90% of FMCG turn to circular economy: VCCI


(Photo: Vinamilk)

According to the Vietnam Chamber of Commerce and Industry (VCCI), 90% of Fast-Moving Consumer Goods (FMCG) enterprises in Vietnam have shifted toward the circular economy, including food and non-alcoholic beverage big brands such as Nestlé, Coca-Cola, and Vinamilk have joined this movement. However, the adoption of most enterprises is still in the early stages or at the intermediate level.

Nguyen Quang Vinh, Deputy Chairman of VCCI, has stated that the performance of circular economy applications in enterprises with foreign investments is considered better. This is more obvious for large enterprises that focus on the international market, as this market applies a higher environmental responsibility standard for suppliers.

Despite the optimistic outlook for the FMCG industry, food and non-alcoholic beverage enterprises face pressures from various factors, such as Free Trade Agreements (FTA), Extended Producer Responsibility (EPR) implementation, increased demand for raw materials, and the Covid-19 pandemic interrupted global supply chain. In response to these challenges, the adoption of circular economy model is expected to enhance company efficiency through the development of resources, infrastructure, and new technologies.

However, Vietnam lacks a dedicated policy for the circular economy so far. Not only have no clear objectives, but the “State Budget Law” also lacks a separate chapter and article that declares the circular economy. It is difficult to meet actual demands. Especially, there are seriously insufficient stimulus measures for using natural resources as raw materials, such as tax and fee incentives. According to Nguyen Quang Vinh, “therefore, complete regulations regarding utilizing resources and protecting the environment efficiently, especially for the circular economy, are very important and urgent.”

As a benchmark company, multinational food giant Nestlé Vietnam has not only ranked among the top 10 most sustainable businesses in Vietnam in the manufacturing sector for three consecutive years but also collaborated with the Vietnamese Ministry of Agriculture and Rural Development (MARD), to promote low-carbon agriculture and regenerative agriculture, fostering multi-faceted cooperation in technology transfer, R&D. Nestlé Vietnam also launched the "sustainable coffee farming with combined agro-forestry model" project in 2023, aiming to absorb and store 480,000 tons of CO2 by planting 2.3 million trees within five years.

Meanwhile, Vinamilk, a listed dairy company in Vietnam, has been implementing a sustainable development strategy since 2022. It stands out as one of the first enterprises to adopt the ISO 14064 standard, conducting greenhouse gas inventories and management for livestock and production activities. The company has also developed green ecological farms and installed solar panels in all farms and factories. According to a report by "Brand Finance", the world's leading independent brand valuation consultancy, among the top five globally sustainable dairy brands, Vinamilk is the only brand that comes from Southeast Asia.

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