Vietnam's pet food industry is anticipating greater cooperation and investments from the U.S. in 2024 after the U.S. Department of Agriculture Foreign Agricultural Service (FAS) announced $170,000 in federal funding to increase U.S. companies' access in Vietnam by promoting U.S. agricultural products and commodities.
The funds from FAS' Market Access Program (MAP) has been earmarked for the American Feed Industry Association (AFIA) which committed to use the money to broaden access, support and export of U.S. animal food products to Vietnam and China.
Dezan Shira & Associates, a provider of business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region, said Vietnam's pet food sector could use U.S. investments in the areas of raw material and manufacturing.
Local pet food producers are still primarily using rice as pet food instead of maize or corn. This opens an opportunity for U.S. companies to offer cheaper alternatives to rice and also supply local pet food manufacturers with other raw materials such as additives and specialized nutritional supplements, which Vietnam currently imports.
Vietnam can also benefit from U.S. investments in the form of knowledge and technology transfer, DS&A said. Majority of Vietnamese pet food manufacturers are still using old technology and machines that are costly to run and limit production in terms of volume and quality.
In addition, Vietnam's animal farms can use AFIA's help to learn about the benefits that U.S. animal food products bring to improve animal health and production. The trade association can also provide Vietnamese pet owners with latest information about complete and balanced pet diets that can help pets to live longer.
Vietnam is one of the least developed pet food markets in Asia and was recently ranked as the country with the lowest budget for dog food a year based on a recent market study led by U.S.-based online lender CashNetUSA. But this is also the reason why Vietnam can be a fertile ground for international pet food companies to invest in as the country's pet ownership rate continues to grow.
TGM Research in its 2023 Pet Care survey in Vietnam found that 67% of the total respondents own a pet or two (74% with dogs, 51% with cats).
Meanwhile, U.S. companies can also increase its presence in Vietnam by collaborating with local OEM solution providers for manufacturing and warehousing or by entering into distribution contracts with private local firms.
