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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.