Vietnam’s potential to become a global Agri-Food Hub: Opportunities and challenges

Despite foundational strengths and advantages, Vietnam faces systemic weaknesses that must be addressed to become a global agri-food hub.
Vietnam

23Jul2025

B&Company

Latest News & Report / Vietnam Briefing

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B&Company is the first Japanese company specializing in market research and investment consulting in Vietnam since 2008.

In this section “Vietnam Briefing”, young researchers of B&Company will provide timely information of Vietnam’s industrial trends, consumer trends, and social movements.

This article is written in English and automatic translation is used for other language versions. Please refer to the English version for accurate content. Although we strive to ensure the accuracy of the original information, please check separately for each information. Interpretations and future prospects are the personal opinions of each researcher.

Vietnam is widely regarded as having strong potential to become a global center for agricultural and food products. This is underpinned by a solid domestic production base and a surge in export value, which reached a record high of $62.4 billion in 2024[1]. Vietnam has significant advantages, including diverse natural conditions, a broad network of Free Trade Agreements, supportive government policies, and strong interest from global FDI corporations. However, the development path faces numerous challenges, such as high logistics costs, weak deep-processing capabilities, fragmented national branding, increasingly stringent food safety and technical barriers, and a shortage of high-quality human resources.

Vietnam’s Agricultural Strengths

Vietnam possesses foundational strengths and strategic advantages that can drive breakthroughs and help realize its ambition of becoming a global agri-food hub.

Strength Details
Strong Production Capacity and Export Momentum ▪ Abundant Output: In 2024, despite extreme weather events, including natural disasters and floods, the agricultural sector ensured national food security with rice output reaching 43.46 million tons. High-value sectors such as fisheries (total output: 9.5 million tons, up 2.5%) and forestry (harvested timber: 23.33 million m³, up 7.9%) also recorded impressive growth[2].

▪ Record Export Value: The total export value of agro-forestry-fishery products in 2024 reached $62.4 billion, up 18.5% from 2023, generating a trade surplus of $18.6 billion. Key product groups posted sharp increases, including fruits and vegetables ($7.12 billion), rice ($5.75 billion), and coffee ($5.48 billion) [3].

▪ Global Market Presence: Vietnamese agricultural products are now present in nearly 200 countries and territories, securing Vietnam’s position as the second-largest agri-exporter in Southeast Asia and 15th in the world[4].

Deep Integration and Government Support ▪ Strategic Trade Advantages: Vietnam has signed and implemented 17 FTAs, forming a vast trade network with over 60 major economies. These agreements have significantly eliminated or reduced tariffs, giving Vietnamese products a competitive edge over regional peers.

▪ Clear Political Commitment: The Government has issued the “Strategy for Sustainable Agriculture and Rural Development for 2021–2030, with a vision to 2050” (Decision 150/QĐ-TTg), marking a shift from a “production mindset” to an “agricultural economy mindset,” with a focus on added value and sustainability. The Government also promotes high-tech, organic, and clean agriculture through concrete policy measures.

Strategic Location and Strong FDI Inflow ▪ Central Location: Situated at the heart of Southeast Asia and close to major international shipping routes and large consumer markets, Vietnam has the potential to become a vital link in the regional supply chain, especially with major infrastructure projects such as Long Thanh International Airport nearing completion.

▪ Catalytic FDI: FDI in agriculture is rapidly growing, with around 537 active projects as of early 2025, generating about 500,000 jobs. Leading corporations such as Nestlé, De Heus, C.P. Group, JBS, and PepsiCo not only bring capital but also advanced technologies, modern management practices, and integration into their global value chains[5].

Key Limitations and Challenges

Despite immense potential, Vietnam faces systemic weaknesses that must be addressed for sustainable sectoral development.

Limitation Details
Logistics and Cold Chain Bottlenecks ▪ Excessive Costs: Logistics costs account for 20-25% of the value of agricultural products, significantly higher than Thailand (12%) and the global average (14%). This severely erodes profitability and competitiveness. For example, compared to Thailand, Vietnamese exporters face higher international freight costs ($1–1.2/kg more from Hanoi and Ho Chi Minh City) [6] , partly due to Thailand’s more frequent direct flights and maritime routes to key markets such as the U.S., EU, Australia, and the Middle East.

▪ Inadequate Infrastructure: Transport systems linking production areas to seaports remain underdeveloped. There is a lack of regional logistics hubs and a critical shortage of cold storage and specialized warehousing facilities.

▪ High Post-Harvest Losses: Weak preservation technology and cold chain systems lead to significant post-harvest losses, especially for fruits and vegetables, estimated at 30-35%, resulting in massive resource waste.[7].

Limited Deep Processing and Weak Branding ▪ Reliance on Raw Exports: Approximately 80–90% of Vietnam’s agricultural exports are in raw or semi-processed form, generating low added value. The limited capacity for deep processing to produce final products remains one of the most significant “structural barriers” hindering the sustainable development of the agricultural sector [8]

▪ Underdeveloped Branding: Around 80% of exported agri-products lack distinct brands, logos, or labels. Notably, nearly 80% are marketed under foreign brands. This creates a vicious cycle: without deep processing, there are no branded products, and without brands, market recognition remains elusive [9].

