Thesis Access

A FARM-TO-TABLE SUPPLY CHAIN
TO ADDRESS FOOD SAFETY FOR

FRESH FOOD IN VIETNAM
BY
TRUONG CONG BANG
A thesis
submitted to the Victoria University of Wellington
in fulfilment of the requirements for the degree of
Master of Innovation and Commercialisation
Victoria University of Wellington

2019
Abstract
Food safety has been a major concern in Vietnam in recent years. Due to high-profile
scandals of food contamination, foodborne diseases and food poisoning,
Vietnamese consumers lost their confidence in the safety of food. Mitigating this
problem, the idea of this project is to develop a farm-to-table supply chain that
facilitates trade between producers and consumers more directly and incorporates
with processes of food traceability and quality control. The environmental
assessment and the literature review explored both opportunities and challenges to
a farm-to-table supply chain as well as the lack of knowledge relating to the
sustainable food value chain in Vietnam. Considering known and unknown
knowledge, this thesis focused on exploring producers’ capability and consumers’
satisfaction to construct a business case that delivers the farm-to-table supply chain
to consumers. On one side, a qualitative study was conducted to embrace insights
of farmers’ existing practices and perspectives through in-depth interviews. On the
other side, a quantitative study surveyed consumers’ fresh food shopping behaviour
and expectations and their reaction to the proposal of a farm-to-table solution.
Findings of the exploratory research were important materials to construct a business
case that aims to address food safety in Vietnam. Overall, this report justified the
idea of a farm-to-table supply chain for fresh food in Vietnam and proposed a
business case to deliver this solution to Vietnamese consumers.
i
Acknowledgement
I would like to acknowledge New Zealand Aid Programme to award me the scholarship
to study at Victoria University of Wellington. This is a great honour and a great
opportunity to expand my horizon of knowledge.
I highly appreciate my supervisor Doctor Bronwyn Howell giving me guidance and

