The Americanization of Vietnam’s Food

McDonald’s has been in business for one month in Vietnam, and it’s already clear the culinary culture of this leading producer of rice and seafood has changed forever.  Just one restaurant served 400,000 customers in the month after the grand opening on Feb. 8.

So far, the Saigon McDonald’s served 61,980 Big Macs for $2.84 apiece, well above the daily income of a typical Vietnamese rice farming family.

This is just the beginning.  McDonald’s is the latest chain to join the fast-food reformation of Vietnam’s diet, but it should have no problem surpassing Burger King, Domino’s Pizza, Popeye’s Louisiana Kitchen,  KFC, Subway, and others.

In part, that’s because the owner of the McDonald’s franchise has the political clout to get things done; he’s the prime minister’s son-in-law who, like McDonald’s itself, is a Chicago native.

McDonald’s Vietnam owner Henry Nguyen spent two summers as a teenager working at McDonald’s in Chicago before moving to Ho Chi Minh City a decade ago and ultimately impressing McDonald’s as “the ideal mix of business acumen, proven record, passion, and ability.”

Similarly, Vietnam’s hunger for American products and culture makes it an ideal market for McDonald’s — as it is for American soft drink, alcohol, tobacco, and other brands that are contending with legions of skeptical consumers at home.

Dreaming in Vietnam on $1 a Day

Vietnam’s statistics office and the World Bank shed new light on income in the country — and quantify the  rural-urban gap.  They say the typical city dweller earns $142 a month compared to $76 for rural residents.  Average earnings for Vietnam’s poorest citizens are estimated to be $24 per month, a 39% increase over the highly inflationary period between 2010 and 2013.

This helps explain two things: (1) why the world’s multi-national manufacturers are flocking to Vietnam to source their products, and (2) why entrepreneurial dreams are flourishing in the world’s 13th most populous country.

Vietnam has a young, educated, eager — and, most important, plugged-in — workforce accustomed to wages far behind its peers in China and elsewhere in Southeast Asia.  Even citizens who earn $1 a day tend to be literate and have someone in the family who is connected to the Internet.

And despite urban migration that is spurring explosive growth in Hanoi, Saigon and other cities, Vietnam’s population remains mostly rural and the employment mostly agriculture.  In this sector, $1 dollar a day remains the standard wage — and a job offer from a Japanese or German widget-maker looks like an attractive stepping stone to the entrepreneurial dreamland that is the World Wide Web.

 

 

Vietnam’s Out-of-Balance Trade Balance

Vietnam’s love-hate relationship with China has been centuries in the making, and now is embodied by fierce tempers over disputed islands and soaring trade between the two countries.

Vietnam and China announced this month they aim to achieve $100 billion in two-way trade by 2017 and $60 billion in 2015.  Voice of Vietnam reports $36 billion so far this year in China-Vietnam trade — which has increased more than 20% annually in recent years.

There are at least two problems with this phenomenal growth: (1) Vietnamese consumers tend to be skeptical of Chinese products, and (2) The trade is increasingly one-way — China-to Vietnam.  

In the first nine months of this year, 80% of the trade was China exports to Vietnam.  Moreover, Vietnam’s  imports from China increased 25% over the previous year while Vietnam exports to China rose less than 3%.  

The products traded aren’t favorable to Vietnam either.  Vietnam imported more than $1 billion each in machinery, telephones, computers, electronics, cotton, and steel — while Vietnam’s exports to China are mostly raw materials.

Even even though Vietnam is a major exporter of agricultural products (mostly to Europe and the US), China’s domination in Vietnam’s domestic market is growing in export of potatoes, ginger, lemon, grapefruit, pear, apple and garlic.  Because some retailers know their Vietnamese customers don’t trust Chinese products, they’re often disguised as grown in Vietnam, Thailand, the US and Australia.

Overall, Vietnam has achieved a reasonably healthy trade balance in recent years.   How did it accomplish that?  By trade with Europe and the Americas that is as imbalanced as China’s trade with Vietnam — in reverse.  So far this year, for example, the value of US-Vietnam trade was nearly $25 billion, 82% of which was Vietnamese exports to the US.  

The out-of-balance trade balances may not be sustainable.  If nothing else, it creates a diplomatic challenge for Vietnam, which wants the West’s help in fending off China’s most aggressive export of all: military might in the South China Sea.  

Rescuing Vietnam’s 882 Endangered Species

While Vietnam cultivates its industry and agribusiness, one arm of the government is looking to rescue economic development’s innocent bystanders:  882 endangered species of floral and fauna.  That number is up from 161 species 20 years ago even though some of those have become extinct, including nine kinds of animals.

