Dairy businesses approach the problem of 'green' exports

Vinamilk, the new dairy brand ranked 5th globally in terms of sustainability, is clearly demonstrating the company's strong transformation towards "green" and sustainability to increase its strength in the export sector.

“New passport” for many export markets

Globally, the green consumption trend has become popular and is no longer a niche market as before, but has gradually become a common requirement in all segments and all markets. From there, it has created new rules of the game in global trade, requiring businesses to quickly transform.

In Europe - a major export market of Vietnam, climate neutral trade plans such as: Carbon Border Adjustment Mechanism (CBAM), Farm to Fork Strategy, Circular Economy Action Plan or Biodiversity Strategy to 2030... have created new requirements on sustainability, requiring adjustments in the production activities of export enterprises.

On the other hand, besides challenges, regulations on sustainable development (SD) such as reuse, recycling, energy saving, etc. also create new development opportunities for Vietnamese enterprises. For example, with the 15 Free Trade Agreements (FTAs) that our country has signed and taken effect, compliance with new rules of the game on quality and environmental standards is not only a responsibility to implement the agreements but also helps Vietnamese goods expand their export routes and enjoy tax incentives from importing countries with plus points demonstrating "responsibility" such as "green", "sustainable", "environmentally friendly" production.

Vietnamese enterprises with the problem of "green" export

Vinamilk, a company with over 25 years of experience exporting milk – a product that is not Vietnam’s strength. From exporting only one product, powdered milk and baby food to the Middle East, Vinamilk has now exported a wide range of products to nearly 60 countries and territories around the world, including powerful countries with high export requirements such as: Singapore, Japan, New Zealand, Australia…

Recently, this brand was also rated in the Top 5 most sustainable milk brands globally and leading in Vietnam. In particular, Vinamilk's sustainability awareness score was rated the highest, surpassing many other big names in the world's dairy industry.

The company shared that more than 10 years ago, Vinamilk was asked and was ready to provide a sustainable development report according to the partners' requirements. The requirements related to environmental certification/certification, labor rights, animal welfare, etc. - content that was quite new at that time.

This process is developing very quickly and is being utilized by businesses as a competitive advantage when exporting. In addition to building international standards such as: ISO 9001:2015, FSSC 22000, BRC, ISO 17025, Halal, Organic EU, Organic China... Vinamilk has completed greenhouse gas inventory reports, energy use... The business is also accelerating the Net Zero process with the first factories and farms to achieve carbon neutrality - an aspect that is of interest to many international markets.

For example, for developed markets like New Zealand, Vinamilk is providing products with “green and sustainable” requirements such as no plastic straws or plastic lids according to an agreement to reduce plastic waste in the environment. These “green” products are also of interest to partners in the Australian market and are implementing an import plan in 2024.

For example, Vinamilk has converted its live culture yogurt drink (130ml) to packaging made from environmentally friendly materials and is ready to supply to the export market, while researching conversion for other product lines. Vinamilk and its export partners expect that from 2025, all products exported to Australia and New Zealand will use packaging made from recyclable, environmentally friendly materials... In addition, Vinamilk will also develop in high-income market groups in Asia, America and traditional market groups that have been exploited in the recent period.

The early recognition and assessment of the importance of “green passports” and the PTBV factor in high-end markets such as Australia and New Zealand helped Vinamilk achieve relatively positive initial results. The Australian market has seen sales growth of more than 10% per year, and Vinamilk’s products are currently being distributed at major supermarket chains such as Costco, Woolworths, Coles, Aldi, Foodstuff, etc., and there are continuous projects to develop new products and strengthen this market.

Sharing about Vinamilk's international business orientation, Mr. Vo Trung Hieu, Vinamilk's International Business Director, said: "Currently, most of our partners in developed market groups have specifically mentioned requirements related to PTBV. Determining early that high environmental and social standards also create business advantages in the export market, Vinamilk has been proactively transforming its operating methods, increasing investment in equipment, focusing on training and developing human resources, actively transforming digitally and greenly to adapt to new conditions."

Sustainable development – ​​a “magnet” attracting new generation consumers

From another perspective, besides helping products overcome "green barriers" to be imported into the market, it is also necessary to understand that "green" and "sustainability" are important criteria that consumers are increasingly interested in when deciding to buy.

A KPMG consumer behavior survey across 11 countries found that 64% of consumers want to understand the environmental impact of products before making a purchase, and 86% of consumers want to use products that are more reusable and recyclable.

This trend is not only popular in developed countries but is also growing strongly in Vietnam. The Customer Experience Excellence (CEE) 2022 Report of Vietnam published by KPMG shows that up to 93% of customers in Vietnam are willing to pay more for products and services integrated with ESG.

Therefore, this transformation is inevitable and enhancing thinking and production in the direction of sustainable development will help Vietnamese enterprises exploit more effectively the advantages of export products and thereby, enhance the value of both products and brands./.