advice on this thesis. I also thank Programme Directors and classmates in the
Master of Innovation and Commercialisation Programme for their input and
feedback on my ideas.
I am grateful to my family for their love and encouragement. I save a special thanks to
my wife, Huyen Anh, for giving me strengths and confidence to pursue my dream.
Lastly, this thesis aims to build an innovative solution for the food safety problem in
Vietnam, and it would be much appreciated to receive any input or feedback for
improvement. Please do not hesitate to contact me via this email
address [email protected].
March 2019
ii
Table of contents
Abstract...................................................................................................................... i
Acknowledgement.................................................................................................... ii
Table of contents..................................................................................................... iii
List of figures ........................................................................................................ viii
List of tables ............................................................................................................. x
CHAPTER 1. OVERVIEW ....................................................................................... 1-1
1. PURPOSE ..................................................................................................... 1-2
2. OBJECTIVES ................................................................................................ 1-2
3. ASSUMPTIONS ............................................................................................ 1-3
4. SCOPE .......................................................................................................... 1-3
5. STAKEHOLDERS ......................................................................................... 1-4
6. THESIS STRUCTURE .................................................................................. 1-5
CHAPTER 2. INTRODUCTION .............................................................................. 2-6
1. FOOD SAFETY IN VIETNAM ........................................................................ 2-7
1.1. Social concerns....................................................................................... 2-7
1.2. Government controls............................................................................... 2-7
1.3. Economic impacts ................................................................................... 2-8
1.4. Media influence ..................................................................................... 2-10
1.5. Environmental footprints ....................................................................... 2-10
1.6. Technological trend............................................................................... 2-10
2. BUSINESS OPPORTUNITIES AND CHALLENGES .................................. 2-12
2.1. Opportunities ........................................................................................ 2-12
2.2. Challenges ............................................................................................ 2-13
3. GROUNDED THEORY................................................................................ 2-15
3.1. Supply chain management ................................................................... 2-15
iii
3.2. Sustainable food value chain framework .............................................. 2-15
3.3. Business model development ............................................................... 2-17
4. APPLICATIONS OF GROUNDED THEORY ............................................... 2-19
4.1. The vegetable supply chain in Ho Chi Minh City ................................... 2-19
4.2. The vegetable value chain in Ho Chi Minh City .................................... 2-21
4.3. Unfulfilled gap of prior literature ............................................................ 2-22
CHAPTER 3. METHODOLOGY............................................................................ 3-24
1. RESEARCH DESIGN .................................................................................. 3-25
2. QUALITATIVE METHOD FOR OBJECTIVE ONE ...................................... 3-27
2.1. Qualitative data collection ..................................................................... 3-27
2.2. Interview questionnaire design ............................................................. 3-28
2.3. Participants’ background ....................................................................... 3-30
2.4. Qualitative data analysis ....................................................................... 3-31
3. QUANTITATIVE METHOD FOR OBJECTIVE TWO ................................... 3-35
3.1. Quantitative data collection ................................................................... 3-35
3.2. Consumer survey design ...................................................................... 3-36
3.3. Respondents background ..................................................................... 3-38
3.4. Quantitative data analysis ..................................................................... 3-40
4. ETHICS CONSIDERATION ........................................................................ 3-42
CHAPTER 4. FINDINGS AND ANALYSIS ........................................................... 4-44
1. QUALITATIVE FINDINGS ........................................................................... 4-45
1.1. Farmers’ current practices .................................................................... 4-45
1.2. Farmers’ awareness and expectation ................................................... 4-50
1.3. Unexpected findings ............................................................................. 4-54
2. QUANTITATIVE FINDINGS ........................................................................ 4-56
2.1. Consumers’ existing shopping behaviour ............................................. 4-56
iv
2.2. Consumers’ attitude toward sustainable production.............................. 4-62
2.3. Consumers’ expectation in a farm-to-table solution .............................. 4-65
2.4. Consumer’s online shopping behaviour ................................................ 4-67
3. OVERALL FINDINGS SUMMARY .............................................................. 4-68
3.1. Outcomes of food system exploration ................................................... 4-68
3.2. Outcomes of market and product validation .......................................... 4-70
CHAPTER 5. DISCUSSION .................................................................................. 5-72
1. REFLECTION ON ASSUMPTIONS ............................................................ 5-73
1.1. The assumption about supply ............................................................... 5-73
1.2. The assumption about market demands ............................................... 5-74
2. REFLECTION ON OPPORTUNITIES AND CHALLENGES........................ 5-76
2.1. Taking advantage of opportunities ........................................................ 5-76
2.2. Dealing with challenges ........................................................................ 5-77
3. REFLECTION ON THE PROJECT FEASIBILITY ....................................... 5-78
3.1. Customer segment................................................................................ 5-78
3.2. Value proposition .................................................................................. 5-80
3.3. Marketing channel................................................................................. 5-81
3.4. Technological involvement .................................................................... 5-83
4. THE BUSINESS MODEL DISCUSSION ..................................................... 5-85
4.1. Cooperative model ................................................................................ 5-85
4.2. Subscription model ............................................................................... 5-87
4.3. Decisions on the business model.......................................................... 5-88
5. WHAT REMAINS UNKNOWN? ................................................................... 5-90
6. RESEARCH CONCLUSION........................................................................ 5-91
v
CHAPTER 6. THE BUSINESS CASE................................................................... 6-94
1. BUSINESS MODEL DESIGN ...................................................................... 6-95
1.1. Goal and vision of this project ............................................................... 6-95
1.2. Opportunities and constraints for development and commercialisation 6-96
1.3. Business strategy imperatives .............................................................. 6-98
1.4. Business operation models ................................................................... 6-99
1.5. Business activities............................................................................... 6-104
1.6. Performance measurement system .................................................... 6-106
2. MARKET VALIDATION AND DEVELOPMENT ......................................... 6-109
2.1. How are customers currently solving the problem? ............................ 6-109
2.2. Who are ideal subscribers? ................................................................ 6-110
2.3. What are barriers to switch consumers? ............................................. 6-111
2.4. How competitive is the market? .......................................................... 6-111
2.5. How do similar businesses work? ....................................................... 6-112
2.6. How big is the market? ....................................................................... 6-115
3. PRODUCT VALIDATION AND DEVELOPMENT ...................................... 6-119
3.1. What features does the MVP need? ................................................... 6-119
3.2. How is MVP tested?............................................................................ 6-120
3.3. What are the costs to build MVP? ....................................................... 6-121
3.4. Intellectual property protection ............................................................ 6-122
4. RESOURCE REQUIREMENTS AND RETURN ........................................ 6-123
4.1. Skills and knowledge required ............................................................ 6-123
4.2. Expenses and investments required ................................................... 6-125
4.3. Capital funding .................................................................................... 6-126
4.4. Timeline of MVP development ............................................................ 6-127
THE BUSINESS CASE’S SUMMARY ............................................................. 6-128
vi
CHAPTER 7. CONCLUSION .............................................................................. 7-132
REFERENCES ....................................................................................................... 137
APPENDICES ........................................................................................................ 142
APPENDIX 1. QUALITATIVE INTERVIEW ......................................................... 142
APPENDIX 2. QUANTITATIVE CONSUMER SURVEY ..................................... 143
vii
List of figures
Figure 1. Percentage of farm units by landholding size in 2011
Figure 2. Macro-environment analysis summary
Figure 3. Overview of sustainable food value chain framework
Figure 4. Retail channels in Vietnam and contribution in 2018
Figure 5. Traditional and modern vegetable supply chain in Ho Chi Minh City
Figure 6. The vegetable value chain in Ho Chi Minh City
Figure 7. Design of the research
Figure 8. Qualitative analysis process
Figure 9. Coding structure of qualitative data
Figure 10. Hierarchy of qualitative data
Figure 11. Cluster diagram of qualitative data
Figure 12. Consumer survey process
Figure 13. Target market size formula
Figure 14. Consumer survey distribution and record
Figure 15. Sample demographics of consumer survey
Figure 16. Quantitative analysis process
Figure 17. Farmer’s categorisation
Figure 18. Fresh food shopping frequency
Figure 19. Association of shopping frequency with occupation and education
Figure 20. Fresh food average purchase
Figure 21. Association of average purchase with education
Figure 22. Association of shopping frequency with average purchase
Figure 23. Sale channel and consumer trust
Figure 24. Association of channel with frequency and average purchase
viii
Figure 25. Consumers’ store selection criteria
Figure 26. Consumer confidence in fresh food
Figure 27. Consumers’ perspectives and demographics association
Figure 28. Consumers’ awareness about the farm-to-table concept
Figure 29. Consumers’ interest in the farm-to-table solution
Figure 30. Desired features of the farm-to-table solution
Figure 31. Online shopping categories and payment methods
Figure 32. Consumer decision-making process for fresh food
Figure 33. Consumer segment for the farm-to-table solution
Figure 34. Value contribution of retail channels in Vietnam 2015 – 2020 forecast
Figure 35. The comprehensive version of a subscription model
Figure 36. Three strategic imperatives of the farm-to-table platform
Figure 37. How the farm-to-table platform selects farmers
Figure 38. How the farm-to-table platform works
Figure 39. How the farm-to-table platform endures customer relationship
Figure 40. How the farm-to-table platform establishes the value chain
Figure 41. Subscription’s sale formula
Figure 42. Market size analysis framework
ix
List of tables
Table 1. Key stakeholder groups of the farm-to-table project
Table 2. Vietnam food poisoning report 2014 – 2017
Table 3. A global snapshot of small farmers
Table 4. Business model canvas framework
Table 5. Indicators of farmer’s current practices
Table 6. Indicators of farmer’s awareness and expectations
Table 8. Interview participants’ background
Table 9. Node 1 – Farmers’ current practices
Table 10. Node 2 – Farmer perspective and perception
Table 11. Consumers’ perspectives
Table 12. Findings of the qualitative study
Table 13. Findings of the quantitative study
Table 14. Criteria of farmer selection process
Table 15. Farmer-owned cooperatives versus consumer-owned cooperatives
Table 16. Chances versus risks of a subscription business model
Table 17. Cooperative model versus subscription model
Table 18. Summary of research conclusion
Table 19. Assessment of the business environment
Table 20. Vietnamese households’ responses to food safety
Table 21. Ideal subscriber’s worksheet
Table 22. Competitor worksheet 1
Table 24. Assumptions of customer base
Table 25. Assumptions of average purchase value
x
Table 26. Assumptions and revenue steam of the farm-to-table platform
Table 27. Costs of MVP design
Table 28. Start-up team’s functions
Table 29. Costs and expenses required
Table 30. The farm-to-table project’s timeline
xi
Chapter 1. Overview
CHAPTER 1. OVERVIEW
1-1
Chapter 1. Overview
1. PURPOSE
Food safety has been a major concern in Vietnam in recent years (The World Bank,
2017). Vietnamese individuals and families are frequently surrounded by information
about food contamination, food-borne diseases, and chemical and pesticide residue
in agricultural products (Nguyen-Viet, Tuyet-Hanh, Unger, Dang-Xuan, & Grace,
2017). As a result, consumers are losing their confidence in food quality and
confronting questions regarding where, how and from whom they can purchase quality
food (Wertheim-Heck, Spaargaren, & Vellema, 2014). Despite access to processed
food and convenient or ready-to-eat food, fresh food is still very important to
Vietnamese people and their traditional cuisine (The World Bank, 2017). On account
of these insights, this thesis aims at establishing a business case for fresh food in
Vietnam. Embracing the impact of digitalisation, the research looks for opportunities
to develop a farm-to-table supply chain through a digital platform. The platform will be
a channel to build farmers and consumers connection, address food safety in short-
term and build trust in food in long-term in Vietnam.
2. OBJECTIVES
The idea of farm-to-table supply chain is to create a marketplace where
consumers can directly acquire food or agro-products from farmers or
producers incorporating processes of food traceability and quality control. This
research will explore the business model, offerings, the targeted market, and
resource requirements to offer the farm-to-table concept to Vietnamese consumers.
In order to achieve these expected outcomes, the research has two objectives:
- Objective one is to obtain a better understanding of the agro-food system in

Vietnam. This knowledge and the practical insights drawn from it will validate
the feasibility of the farm-to-table solution to connect farmers and consumers
directly and facilitate traceability and transparency in the food system. This is a
problem-solving process used in order to create an innovation addressing food
safety and building food trust.
- Objective two is to validate the commercialised idea of a farm-to-table supply chain
for fresh food, estimate market size, analyse competition and establish a business
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Chapter 1. Overview
model for food trust building. These findings will establish fundamentals for the
commercialised intent that offer products and services to targeted customers.
3. ASSUMPTIONS
Outcomes of this research will be materials to design and deploy a business case in
Vietnam. Therefore, in order to answer Vietnamese’s daily questions regarding
where, how and from whom they can purchase quality and fresh food, this research
start with two fundamental assumptions from the supply side and the market side.
- In terms of supply, this research assumes that there is a source of quality agro-
food in Vietnam - the country has experienced a long history of agricultural
development. This research will identify producers delivering high-quality food and
understand how they achieve these standards. By collaborating with these
producers using good practices, this project will establish the farm-to-table supply
chain to mitigate food safety concerns and connect them with consumers directly.
- In terms of the market, the project assumes that there is a niche market or a
particular customer segment for this innovative solution. In the niche market,
consumers are looking for quality food to fulfil their families’ daily consumption
and are willing to pay higher prices for sustainable production. The market and
product validation and development process will identify the customer segment,
value proposition, sale channel, and adopted technology.
4. SCOPE
Fresh food is food - particularly vegetables, fruit, fish and meat - which has not been
preserved, spoiled or processed. The research begins by exploring the vegetable supply
chain, including identifying the pros and cons of the minimum viable product
development and the business model establishment. Firstly, vegetables are a diverse
and scalable category. They come from many different parts of plants including leaves,
roots, tubers, flowers, stems, seeds and shoots. Each group provides their own unique
nutrients. Secondly, the vegetable food category has a high frequency of consumption
with individuals consuming multiple serving a day, it impacts almost all citizens, and is
not confined to only vegetarians or meat eaters. Lastly, the fresh vegetable has short
supply chain with less complexity than others (The World Bank, 2017). However, it has
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Chapter 1. Overview
high level of perishability and very short shelf life – one or two days with normal
conditions and a week with refrigerators. By building a farm-to-table supply chain for the
vegetable category as an experiment and innovation, this project will create a solid
foundation before expanding this business to other food categories.
In terms of the geographic market, this research will evaluate the possibility to deploy
a farm-to-table concept in Ho Chi Minh City - the largest economic centre of Vietnam.
The city is famous for its dynamism, modernity, and young entrepreneurial spirit. It is
also a big market with 8,224,000 citizens (APEC 2017 National Secretariat, 2017),
excluding temporary residents.
5. STAKEHOLDERS
A stakeholder is a person, group or organisation that has interests or concerns in the
project (Blank & Dorf, 2012). It is critical to identify stakeholders in this project because
of the commercial intent of this research. This research categorises stakeholders into
four main groups. These are users/customers, intermediaries, influencers and
enablers as shown in Table 1. In order to develop the farm-to-table supply chain, the
research will encompass dialogues with representatives of these key stakeholder
groups or review literature relating to them to understand their existing behaviours,
perspectives and expectations.
Table 1. Key stakeholder groups of the farm-to-table project
Users/Customers Intermediaries Influencers Enablers
- Targeted - Producer - Media and social - Technology