Technical Barriers and Food Safety Concerns ▪ Stricter Import Standards: Major importers such as the EU, Japan, the U.S., and China are tightening sanitary and phytosanitary (SPS) standards. In 2024, Vietnam received a record 1,029 WTO notifications related to food safety. In just the first two months of 2025, the EU issued four new warnings against Vietnamese agri-products[10].

▪ Stricter Traceability Requirements: Compliance with international standards (e.g., GlobalGAP) and the establishment of reliable, transparent traceability systems have become prerequisites for market access and sustainability in high-standard markets.

Shortage of Skilled Human Resources ▪ Labor Crisis: The agricultural sector faces a dual workforce crisis, both in quantity and in quality. There is a shortage of experts and workers capable of applying advanced technologies. Young, educated workers are increasingly leaving the sector due to low incomes and limited development opportunities, hindering the sector’s modernization.

▪ Low Labor Productivity: Agricultural labor productivity is only 38.1% of the national average across all economic sectors[11].

Vietnam holds strong potential to become a global agri-food hub, but realizing this vision requires addressing deep-rooted structural barriers and accelerating value-added transformation.

How B&Company Can Support FDI Investors in Agriculture

With extensive experience in Vietnam since 2008, B&Company can support FDI investors interested in the agriculture sector through the following key service areas:

B&Company service Description
Market Research & Analysis ▪ In-depth Industry Reports: Provide comprehensive analyses on specific agricultural segments (e.g., tea industry outlook, production and export trends, emission reduction technologies, agri-byproduct utilization).

▪ Custom Market Research: Conduct quantitative surveys (e.g., consumer and business surveys) and qualitative interviews (e.g., in-depth interviews, focus groups) to understand market size, supply chains, competitors, and consumer preferences.

▪ Corporate Database Access: Assist in screening, analyzing, and identifying potential partners, suppliers, or clients.

Market Entry & Strategy Consulting ▪ Market Entry Strategy: Advise and develop tailored entry strategies for FDI companies, from opportunity assessment and target segment identification to business planning.

▪ Legal Support and Company Setup: Assist with obtaining Investment Registration Certificates (IRCs), Enterprise Registration Certificates (ERCs), and other necessary licenses.

▪ Initial Setup Support: Help with post-licensing tasks, including office setup, local recruitment, and workforce training.

Business Matching & Partner Search ▪ Partner Identification and Evaluation: Leverage our network and database to identify, approach, and evaluate potential partners (e.g., distributors, joint venture partners, raw material suppliers).

▪ Meeting and Field Visit Coordination: Organize business meetings and field trips to production sites and farming areas for firsthand market assessment.

▪ Negotiation Support: Facilitate early-stage negotiations through to formal partnership agreements.

M&A Advisory ▪ Target Identification and Evaluation: Identify and assess agricultural companies that match the investor’s M&A strategy.

▪ Due Diligence Support: Coordinate due diligence processes on target companies from a business and market perspective.


[1] Việt Nam xuất khẩu nông lâm thủy sản đạt kỷ lục 62,4 tỷ USD trong năm 2024 | Vietnam+ (VietnamPlus)

[2] Sản xuất nông, lâm nghiệp và thủy sản năm 2024 đáp ứng nhu cầu trong nước và xuất khẩu

[3] https://www.vietnamplus.vn/viet-nam-xuat-khau-nong-lam-thuy-san-dat-ky-luc-624-ty-usd-trong-nam-2024-post1004019.vnp

[4] https://www.vietnamplus.vn/viet-nam-xuat-khau-nong-lam-thuy-san-dat-ky-luc-624-ty-usd-trong-nam-2024-post1004019.vnp

[5] Thu hút đầu tư FDI vào nông nghiệp: vẫn còn nhiều việc cần làm

[6] TTWTO VCCI – Chi phí logistics cao khiến xuất khẩu nông sản nhiều thuận lợi nhưng kém cạnh tranh

[7] TTWTO VCCI – Chi phí logistics cao khiến xuất khẩu nông sản nhiều thuận lợi nhưng kém cạnh tranh

[8] Cấp thiết xây dựng thương hiệu quốc gia cho nông sản Việt

[9] Xây dựng thương hiệu nông sản Việt Nam

[10] Việt Nam nhận hơn 1.000 thông báo điều chỉnh an toàn thực phẩm từ các nước trong năm 2024 | BÁO SÀI GÒN GIẢI PHÓNG

[11] Bai-bao-ve-Nong-nghiep-4.0-Duc_KTNN-Lan-2.pdf

 

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B&Company

The first Japanese company specializing in market research in Vietnam since 2008. We provide a wide range of services including industry reports, industry interviews, consumer surveys, business matching. Additionally, we have recently developed a database of over 900,000 companies in Vietnam, which can be used to search for partners and analyze the market.

Please do not hesitate to contact us if you have any queries.

info@b-company.jp + (84) 28 3910 3913

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