Coming to the aid of non-human forms of life, Vietnam’s environment department this week introduced a national strategy to create 41 new nature reserves.  When and if that happens, 9% of Vietnam’s land mass and 45% of its forests will be protected — and there will be 10 biosphere reserves and 10 ASEAN heritage parks.  The agency’s biodiversity master plan also calls for 23 reserves by 2030 in addition to the 148 existing ones and the 41 to be established by 2020 (accounting for nearly 3,000 square miles of land).

Vietnam does not have a good reputation with organizations like the World Wildlife Fund, partly because the country — as one of the world’s most diverse — has so much to protect.  WWF and others have criticized Vietnam for not being more aggressive in combatting illegal trading of wild animals and habitat fragmentation that results from hydropower and other trappings of economic growth.

Even so, Vietnam has a passionate population of environmentalists who see biodiversity as the foundation of a green economy, a key to dealing with climate change, and a significant contributor to quality of life.  They want to balance the economic dreams of Homo sapiens with the needs of other species.

 

Vietnam Fruit and Vegetables Feed the World

Vietnam is now adding fruit and vegetables to its rapidly expanding array of major agricultural exports.  the Vinafruit industry group reports this week that exports are more than $724 million so far this year and will exceed $1 billion for the first time in 2013.

That’s a remarkable accomplishment for a country that faced starvation poverty a generation ago — and it shows Vietnam continues to grow as a major exporter of agricultural products.

Vietnam has a long way to go before it will become a global leader in fruit and vegetable exports,  but the country already is at or near the top of exports of seafood, coffee, pepper, cashews, rice, and other products that come out of the earth and sea.

Vietnam sells fruit and vegetables in 40 international markets, especially in China, USA, Japan, Korea, and Europe.

Vinafruit says the global demand for fruit and vegetables is predicted to increase 5% annually, and Vietnam intends to continue to supply the world with an expanding array of produce.

Vietnam has completed the transition from an agricultural basket case to a growing food supplier for the world.

Vietnam’s Surging Trade Surplus

Vietnam, a relative newcomer to global trade, reports a $482 million trade surplus in the first quarter on this year, far above the $300 million surplus for all of 2012 — when even its economic optimists had expected a significant deficit.  Vietnam is fast becoming a leader in exports, especially food and clothes.

The country reported nearly $30 billion in exports through March, up 20% from the previous first quarter (doubling the government’s goal) — with state-owned businesses accounting for one-third and foreign-invested businesses two-thirds.

The US is Vietnam’s biggest customer as trade between the two countries has grown very rapidly (some years exponentially) for well over a decade.  In 1992, the US exported $5 million in products to  Vietnam and reported no imports.  By 1996, bilateral trade approached $1 billion, and the US enjoyed a $300 million surplus.   In the years 2001 through 2003, Vietnam’s exports to the US went from $1 billion to $2 billion to $4 billion.

By 2012, Vietnam’s exports to the US exceeded $20 billion, and this year the number could be in the $25 billion range.  US exports to Vietnam were valued at $4.6 billion for a trade deficit of nearly $16 billion.

Last year, Americans imported $10 billion in Vietnamese shoes and clothes;  and well over $2 billion in food, mostly fish and coffee.  Vietnamese imported roughly $1 billion each worth of food, building/industrial materials and computer/telecommunications technology.

In the first month of 2013, Vietnam’s exports to the US were up 13% from the previous January while US exports to Vietnam were up nearly 30%.

The pattern over the past two decades suggests the Vietnam trade momentum is just getting started.  The country seems destined to be a major player in the global economy, while bilateral trade with the US surges.  This is one of the brightest lights in Vietnam’s otherwise fragile economy.

Where To Get Dog Food in Man-Eat-Dog Vietnam

Here’s a sign of the changing times in Vietnam:  an active discussion on Linked In about where to buy dog food in the central city of Danang; in the recent past, the discussion might have been about thit cho — which is to say dog meat for human consumption.

A butcher tended to his “hot dogs” near Hanoi in 2008

Since when does the quest for dog food take place in a country that slaughters dogs for people food?  Well, actually, for centuries.  While thit cho remains as common as chicken in some rural families, especially in the North, at least four breeds of dog unique to Vietnam are prized as pets and helpers.

Here are the breeds:

• Bac Ha, found in the far North near the Chinese border.
• Dingo Indochina, common to the Central Highlands.
• Hmong docked tail, owned by ethnic minorities in the far North.
• Phu Quoc, native to Phu Quoc Island in the Gulf of Thailand.
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Here’s where you can find more pictures of them:  Vietnam’s dog breeds.

If you want to sample the literal version of hot dogs, there are restaurant advertisements along the road throughout Vietnam’s rural North for thit cho along with other popular foods like pho ga (chicken soup), thit bo (beef), and cha ca (fried fish).