consumer organisation or network; developers;
segments; cooperatives; - Food and - Regulatory
- Targeted farmers - Food delivery agriculture agencies;
who can produce service firms; centres; - Venture capital
and deliver - Safe food retailers - Quality and funding
quality food. or organic food assurance partners.
retailers. institutions.
Source: Author’s compilation
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Chapter 1. Overview
6. THESIS STRUCTURE
Chapter 1. Overview
This chapter has given a brief introduction to the innovation and commercialisation
process of the farm-to-table supply chain. The balance of the thesis proceeds as the
chapters follow.
Chapter 2. Introduction
This chapter sets up the scene of the project report by providing the macro-
environment of the food safety problem in Vietnam and defining opportunities and
potential threats to a farm-to-table supply chain for fresh food. To extend basic
knowledge, the relevant literature and established theories are discussed to identify
the research gaps of prior scholars and the approach of this research as well as
guidelines of the business model development.
Chapter 3. Methodology
This chapter describes how this research was conducted. It consists of the research’s
design and methods to obtain, proceed and analyse data. This research employed
both qualitative method and quantitative method to achieve its objectives.
Chapter 4. Findings and Analysis
This chapter presents the results of data gathering and analysis and interprets what
these findings mean to the farm-to-table project.
Chapter 5. Discussion
The main objective of this chapter is to discuss the major findings and what these
mean to the business case construction. The discussion includes evidence-based
reflections on the project’s feasibility and assumptions as well as opportunities and
threats identified in the introduction chapter.
Chapter 6. The Business Case
This chapter consolidates all research findings, discussions and decisions into one
concise report to communicate about the business case to key stakeholders. The
report consists of processes and systems of the business model design, the targeted
market, product development and resource requirements.
Chapter 7. Conclusion
This chapter presents a summary of the research and decisions of the business case
to establish and deliver a farm-to-table supply chain in Vietnam. It also points out the
next steps that the researcher will take to achieve the project’s vision.
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CHAPTER 2. INTRODUCTION
2-6
1. FOOD SAFETY IN VIETNAM

1.1. Social concerns
Food safety and foodborne diseases have been a major social concern in Vietnam in
recent years. According to the Vietnam National Assembly report reviewing food safety
in the 2011-2016 period, at the nationwide level, annually there were 168 food
poisoning incidents recorded, 5,068 Vietnamese were affected, and 28 victims died
(Le, 2017). Recently, the number of food poisoning incidents and fatalities have risen
again after many years of decline, shown by the data presented in Table 2. This
indicates that food safety has been still a big concern in Vietnam. Moreover, the
numbers may be just the tip of the iceberg because only visible events involving
concentrated groups of people were received media and government attention (The
World Bank, 2017). The actual number may be many times higher.
Table 2. Vietnam food poisoning report 2014 - 2017
Year Food poisoning event Affected victim Fatalities

2014 189 5,100 43
2015 171 4,965 23
2016 129 4,139 12
2017 139 3,869 24
Source: The Food Administration of the Ministry of Health, Vietnam, 2018
Consequently, consumer confidence in food has been seriously affected. In urban

areas, city dwellers, high-income earners, and youngsters were more frequently
anxious about food safety than rural dwellers and low-income earners (The World
Bank, 2017). The national survey about Vietnamese high-quality products 2018
reaffirmed the picture of food and agro-products consumption. Consumers are
worrying about chemicals or bacterial contamination in food, together with concerns
of faked and mislabelled products (Hien, 2018).
1.2. Government controls

Vietnam is not in the state of a food safety crisis relating to public health, but the risk of
foodborne illness is real (The World Bank, 2017). Policymakers attempted to strengthen
the regulatory framework, issuing a Law on Food Safety 2010, but the inspections and
2-7
punishment approaches could not satisfy Vietnamese consumers (Nguyen-Viet, Tuyet-

Hanh, Unger, Dang-Xuan, & Grace, 2017; The World Bank, 2017). Recently, there were
significant changes in food safety policies. From the market side, measures
consolidating and modernising traditional market policy were put in place to re-organise
food market and induce a shift in shopping practices of consumers from daily visits at
wet markets to weekly shopping at supermarkets and other modern channels
(Wertheim-Heck, Vellema, & Spaargaren, 2015). From the supply side, empowering the
private sectors, the government encouraged consolidation and integration of production
and distribution systems to reduce reliance on small-sized producers, alongside
investment in good practices and adopted technologies (Dung & Hiep, 2017). These
policies aimed at a well-balanced macro-environment and facilitated sustainability in
agriculture and food supply chains.
1.3. Economic impacts

Land fragmentation and over-intensive use of synthetic inputs are two significant
factors of agro-food production in Vietnam directly affecting food safety.
Figure 1. Percentage of farm units by landholding size in 2011
>= 2 ha
6%
Farm =< 0.2 ha

0.5 =<Farm < 2 ha
35%
25%
0.2 < Farm < 0.5 ha

34%
Source: The World Bank, 2016

Fragmentation comes from the fact that 90% of agricultural land is under agricultural
household farms dominated by smallholders, only about 6% under the enterprises
and other entities. As illustrated in Figure 1, farm-size under 0.5 ha accounted for
approximately 70% of total agricultural land in Vietnam (The World Bank, 2016).
Unsurprisingly, 90% of the vegetables in Vietnam were produced by millions of these
small-scale operation farms (Nguyen-Viet, Tuyet-Hanh, Unger, Dang-Xuan, & Grace,
2017). The fragmented system creates risk management challenges if stakeholders
2-8
along the chain do not comply with standards of producing, processing, distributing
and selling food.
Secondly, Vietnam’s agriculture growth relies on intensive use of natural resources,
fertiliser, and pesticides (Dung & Hiep, 2017). Table 3 shows despite the very small
average farm-size in comparison with other developing nations across the world,
Vietnam farms consumed 404 kilograms of fertiliser per hectare annually. The number
was less than farms in China, but much higher than farms in other countries (The
World Bank, 2017). The old-fashioned practices of taking advantage of cheap inputs
and utilising natural resources have come at the expense of both the environment and
society. These affect food safety and farmers’ profitability downstream. Employing
quality standards or hi-tech methods in production is expensive for small producers
because the agricultural income is their main financial source and they are usually at
the bottom of the food value chain (Cadihon, Moustier, Poole, Tam, & P.Fearne, 2005).
Table 3. A global snapshot of small farmers
Average farm size Literacy rate Fertiliser consumption

Country
Ha % Kg/Ha/Year
Mexico 25 93% 54.5
Peru 20 90% 106
Russia 50 100% 16
India 1.6 63% 167
China 0.7 94% 504
Indonesia 0.9 93% 118
Vietnam 0.5 93% 404
Source: World Bank Group, 2013
In addition, Vietnam now is a member of many international free trade agreements.

