Organica founder, Ms. Pham Phuong Thao, shakes hand with Jennifer Buckley, SEAF Senior Managing Director. [Image: Courtesy of SEAF]

Vietnamese Food Supplier Secures Funding from DC-based Investment Firm

ASEAN The Mekong

Demand for organic products in Vietnam has been rising due to concerns about food safety, as consumers want products that are beneficial for both health and the environment. Recently, organic farming has been increasing, with more than 187,800 acres dedicated to organic agricultural practices since 2010.

This growing demand has attracted DC-based investment firm, the Small Enterprise Assistance Fund (SEAF) within the Women’s Opportunity Fund (SWOF), to invest in Organica, a Vietnamese organic food supplier. SWOF will hold a 30% stake in Organica, in addition to giving the company a 5-year loan and helping with retail and financial strategies to expand past existing stores in Ho Chi Minh City, Ha Noi, and Da Nang. This investment will help Organica compete with supermarket retailers who already have a strong presence in the organic market industry, such as Intimex HoChiMinh, BigC, Co.Op Mart, and Citimart.

One big challenge has been the lack of framework to certify and label the produce, which has resulted in companies relying on standards set by the US Department of Agriculture, the European Union of Agricultural Ministers, and the Japanese Agricultural Standard. The investment could spur the Vietnamese Ministry of Agriculture and Rural Development to quickly develop the country’s domestic standards to increase access to global market. Vietnam ranks third in rice exports globally, however, according to the Food and Fertilizer Technology Center for the Asian and Pacific region, heavy pesticide use in farming makes it difficult for Vietnam to reach “premium markets” such as the United States and Japan.

Such partnerships with countries in the Indo-Pacific, particularly Southeast Asia, remain vital in helping US states reap benefits of agricultural produce exports, such as soybean and wheat. Vietnam in 2016 imported a cargo of 2.64 million bushels of US corn, where such products are favored for their high quality.

Caitlin Huynh is a participant of the Young Professionals Program at the East-West Center in Washington. She will be graduating from Virginia Tech with Bachelors of Arts in International Studies and French.