Pungent pride
Unilever sniffs money to be made in marketing traditional Vietnamese
fish sauce. But first it must allay fears that it will monopolize a national
treasure
HANOI - After building its reputation on fragrant shampoos, facial
creams
and detergents, Unilever is turning to a more pungent product. Main
ingredients: decomposed anchovies and lots of salt. That might not
appeal to
everyone, but for culinary fans of the Vietnamese fish sauce known as
nuoc
mam the taste is unbeatable.
To triumph over other brands, the Anglo-Dutch giant didn't just reach
for
any old fish sauce. It extended its mighty hand to the southern island
of
Phu Quoc where generations of small producers have fermented Vietnam's
most
famous nuoc mam. In February, Unilever struck a deal with some of these
traditional artisans to bottle and label their special sauce under its
Knorr
brand. After opening a new bottling factory on the island in late
October,
Unilever will launch TV ads that urge consumers to "Experience the
Legend."
But like most legends, Phu Quoc fish sauce has engendered its own share
of
battles. While Unilever has teamed up with some local producers and
negotiated carefully with government officials, some proud veterans of
the
trade fear that this foreign firm will end up monopolizing what they
view as
a national treasure-- or alter their traditional product to suit Western
tastes. Such fears have prompted some feisty opposition in the local
press
and angry letters to Hanoi officials. Yet Unilever and its local
supporters
maintain that the venture will enhance islanders' prosperity, with the
firm
using its proven skills in marketing and distribution to make Phu Quoc
fish
sauce more popular than ever.
The very novelty of the Unilever venture helps to explain some of the
friction. It's a test of whether a foreign firm can successfully market
another nation's product that is already certified with an appellation
of
origin--the status assigned to a product that comes from a specific
geographical area and is manufactured in a unique way. (Think France's
champagne wines and Italy's Parma ham.) In June last year, the Phu Quoc
producers obtained this coveted status from the French issuing
authority,
the Institut National des Appellations d'Origine, and local authorities.
In theory, this could help ward off counterfeiters. The Phu Quoc
producers
use anchovies exclusively fished in the waters surrounding the island,
then
soak the fish for more than a year in a particular kind of wooden
barrel.
They keep careful watch over the colour, the flavour and the protein
content
of their sauce. The concoction is then transported in jerrycans to be
bottled on the mainland. Over the years, however, island producers have
grown alarmed at the numerous bottles popping up with fishy labels and
even
more dubious contents. Mindful of the island's fame, shady manufacturers
from other Vietnamese regions and other countries have been flogging
other
varieties of fish sauce under the Phu Quoc name.
In practice, however, Hanoi has found it tough to crack down on fakes.
That's one reason why Unilever has stepped in, through its subsidiary
Bestfoods. Having quashed counterfeit goods in other markets through its
commercial clout and legal minions, the Unilever team brims with
confidence.
"The people of Phu Quoc want to make sure that the consumer can trust
whatever they are buying. We believe we can help deliver that promise to
the
consumer," says Mick Van Ettinger, general manager for Bestfoods in
Vietnam.
Building trust among the island's 80 fish-sauce producers was the first
step. The Unilever team began scoping out the territory more than two
years
ago, meeting repeatedly with the island's grizzled tastemakers and
trying to
overcome local suspicions that meddlesome outsiders were bent on
stealing
secrets. Finally, they struck a deal with a newly-formed company called
Quoc
Duong, comprising 17 local producers.
Under the agreement, Unilever pledged an advance payment of 12.7 billion
dong ($833,000) to Quoc Duong for investment in a bottling plant built
on
the island and run according to international hygiene standards. "If we
bottle our product in Phu Quoc, we can guarantee the quality as well as
the
flavour." explains Nguyen Thi Tinh, who is Quoc Duong's director and
chairwoman of the Phu Quoc fish-sauce producers' association. Quoc Duong
will supply the ingredients to the plant and supervise bottling.
Meanwhile,
Unilever--armed with the country's largest advertising budget and an
elaborate distribution network penetrating remote villages through
motorcycle and houseboat delivery--will handle advertising, marketing
and
distribution. Unilever Vietnam posted revenues of $250 million last year
from its portfolio of detergent, cosmetic and food items.
Labelling required another round of negotiation with government
officials.
Vietnam's National Office of Industrial Property made it clear that it
would
not approve any label that featured the name Phu Quoc on the same line
as
Knorr, the brand backed by Bestfoods. "You cannot treat the brand as if
the
brand is the appellation of origin," explains French embassy commercial
counsellor Christian Saillard, who has been coaching local fish-sauce
producers since 1999. "If you say that, it means that if you want Phu
Quoc
Nuoc Mam, it has to be Knorr. And that is not allowed."
So Unilever will emblazon its label with the name Phu Quoc Fish Sauce,
printing the Knorr brand in modest letters below. "Knorr is so small you
probably need binoculars to see it on the label," says Unilever Vietnam
chairman Michel Dallemagne.
Still, the idea of linking a foreign brand to a beloved local product
continues to disturb some Phu Quoc veterans. The same passion that drove
them to obtain the appellation of origin is now compelling them to
remain
wary of the partnership. "We have built the name of our product for many
years," says Dang Van Thoi, owner of Hung Thanh fish sauce. "They cannot
come and stick the name of Phu Quoc to Knorr. I am very sad about this.
Because they have dollars, they think they can do whatever they want."
To soften such criticism, Unilever has thrown in a few sweeteners. The
company plans to help islanders build a museum dedicated to Phu Quoc and
its
fish sauce. It also plans to bring in environmental scientists to study
the
life cycle of anchovies, to help ensure sustainable development of
fish-sauce production. And it has sought to allay fears that it would
alter
Phu Quoc fish sauce to suit Western tastes. Dallemagne says that
domestic
shoppers are the primary target, though the large overseas Vietnamese
communities in the United States, France and Australia could eventually
provide a base for a lucrative export market. "We will not change
anything
about this product," insists Van Ettinger.
The next test
Phu Quoc now yields roughly 8 million-10 million litres of fish sauce a
year
out of an estimated total national production of 190 million litres.
Although Unilever has promised not to purchase all of the island's
available
fish sauce, the new bottling factory can process 20 million litres
annually.
Producers remain free to sell to their usual wholesalers, at a market
price
equivalent to what Unilever will pay. But the real question is whether
the
Knorr bottles will eventually corner the market with a special sticker
indicating that the European Commission recognizes the sauce was
processed
under controlled conditions.
None of the producers has reached this stage yet. First, they must prove
to
European authorities that they have set up a strict control system that
monitors the amount and the origin of the anchovies, documents
processing
techniques and ingredients, oversees bottling and includes regular
auditing.
For most of these mom-and- pop producers, who are used to operating
independently, and somewhat haphazardly, the task is enormous.
Most observers agree that it will be easier to set up a control system
on
the island, rather than the mainland. And so far, Quoc Duong is the only
company with a bottling factory on Phu Quoc, thanks to Unilever. The
special
stickers would allow Unilever to charge a higher premium for its Knorr
fish
sauce, and pass on some of the additional earnings to its suppliers in
Quoc
Duong-- and also help in fighting counterfeits.
Despite the difficulties, Unilever remains optimistic. "Out of 50
launches
and re-launches in this country, we have only failed once or twice,"
says
Dallemagne. With the nuoc mam heading for shelves in November, market
analysts will be watching to see whether sales measure up to the legend.
By Margot Cohen - The Far Eastern Economic Review - September 26, 2002.
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