The domestic market is opening to affordable and quality products from other
countries. If there is no action to address food safety to gain consumer trust back, it
will potentially pose economic threats and disadvantages to the agro-food production
sector. Some economic experts are now worried about a scenario where local people
will not trust local products (Huyen, 2016). Unsafe food will encourage consumers to
switch to imported food. The effects of this can be unpredictable and harmful to many
products, markets and sectors.
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1.4. Media influence

Media reports about food safety have escalated in both press and social networks.
The significance of media coverage demonstrated that Vietnamese people are
seriously concerned about food safety. This puts pressure on all stakeholders of the
food system doing all they possibly can to ensure food safety. There are many good
daily communications aimed at building trust around food. These programs positively
guide consumers on how to make their purchasing decisions and how to respond to
biased and unreferenced news. For example, on 1 April 2016, the Vietnam National
Television (VTV) launched an official programme entitled “Say no to contaminated
foods”, which was broadcasted daily during two primetime slots – 7:30 am and 8:30
pm from Monday to Friday (Nhan, 2016). The media here were playing the role of
raising awareness and changing behaviour in both supply and consumption. This
helps to orient the community’s awareness of a sustainable agriculture sector and food
supply chain.
1.5. Environmental footprints

Environmental issues are increasingly important because of the intensive use of
natural resources and agro-chemicals. Issues such as land degradation, water
pollution, and biodiversity loss are causing downstream productivity losses and
leading to requirements for more pesticides and fertilisers in production (The World
Bank, 2016). The unsafe production methods may be temporarily profitable, but risks
and hazards may be placing costs on human health. For instance, frequent and late
chemical spraying of crops has contributed to raise both cost of production and
consumer anxiety about pesticide residue in rice, tea, fruits and vegetables. The
challenge to the Vietnam agro-food system is how to use fewer natural resources and
harmful chemical inputs, but still generate and deliver food and other agro-products
with reliability and assurances associated with quality, safety and sustainability.
1.6. Technological trend

Since Vietnam made the decision on the master plan of utilising hi-tech agriculture in
2015, adoption of more technologies for farming have expanded (Dung & Hiep, 2017).
Agricultural technologies such as indoor farming, hydroponics, renewable energies,
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and robotics are being developed by local talents and are also employed from Japan,
Israel, and South Korea to meet food standards and improve productivity. Vietnam
also launched a financial solution to provide a credit package worth 4.4 billion USD for
enterprises and individuals engaged with hi-tech agriculture (Vietnamnews, 2017).
With the national efforts, future growth of the agro-food sector aims for higher levels
of efficiency, innovation, diversification, and value added.
Figure 2. Macro-environment analysis summary
ECONOMY TECHNOLOGY
SOCIETY
Food A fragmented system High cost of

poisoning with millions of technological methods 1. Lack of trust
incidents smallholders and confidence
in quality of
Intensive-uses of Requirements to
Fears of food- government’s food;
borne diseases synthetic inputs &
supports 2. Consumers
natural resouces
concern about:
✓ Ability to
Raising consumers’ Failure of punishment Water pollution
awareness and control Biodiversity loss deliver quality
food;
Putting pressure Time-consuming ✓ Integrity of
on suppliers processes of Land degradation
the food
consolidation
chain.
MEDIA POLICY ENVIRONMENT

To summarise impacts of the food safety situation on Vietnamese people, the cause-
effect approach was employed as illustrated in Figure 2. The fish-borne diagram collects
six components of the macro environment that contribute to the lack of consumers’ trust
and confidence in quality of food. It also raises consumers’ concern about the ability to
deliver quality food and the integrity of the food chain in Vietnam. From the cause and
effect approach, the next chapters of this thesis will access the food supply chain and
value chain to address the concerns. This task is essential to establish a business
solution addressing food safety in the short-term and building food trust in the long-term.
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2. BUSINESS OPPORTUNITIES AND CHALLENGES

2.1. Opportunities
Vietnam experiences increase in income and urbanisation.
Over the coming decade, demographic, social and economic factors of Vietnam will
alter. Vietnam will experience further urbanisation. The World Bank (2016) forecasts
that there are more than 50 million urban residents, accounting for a half of the
population by 2025, compared with 33 million urban residents, approximately 35% of
total population in 2017. In addition, 33 million Vietnamese are forecast to join the
middle-income class who will consume, on average, $10 US and more per day by
2020. This number increases to 50 million by the mid-2030s, compared with 10 million
in 2015 (Nielsen Vietnam, 2016). This transformation is creating a potential consumer
market where power is establishing in the hands of the wealthier, more demanding
and new urbanised middle-income class. This is resulting in greater expectations of
safety, quality, and integrity of food.
Vietnam food pattern and expenditure are shifting.

Improving the standard of living and growing awareness of nutrition and health are
changing dietary patterns. The change drives growth of the food industry and
expenditure of domestic consumers on food. Vietnam has reduced consumption of rice
since 2008 and increased consumption of meats, dairy, fruits and vegetables, and
processed foods (The World Bank, 2016). Changing consumption is translating into
changes in food spending. Between 2002 and 2012, Vietnamese household
expenditures on food rose by 51% overall; rural households rose by 53% while urban
households rose by 41% (Nielsen Vietnam, 2016). The alteration in consumption
patterns and the increase in expenditure indicates a demand for high-value food. This
creates incentives for high-quality food production and requires more attention to be
given to food safety and nutrition.
Consumers are more proactive and empowered.

In “The need for speed giving Vietnamese consumers what they want” report published
by Nielsen Vietnam (2016), the portrait of a typical Vietnamese consumer is described
simply in four characteristics that “I have power to buy, it’s all about me, I’m on the move,
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and connect me to the world”. It showed the shift from passive to empowered consumers
– maybe because of the increase in income, abundant choice or connected lives in the
era of the Internet, smartphones and social networks. In the food industry, consumer
expectations are increasing with their growing knowledge and awareness of safety,
health and sustainability (Price Waterhouse Cooper, 2015). These phenomena mean
the food system will face disruptive innovations and new business models will be
required to satisfy customers’ demands and expectations.
New technologies break through the food system.

Currently, the Internet had covered 53% of Vietnam population, approximately 50 million
citizens (Vietnam Internet Association, 2017). The ownership of smartphones has
surged across the nation for the last five years. In urban areas, 84% of residents use a
smartphone among the 95% of people who are using a mobile phone (Nielsen Vietnam,
2017). This expansion creates a promising environment for new technological
applications in many industries. In the agro-food sector, technological advances are
leading to the creation of new applications that manage hazards of food safety and
integrate information across the supply chain. Food companies can use hi-tech solutions
to maintain the quality of high-value perishable food, do traceability from farm-to-fork,
and allow consumers to scan products in shops and bring up information about its origin
and journey to consumers as well as information about new and different ways to
prepare and use the products (Price Waterhouse Cooper, 2015). These significant
breakthroughs can be seen as solutions to make the food system traceable and reliable
to Vietnamese consumers.
2.2. Challenges
Food supply chain is fragmented.
The fragmented and complicated structure of the Vietnamese agro-food sector
creates numerous barriers in providing technical consultation about sustainable
practices, monitoring stakeholders’ compliance to regulatory and standards, and
deploying hi-tech adoption (The World Bank, 2016). Food is traded across many
stakeholders from growers, packers, processors, distributors, retailers, restaurants,
ingredient suppliers to importers. Although technology can facilitate traceability and
transparency in food systems, how to implement the scientific advances to trace food
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all the way back to its original source is still a big challenge in Vietnam. Even though
consumers may know where to purchase food from, they may be unaware of the
quality standards in place. This raises the second concern of how to make all the
information transparent and reliable.
Financial rewards are barriers.

