Dann Food: Growing a competitive brand

VIETNAM has a very long and proud history when it comes to agriculture. The country’s climate, from the tropical wet regions of the Mekong Delta, the cold mountainous regions of the central highlands, to the more seasonal temperatures of the north, bring diversity in locally grown food.

Strong exports over the past 15 years, and the rise in demand from a more affluent domestic market have attracted many local and foreign food processing companies to set up operations in the country, and this has certainly increased the variety and quality of food products on offer.

For this section, we feature Southern Top Co. Ltd, trading as Dann Food.  Our correspondent Anthony Evans speaks with Dann Food’s Managing Director Ms Diep Dao on the company’s operations.

Ms Diep Dao is Managing Director for Dann Food

Dann Food is a relatively young player in the industry, but it has become a successful exporter over a short period of time. Can you tell us more about the company?

The Company started around 2007 focusing on exporting processed agricultural and seafood products. At the time Vietnam was moving ahead very rapidly, however, as with most countries, the 2008 financial crisis took some wind out of our sails and made us reassess our business strategy. I think that time was good for us in retrospect as it made us think more strategically with our development. As Vietnam got more integrated with the international business community we saw the export potential for a large number of processed agricultural, and particularly seafood products, and from there we started to grow our product range and export market. Our agricultural product range consists of a number of dried and fried fruit products such as dried jackfruit chips, banana chips, taro chips, and sweet potato chips, dried mango, cashew nuts, and our dried seafood range comprises of dried shrimp, spicy shredded squid, dried black squid, dried anchovies, and we also do a dried beef product as well.   

That’s quite diverse. Are most raw materials outsourced for these products?

Presently we have a number of growers supplying us with agricultural products, but this will change in the future as we expand the company to include the growing of some of our own fruit. I can’t really see a time where we’d be completely self-sufficient with our own agricultural raw materials, but as with most businesses, it’s important to cut raw material cost where ever one can. The raw materials for our seafood product range are supplied direct from the fisherman and seafood agents, who can sometimes be a bit problematic with maintaining a regular supply, but in general we’re more than happy with this crucial part of the supply chain. 

Cashew nuts are among the company’s popular products, along with dried mango, banana chips, taro chips and potato chips

Where do you see potential future export markets?

Presently, China is our main market, particularly for our dried seafood product range, although, we’re looking at expanding into the North American or the European markets at some stage in the near future. But at the moment the regional markets closer to home such as Cambodia and Thailand are more attractive for export potential. We hope to also be exporting larger quantities once our new factory comes on line.  

You mentioned your export market as a growth area. Is the domestic market also a part of your sales strategy?

Up until about a year ago we were predominantly focused on the export market. However, as part of our expansion strategy the domestic market was seen as a great untapped potential, and now we’re putting a lot more time and effort into capturing a share. I wouldn’t say the domestic market at present is not being serviced adequately, in fact it would be better described as being competitive, with a couple of large foreign and local companies vying for market dominance. But we’ve learnt a lot over the past eight years, which gives us a competitive edge, and in that time we’ve laid a strong foundation for our future growth. As Vietnam grows and continues to move further away from the more traditional needs-based society, to a more want-based society the demand for products such as ours is increasing daily, so we feel it’s a good time to be targeting the domestic market.

That being so, will the company be expanding facilities as well?

At the moment we have two factories located in the south of the country, with our seafood processing factory located in Long An, and our agricultural facility is in Dong Nai province. Both factories are located close to HCMC. However, we are now starting to establish another processing facility in the Central region of Vietnam where we’ll also be starting to grow some of our own produce, as well as seafood processing. We hope to have the new factory operating within the next 12 months all going well.

Dried rolled squid (in photo) as well as dried shrimp and anchovies are available from Dann Food

As a company that continues to expand, is Dann Food currently investing in new technology?

When we first started operations there was some apprehension about over investing into expensive technology, and as with a lot of companies, we played it safe. But as we developed the business we started to see the advantages a greater investment would bring, and with the expansion of the company and the developing of our new production facility in the Central region, we are more confident with investing.

What challenges surface in the business you are in?

Looking at the local market I would say the biggest challenge we face is the amount of overseas products coming into Vietnam. Unfortunately, here in Vietnam overseas brands are often perceived as being of a higher quality, which is a total misconception. Also, Vietnamese are very brand focused and often products are purchased for status value rather than quality, which is an attitude we are trying to change. There are a couple of big domestic companies that are fairly aggressive when it comes to protecting their market share. We keep an eye on the competition but we don’t let it run our lives. We focus on processing a high quality product and developing ways of marketing our brand in a more direct style way such as the exhibitions. 

What is the company’s strategy regarding the marketing of your products?

At the moment we focus our marketing predominantly on Below the Line (BTL) communications in an effort to make direct contact with consumers, so domestically exhibitions are a great way to do that. We’re also considering a greater presence at shopping centers and other retail outlets as a way of giving customers the full direct product experience. We also have an online presence with our website and some social media platforms, which assist us in creating a more personal touch to our marketing strategy. We focus most of our marketing around product quality and our competitive pricing, which we’re very proud of.