improvements will provide a steep hurdle to pursuing certification.

SOURCE: Vietnam News