The complexity and fragmentation of food supply chain results in very high transaction
costs and time-consuming processes in addressing food safety (The World Bank, 2016)
because many participants in the food system are difficult to identify and control. This
challenge will create unpredictability and uncertainty. For example, one barrier to
implementing food traceability applications is a lack of records. It would be costly for
enterprises to build data systems covering all participants and making the data
consistent and accurate (Kairos Future, 2018). Yet at the same time, in the market
consumers are often looking for the best prices for their food products. Therefore, it is
critical to discover consumer willingness to pay higher-prices for high-quality products
and consumer surplus - which is the difference between what consumers are willing to
pay and the actual cost of good practices in production.
In short, the socioeconomic transformation is creating a new business context that has
not existed before in Vietnam. On one hand, food safety or food trust now is not only
an issue of mandatory compliance to protect consumers but also of competitive
advantages for food businesses to satisfy their empowered consumers. On the other
hand, to tackle the fragmented system, the farm-to-table supply approach or supply
chain integration must deal with the above-mentioned challenges to make the food
supply chain traceable and reliable.
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3. GROUNDED THEORY
3.1. Supply chain management
A supply chain relates to the processes that move information and materials to and
from the manufacturing and service establishment of the firm (Jacobs & Chase, 2013).
For tangible products, that includes the logistics system to move products physically and
the warehouse and storage system that positions products for quick delivery to the
customers. Any likelihood of disruption that would influence the ability of the firm to
supply products or services constantly creates supply chain risks.
In addition, under the intensive needs of human beings and the high-level of uncertainty
nowadays, the term “sustainability” is widely used. In this research, sustainability is the
ability to meet current resource needs without compromising the ability of future
generations to meet their needs (Jacobs & Chase, 2013). To accomplish sustainable
goals, a business strategy will consider social, economic and environmental criteria
(Jacobs & Chase, 2013; Neven, 2014). Though some arguments raise the potential of
inefficiency due to the focus on these conflicting dimensions, international successful
examples such as Whole Foods Market or Clif Bar (Jacobs & Chase, 2013) proved
these sustainable factors can be converted into assets and reputation for any
enterprises. Together with economic outcomes, environmental protection and social
responsibility are becoming critical standards for food suppliers to access high-end
markets and command on higher-rewards (World Bank Group, 2016).
3.2. Sustainable food value chain framework

Since the first introduction of value chain concept by Michael Porter in 1985, there have
been numerous variations of the concept. To analyse the Vietnam food system, this
research will employ the sustainable food value chain framework developed by the Food
and Agriculture Organization of United Nations for developing nations as modified and
illustrated in Figure 3.
The sustainable food value chain is “the full range of farms and firms and their
successive coordinated value-adding activities that produce particular raw agricultural
materials and transform them into particular food products that are sold to final
consumers and disposed of after use, in a manner that is profitable throughout, has
broad-based benefits for society and does not permanently deplete natural resources”
(Neven, 2014, p.6).
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Figure 3. Overview of sustainable food value chain framework
Economic
Social elements
Extended value chain
Cultural tradition;
Core value chain Nutrition and health;
Production Worker right and safety …
Input
provider
Management
Aggregation
Sustainability
Finance
Processing
Environmental
Service
provider Distribution elements
Water & soil conservation;
Food loss & waste;
Biodiversity …
Market
Source: Author’s summary from (Neven, 2014)

The original concept of Michael Porter (1985) described value-added activities at the
firm-level including inbound logistics, production, outbound logistics, marketing, sales,
and service. The sustainable food value chain framework customises into the food
industry. The framework addresses value-added activities of food production,
processing, and distribution within the sustainability strategy, and this strategy
contains social, economic and environmental dimensions. “The full range of farms and
firms” indicate all actors who directly get involved to deliver products to end-users.
Their behaviour and performance strongly influence the quality of food.
The framework clarifies four core value-added activities including production,
aggregation, processing, and distribution. The aggregation step is a unique point of
fragmented food systems. “Management” refers to the linkages among actors during
the chain. This contains elements such as information exchange, price determination,
standards, payment mechanisms, contracting relationship, market power, and market
systems. Support providers contain physical inputs (seeds, fertilisers, chemicals), non-
financial services (storage, transport, laboratory testing, marketing, or retailing), and
financial services. Finally, consumers on markets will determine success of the chain.
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3.3. Business model development

What is a business model?
Companies commercialise new ideas and advanced technologies through their
business models. Oxford Dictionaries defines a business model as “a design for the
successful operation of a business, identifying revenue sources, customer base,
products, and details of financing” (Oxford University Press, 2019). The design is a
tool or a framework that can describe the systems and processes behind the firm to
create and deliver value to customers and to capture value for the firm (Spencer,
2013). This establishes an agreement about the exchange of value when two parties
do business together. The agreement frames expectations and reactions of the firm
and customers. Thus, the fundamental purpose of a business model is value creation
for both customers and the firm.
What are the concerns of a business model?

An innovative solution or a new business starts with hypotheses about customers and
markets; and then develops a business model in alignment with the hypotheses. The
process confronts challenges of feasibility, viability and sustainability (Spencer, 2013).
- Feasibility and viability are the two basic concerns of a business model. Will
the business model work effectively? Will customers find offerings valuable? Will
customers be willing to pay?
- Sustainability relates to the long-term. Will it create repeatable purchase
patterns? Will it differentiate from competitors and new entrants? Will it be copied
easily? How will it maintain customer relationship and attract new ones?
The process of product and market validation is time-consuming and costly. In order
to tackle these challenges of a business model development, this project will employ
the lean start-up approach introduced by Ries (2011) to minimise cost and time to
market. In this approach, to reduce the risk of spending a large amount of investment
for a new venture, Ries (2011) presented the notion of the minimum viable product
(MVP). MVP is a prototype that implements the most necessary features of the product
to test fundamental business hypotheses and get customer feedback in early stages.
This allows a new business to focus more on knowing who their customers are, what
their current habits are, and how to attract and retain them. Applying this method, this
project can have early interactions with customers.
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What does a business model consist of?

A good business model clearly explains the core logic behind the system, showing
how it works to create value and capture value (Trimi & Berbegal-Mirabent, 2012).
How do resources come together to offer products or services to consumers? How will
the firm get revenue? Will customers pay for it? To answer these questions and
support the creation of a new venture, the business model canvas is a conceptual
instrument proposed by Alexander Osterwalder (2008) that helps make decisions for
business model development. The business model canvas is structured in nine
building blocks including 1) key partners, 2) key activities, 3) key resources, 4) value
proposition, 5) channels, 6) customer relationships, 7) customer segments, 8) cost
structure, and 9) revenue streams as illustrated in Table 4.
Table 4. Business model canvas framework
Customer
Key activities
Strategic Value relationship Customer
partners propositions segment
Key resources Channels
Cost structure Revenue stream
Source: Alexander Osterwalder, 2010
This graphical tool allows stakeholders to understand how the business articulates the
core mechanisms and processes underlying the business model (Trimi & Berbegal-
Mirabent, 2012). Additionally, adapting and validating business hypotheses on the
business model canvas helps to develop innovative solutions by considering each
element of the business not only individually but also as a whole. Therefore, outcomes
of this research will be reflected on this framework to develop the business case.
Furthermore, the idea of this project is to create a farm-to-table marketplace to connect
farmers and consumers more directly. Then this research considered three building
blocks consisting of strategic partners, value proposition and customer segment as the
backbone of the business case’s construction. Other elements were elaborated further
basing on this research’s findings and discussions.
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4. APPLICATIONS OF GROUNDED THEORY

4.1. The vegetable supply chain in Ho Chi Minh City
The previous literature focuses on marketing channels.
Since the modern distribution of supermarkets, convenience stores, and e-commerce
sites appeared in Vietnam, the food system had separated into traditional, modern and
online channels (Cadihon J. J., Moustier, Poole, Tam, & P.Fearne, 2006). Three retail
marketing channels are currently operating in parallel as depicted in Figure 4.
Figure 4. Retail channels in Vietnam and contribution in 2018
Retail industry
Traditional channel Modern channel E-commerce

