Three brands now dominate and competition will grow once TPP comes into effect.
Vietnam’s food market is seeing increasingly fierce competition between sausage manufacturers, including famous brand names such as VISSAN, Duc Viet and CPV.
VISSAN is now the leading company in providing packaged sausages, holding a 65 per cent share of the domestic market and its sausages are also exported to Laos and Cambodia. As at early March its products were available in 223 supermarkets, 703 convenience stores, 59 showrooms and a wide range of distributors and agents in Vietnam.
Duc Viet, meanwhile, was the first company to produce and trade German-style sausages from Vietnamese materials. Over the years its sausages have become popular among Vietnamese and have gradually solidified their position in the market.
Although VISSAN and Duc Viet are the major producers they still face stiff competition from heavyweight opponents including the C.P. Viet Nam Livestock Breeding Joint Stock Company (CPV), who supply both packaged and fresh sausages.
CPV is a pioneer in researching and successfully applying the self-contained production chain called the Feed-Farm-Food, or 3F.
According to CPV’s Marketing Director Ho Doan Quoc Bao, applying the 3F model means that the business covers all the production processes, from producing animal feed, building farms, and processing food from those farms.
Both CPV and VISSAN agree that the most important thing for food producers is to ensure food safety.
VISSAN has built a food processing plant on an area of 22.4 ha in Ben Luc district in the Mekong Delta’s Long An province, with total investment of $150 million.
The factory operates in a closed production chain, linking slaughter, processing, packaging and storage.
Many other food producers are also aggressively pursuing the 3F model, including the Dabaco Group and the Massan Group.
As Vietnamese consumers are often confused by information about food contamination, the 3F model helps businesses obtain a competitive advantage as consumers tend to buy products with a clear origin.
However, developing the 3F model requires businesses to have strong financial capacity, good infrastructure, and an extensive distribution system. It is therefore the common goal of all market players.
When the TPP officially takes effect many foreign enterprises will seize the opportunity to penetrate into Vietnam, and rivalry in the sausage market promises to be even fiercer in the future.