(85%) (10%) (5%)
Wet market Supermarket
Groceries Shopping
stores mall
Convenience
store
Source: Author’s summary from (EU-Vietnam Business Network, 2018)
The traditional channel accounted for 85% of total retail industry (EU-Vietnam
Business Network, 2018) and 90% of vegetable consumptions (Werthesm-Heck &
Spaargaren, 2015). The traditional channel predominates because of its long historical
use and development, convenience, and affordability. This unique retailing concept is
played out in the marketplace, where people meet and engage with others in daily life.
Even though supermarkets and some e-commerce sites have penetrated rapidly in
Vietnam recently, these modern retail formats have not yet replaced the traditional
ones as Vietnamese policymakers expected (Wertheim-Heck, Vellema, & Spaargaren;
The World Bank, 2017). Previous studies gather, analyse and interpret the vegetable
supply chain into two main marketing channels as illustrated in Figure 5 next page.
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Figure 5. Traditional and modern vegetable supply chain in Ho Chi Minh City
Traditional chain Modern chain
Transactional relationship Farmers/Producers Farmers/Cooperatives
Rural aggregators
Contractual relationship
Rural wholesales
Wholesales/
Urban wholesales Food Companies
Wet markets Supermarkets Online
Consumers Consumers
The main source of vegetables in Ho Chi Minh City comes from Lam Dong province –
a highland area located over 250 km northeast of Ho Chi Minh City (Cadihon J. J.,
Moustier, Poole, Tam, & P.Fearne, 2006). In the traditional channel, wholesale markets
are the main entry points for suppliers of fresh food to the city. Three main vegetable
wholesale markets in Ho Chi Minh City are Binh Dien, Hoc Mon, and Thu Duc. They
distribute to the network of approximately 200 retailing open-air markets around the
city where consumers visit daily and shop (Cadihon J. J., Moustier, Poole, Tam, &
P.Fearne, 2006). On the other hand, the modern distribution chain is shorter and
usually involves direct links with producers, cooperatives or agro-food enterprises.
These intermediaries between individual smallholders and modern retailers provide a
role of quality assurance, and reliable supply for safe vegetables (Moustier, Tam, Anh,
Binh, & Loc, 2010).
Though the prior researchers generally recognised some advantages of the modern
channel over the traditional channel, supply chain risks have existed in both channels.
Firstly, due to the high perishability levels and long distances from production to
consumption areas, logistics and warehouse conditions are insufficient (Lancon,
Sautier, & Anh, 2014). Most products are usually carried in unrefrigerated trucks, so
quality and waste remain significant issues. Secondly, weak linkages and poor
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collaboration of stakeholders can result in inefficiencies or disruptions relating to price

stability, supply stability, lead-time from order to delivery, and quality management
(Cadihon J. J., Moustier, Poole, Tam, & P.Fearne, 2006).
4.2. The vegetable value chain in Ho Chi Minh City

A summary of prior works of literature and updated information of the vegetable value
chain in Ho Chi Minh City are illustrated in Figure 6.
Figure 6. The vegetable value chain in Ho Chi Minh City
Production Aggregation Processing Distribution
Key Planning Rating Transporting

Activities Growing Aggregating Packaging Retailing
Harvesting Warehousing Branding
Key Farmers Aggregators Distributors Wholesales

Actors Cooperatives Cooperatives Agro-firms Retailers
Seeds suppliers Conventional producers

Input
provider Fertilisers suppliers Hydroponics producers
Pesticides suppliers Organic producers
Hi-tech applications Certification Traceability

Service
provider
Greenhouse VietGAP, GlobalGAP, Logistics (cool)
Irrigation system, etc. Organic USDA, etc. Warehousing
Finance Agricultural banks & Corporate investments Venture capital

Commercial banks in agriculture funds
The previous literature described in detail each stage of value-added activities and
actors involved in both core and external value chain. Commonly, individual farmers,
cooperatives or agricultural enterprises decide on the crops to produce. After that,
intermediaries – particularly aggregators, traders, cooperatives, distributors,
wholesales – collect commodities for classifying, packaging and distributing to
markets. In terms of providers, due to the expansion of new production methods such
as organics or hydroponics and the requirements of safety standards, there are many
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suppliers joining the vegetable value chain. Beside basic inputs such as seeds,
fertilisers or pesticides, new materials and services are emerging, for example,
greenhouse, automatic irrigation, product verification, financial services, etc. Overall,
the vegetable value chain is moving their sources of growth from use of natural
resources and artificial inputs to technological application and quality assurance.
4.3. Unfulfilled gap of prior literature

The prior literature about vegetable value chain in Vietnam lacks
important information.
In terms of management, prior work mainly focused on the flow of goods and
information exchange and resulted in recommendations about actor compliance and
coordination. The knowledge about value addition could not be established due to the
shortage of price and margin data among stakeholders in a volatile and fragmented
food system. A business case outlining the ways to increase the value of the food chain
is urgently needed. Steps to mitigate the food safety problem will not be successful
unless the proposed solutions increase smallholders’ income.
In terms of the market, customer satisfaction is the key performance indicator to
determine the whole chain. Previous scholars pointed out that Vietnamese customers
want timesaving, freshness, good prices, safety and certification when they shop for
vegetables (Hoi, Mol, & Oosterveer, 2009; My, Pieter Rutsaert, & Verbeke, 2017).
However, more detailed insights into customers’ shopping behaviour and
expectations remain unknown. It is essential for this research to understand
consumers’ fresh food purchase decision-making process and their shopping habits
to build the business model that can satisfy them. In addition, this research aims to
uncover consumers’ perspective about sustainable development in agriculture to
justify the ability to succeed of the sustainable model including social, economic and
environmental dimensions in Vietnam.
This research will address production method and consumer

satisfaction.
The literature review revealed the basic insights about vegetable supply chain and
value chain in Ho Chi Minh City in the end-to-end process from production to
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consumption. However, to achieve the vision of a business case, the research will
shift from marketing channel and actor approach into production method, quality
control, and consumer satisfaction approach. Food-safety mitigation and food-trust
construction must start from the green and clean production and end at consumer
satisfaction.
SUMMARY OF CHAPTER 2
The introduction chapter provided basic knowledge of the food safety problem in
Vietnam and discussed relevant literature of prior scholars. By assessing the macro-
environment, this chapter presented clearly the root causes of food safety. These main
reasons were non-compliance in a fragmented supply chain with involvements of many
smallholders and old-fashioned production practices with intensive use of synthetic
inputs and natural resources. Subsequently, this situation created consumers’ fears
and lack of confidence in the safety of food. Therefore, food safety and food trust now
are not only a mandatory requirement but also a competitive advantage to satisfy a
new consumer generation in Vietnam – who are urbanised, wealthier and more
demanding in safety and health. After profoundly understanding the problem and
figuring out opportunities and constraints of a farm-to-table platform, this chapter
introduced the theories that the research will apply including operation and supply
chain management, the sustainable food value chain and the business model
framework. Applications of these conceptual frameworks helped this research identify
unknown areas of previous literature and build the right approach to close the gap as
well as achieve the project’s vision and goals. In order to address food safety and gain
consumers’ confidence back, this research focuses on farmers’ production capability
and consumers’ satisfaction instead of sales channel description as previous scholars
had done. Conducting the research this way, the project aimed to justify the problem
and solution fit first before entering the stage of product and market development. In
the next chapter, the research methodology will be presented to explain how this
research explores the vegetable supply chain in Ho Chi Minh City and grasps
consumers’ insights in shopping fresh food.
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CHAPTER 3. METHODOLOGY
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1. RESEARCH DESIGN
The aim of this thesis is to explore a solution for the food system in Vietnam and how
to deliver the business solution to Vietnamese consumers. The idea to address food
safety and build food trust in Vietnam is realised through a farm-to-table supply chain.
To assess the feasibility of this proposed solution, this research was designed to
address two objectives as presented in Figure 7 below.
Figure 7. Design of the research
RESEARCH OBJECTIVES
▪ Assumption about supply ▪ Assumption about market
SUPPLY CHAIN MARKET & PRODUCT

EXPLORATION VALIDATION
▪ Qualitative method ▪ Quantitative method
▪ Interviews with farmers ▪ Consumer survey
RECOMMENDATION: THE BUSINESS CASE

▪ Business model design
▪ Market validation and development
▪ Product validation and development
▪ Resources requirements
Objective one was to explore the vegetable supply chain.
This objective aimed to obtain a better understanding of the food supply chain, value
chain and sustainable development in the scope of vegetable categories. The basic
approach was to concentrate on production methods and quality control.
- Assumption: There is a source of quality agro-food in Vietnam.

- Research question: How does this research define and navigate the source of
quality food? Or simply, how does this research find out farmers who are
conducting proper practices to produce safe and quality food?
- Research method: In order to yield important insights of vegetable supply chain
and value chain in the Ho Chi Minh City market, this research employed in-depth
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interviews with Vietnamese farmers who are growing vegetable to supply for Ho
Chi Minh City market. This qualitative method helped to discover the farmers’
practices, capabilities and their perspectives about food safety and sustainable
food production.
Objective two was market and product validation.
The process of market and product validation aimed to define the customer segment,
value propositions and the marketing channel. This research elaborated on these
expected outcomes further to decide technologies involved in the business case. The
basic approach focused on customers’ shopping behaviour and expectations to create
a product or service that can satisfy them.
- Assumption: There is a niche market or a customer segment for offerings of a

farm-to-table supply chain.
- Research questions: Positioning a product and its market is a complicated task.
It required this study to find out customers’ current shopping behaviour and
expectations. The research questions are:
• How does the target market currently solve the food safety problem?
• What are the barriers to change consumer’s behaviours?
• What key things does the proposed solution have to encourage consumers
to overcome the barriers of switching?
- Research method: This study validated the feasibility of the farm-to-table
concept by measuring consumers’ fresh food shopping behaviour and
expectation. The quantitative survey was conducted to collect the voice of
customers as much as possible.
During these two processes, data management software was used to support the
analysis and presentation of the findings. These research tools helped to organise the
large amount of data and encourage the research’s transparency. The qualitative
method used NVivo Plus 12 software to manage and interpret qualitative and verbal
data. The quantitative method recruited an online survey tool named Qualtrics to create
the questionnaire, collect responses and analyse quantitative data. Both research tools
were provided by Victoria University of Wellington with legal licenses.
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In short, although this thesis employed two research methods to address two research
objectives, these methods are interrelated. This is because the feasibility of this project
is dependent on the capability of farmers and the acceptance and satisfaction of
customers. Evidence-based findings of both processes will help this project minimise
risks of uncertainty and make the business case viable, feasible and sustainable. The
next two sections of this chapter describe the methodology used for each research
objective: qualitative method for objective one and quantitative method for objective two.
2. QUALITATIVE METHOD FOR OBJECTIVE ONE

2.1. Qualitative data collection
In-depth interview was the form of data collection.
The qualitative method aimed to explore farmers’ individual experiences and
perspectives in rich detail. The type of data collection used was in-depth, semi-
structured interviews in face-to-face format. This method obtained meaningful insights
into the vegetable supply chain.
What were the selection criteria for participation?

To increase quality of data and diversify participation background, it was crucial to clarify
who this research invited for interviews and why they were recruited. Production method,
business type and farm location were three criteria used when recruiting participants.
- Production method: The research approach concluded that discovering
production capability is the main pathway to the innovation. Production method
is therefore the first considered attribute. Production methods involving vegetable
growing include conventional practices and new adopted methods such as
organic, hydroponic or other standardised production.
- Business type: Is the farmer an individual, an enterprise or a cooperative? Each
type of business has different scale, capacity and supply chain operation and
management.
- Farm location: “Where the source of supply is” is a critical question to any supply
chain. It influences to operation and management of the whole chain as well as
defining the logistics system.
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How did this study conduct interviews?

Through personal network and farming forum on social network, the contact
information of potential candidates was obtained. Email invitation and phone call follow
up were used to introduce the research and invite their participation. Meetings occurred
in farmers’ offices, on their farms or coffee shops. The interview schedule included an
introduction of researcher and project first, followed by the terms and conditions of the
consent form. When they agreed and signed on the consent form, the interviews were
initiated. The length of the interview was about 30 to 45 minutes, depending on the
interviewee’s responses. Conversation was open and non-directive. Sometimes it was
essential to reword questions, drop or add sequences to make participants comfortable
to share their experience and thoughts.
2.2. Interview questionnaire design

What were the key performance indicators?
The key performance indicators used to measure these insights based on the theories
about supply chain management and food sustainability value chain framework as
presented in Table 5 and Table 6 on the next page.
- Table 5 includes indicators that measured farmers’ current farming practices.
These indicators focused on supply chain, value chain, production method and
challenges to farmers.
- Table 6 includes indicators that uncovered farmers’ awareness and expectation
toward the sustainable concept and potential solutions for food safety.
How was the interview questionnaire structured?

Based on the above-mentioned indicators, the interview questionnaire was designed
in two parts with ten questions.
- Part one is current farming practice.

- Part two is awareness and expectation.
The details of the interview questionnaire are presented in the interview schedule in
Appendix One.
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Table 5. Indicators of farmer’s current practices
Category Indicator Measurement focus
How many crops is the farmer growing? The ability to

Crop grow a single crop or multiple crops is critical to offer
a variety of vegetables.
Where does the food pass through to consumers?

Supply chain
Sale channel This is the journey of the vegetable beyond farm-
gates.
How do farmers interact with other actors to achieve

Coordination
supply chain efficiency?
What are farmers’ production methods to grow

Production
vegetables? How can farmers produce quality food in
Quality method
reliable manners?
control
Quality Do farmers employ any certifications? What are the
assurance costs and returns of certification?
Economy What do farmers do to increase their income?

Value chain Society and How do farmers minimise impacts of production on
environment food safety and environment?
Challenges Challenges What are the top three challenges to producers?
Table 6. Indicators of farmer’s awareness and expectations
Category Indicator Measurement focus
Food safety Food safety Farmer responses to food safety.
Sustainability Sustainability Farmer perspectives about sustainability and barriers.
Farm-to- Farmers’ thoughts about farm-to-table supply chain

Business table supply and the feasibility of the idea to them.
solution
Barriers Financial and non-financial concerns.
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2.3. Participants’ background

The study recruited nine participants who are growing vegetables in Vietnam to supply
the Ho Chi Minh City market. These interviews were conducted in June and July 2018.
According to the literature review, the main source of vegetable in Ho Chi Minh comes
from Lam Dong province – a highland area located 250 km northeast of Ho Chi Minh
City. The researcher visited farms and conducted five interviews in the region. Other
interviewees are farmers in Ho Chi Minh suburb and Dong Nai Province – a neighbouring
region of Ho Chi Minh City. The diverse background of participants benefited the
business case by providing different insights and supply regions. As shown in Table 7,
farmer information was classified into five attributes. These were production method,
farm location, business type, year of experience and farm size.
Table 7. Interview participants’ background
Farmer Production Farm Business Farm

Experience
name method Location type size
Dong Conventional Lam Dong Individual 20 years 0.6 ha
Quang Conventional Lam Dong Individual 20 years 0.7 ha
Trung Conventional Lam Dong Individual 20 years 0.6 ha
Duc Hydroponic Lam Dong Cooperative 5 years 5 ha
Nguyen Conventional HCMC suburb Individual 3 years 1 ha
Hoang Organic HCMC suburb Individual 8 years 1 ha
Viet Organic Dong Nai Enterprise 3 years 6 ha
Van Organic HCMC suburb Individual 5 years 3 ha
Huy Organic Lam Dong Individual 3 years 1.7 ha
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2.4. Qualitative data analysis

How was the Nvivo software applied?
Nvivo software is a tool to process and analyse qualitative data. This research started
to use the tool at the analysis stage. Data analysis was an iterative process. It went
through steps of importing, coding, querying, reflecting, visualising, and reporting data
as shown in Figure 8.
Figure 8. Qualitative analysis process
Import
Interpret Code
Visualise Query
Reflect
Source: QRS International, 2017
How was verbal data transformed?

There were two types of information containers when using Nvivo (QRS International,
2017). Firstly, nodes represent themes, topics, concepts, opinions or experience;
secondly, cases contained attributes of observation. This analysis created two nodes
and nine cases.
- Verbal data provided by interviews was transcribed, codified and categorised into
two nodes including “Node 1 – Current farming practices” and “Node 2 –
Awareness and expectation”. Coding process selected keywords, phrases and
ideas in interviewing transcriptions to arrange them into the structure of themes
(green boxes), categories (yellow boxes), and sub-categories (while boxes)
visualised by mind-maps in Figure 9.
- Farmers’ characteristics were arranged in nine cases corresponding to nine
interviewees.
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Figure 9. Coding structure of qualitative data
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How was the qualitative data assessed to prepare it for analysis?

In order to make the analysis stage succinct, time-effective and systematic, data
hierarchy assessment and cluster analysis were applied.
Figure 10. Hierarchy of qualitative data
Firstly, the hierarchy chart scanned data to evaluate if any nodes or child-nodes
have more coding references than others to identify prominent themes in this study.
One code reference represents one idea provided. The hierarchy chart shows the
comparison of nodes and child-nodes as illustrated in Figure 10. This chart describes
the well-proportioned picture of data allocation where existing behaviour exploration
accounted for 58% of coding references and perception and perspective occupied
42%. The balancing distribution made data categories sufficient for further analysis.
Secondly, the cluster analysis categorised participants who have similar phrases,
insights and background attributes. This assessment generated a tree diagram to
position participants in three groups. Group 1 includes Dong, Quang, Trung; Group
2 includes Hoang and Nguyen; and Group 3 includes Duc and Viet. Another two
participants Huy and Van are under consideration of where they belong to. Further
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investigation was implemented on the classification to define taxonomic relationships

and distinguish insights among groups.
Figure 11. Cluster diagram of qualitative data
Dong
(1)
Quang
Trung
Huy
Hoang
(2)
Nguyen
Van
(3) Viet
Duc
Based on the results of data assessments, especially the farmer classification, this
study employed other qualitative techniques to discover insight of each farmer group.
These techniques are the matrix coding technique, comparing the number of coding
reference among groups, and the word cloud technique, counting frequency of a word
or a phrase (QRS International, 2017) to work out farmers’ pathway of thinking and
main points they focused.
In summary of the qualitative method, the in-depth interview with Vietnamese farmers
provided insights of the vegetable supply system. These interviews justified some initial
hypothesis of the business case, rejected some and discovered unexpected
opportunities and challenges. The next chapter “Findings and analysis” will present
detailed outcomes of the qualitative method.
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3. QUANTITATIVE METHOD FOR OBJECTIVE TWO

3.1. Quantitative data collection
Consumer survey was the form of data collection.
If the objective is to test the business hypothesis and quantify elements of the business
model, a quantitative method should be implemented (Zikmund, Babin, Carr, & Grinffin,
2013). The market and product validation process involved numerical measurement to
generate insight from market; therefore, a consumer survey was employed to collect
historical information about consumer shopping behaviour and their expectation about
current problems and proposed solutions.
How was Qualtrics applied?

Qualtrics (https://vuw.qualtrics.com) is an online survey tool provided by Victoria
University of Wellington. This survey tool covers all stages of the survey from
questionnaire design, survey distribution, data collection, analysis to result
visualisation, as the cycle illustrates in Figure 12. Instead of starting at the analysis
stage like Nvivo software, the quantitative research had been employed using Qualtrics
since the questionnaire design.
Figure 12. Consumer survey process
Desgin
Report Distribution
Analysis Collection
Source: Author’s summary from Qualtrics
How was the consumer survey distributed?

The idea of this project was to use a digital platform to facilitate a farm-to-table supply
chain for fresh food. To target the right people who are familiar with the digital
environment, this survey chose social networks and email as main distribution
channels to approach them. Digital users who were interested in this research
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assessed the online questionnaire link sent to them. At first, respondents read the
information sheet for participants. They ticked the box "I agree to participate in the
survey” as the compulsory step, then they started to answer the questionnaire.
How was survey data recorded?

Qualtrics automatically recorded any survey responses that were 100% completed
by respondents as well as partially completed responses at the closing time. The
unedited information collected from respondents was the raw primary data of the
quantitative method.
3.2. Consumer survey design

What were key performance indicators?
The primary objective of this consumer survey was to provide insights for market and
validate the feasibility of the proposed solution. Addressing the complex and broad
objectives, the quantitative method concentrated on the essence of the project’s
commercialised intent: Is there a viable and scalable target market to deploy this
project?
Firstly, to obtain quantifiable numbers and enable the measurement of market insights
systematically, this study created a quantitative formula to calculate the size of the
target market or the potential revenue as illustrated in Figure 13. Variables directly
influencing to the size of this business were key performance indicators in this
quantitative research.
Sale Number of Average

transactions purchase ($)
Number of Traffic (Number Shopping Conversion

transactions of visitor) frequency rate (%)
In this formula, revenue or targeted market size is the multiplication of number of

transactions and average purchase occurring at a sale channel in one period. Average
purchase, also called basket size, is the average value of each purchase made by
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customers. Number of transactions is the count of bills or invoices in one period. This
figure is influenced by three other factors as explained below.
- Traffic to sale channel is the existing customer base who visit and potentially buy
products at points of sale.
- Shopping frequency is the average number of occurrence that customers visit the
point of sale.
- Conversion rate (%) is the proportion of visits that customers make purchases.
To increase conversion rate, this research needs to figure out influencing factors
in selecting stores and picking up products. The priority of the factors is the
decision-making process of consumers.
Secondly, this consumer survey closed the gap of previous literature regarding
consumers’ perspective about sustainability in agriculture. By measuring consumers’
attitudes and perspectives about the sustainable development in agriculture, this
survey addressed conflicts regarding economic, social and environmental dimensions.
The survey assessed the chance for farmers and food enterprise to convert the
sustainable concept into intangible assets or reputation.
Lastly, this survey collected some basic demographic and online shopping information.
Demographic information is consumers’ age, gender, income, education, occupation,
etc. to offer a better understanding of respondent background. This demographic data
concreted characteristics to narrow down which current or potential market segments
best fit to the business case and helped to estimate the market scale. Additionally, it
framed and defined customer segmentation in the very first stage of minimum viable
product development that will make marketing messages resonate with the targeted
audience when launching this project.
How was the consumer survey structured?

Based on the above-mentioned indicators, the consumer survey had five sections. The
details of the consumer questionnaire are presented in Appendix Two.
- The first section asked about consumers’ existing shopping behaviour. What
does consumers’ fresh food shopping journey look like?
- The second section asked about consumers’ confidence and their responses in
food safety situation.
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- The third section asked about consumers’ thoughts and expectations toward to the
proposed solution. What does the farm-to-table supply chain mean to consumers?
- The fourth section asked about consumers’ basic online shopping experience.
How is the consumer sample familiar with online transaction?
- The fifth section collected consumers’ demographic information.
3.3. Respondents background

There were 205 completed responses to the consumer survey.
There were 263 respondents who started the survey and 205 completed as
summarised in Figure 14. This online survey tool automatically implemented data
coding process.
Figure 14. Consumer survey distribution and record
Distribution channel Responses
Social media 150 22%
Email anonymous link 111
Smartphone scanning QR 2
code
78%
Total survey started 263
Survey completed 205 Completed Uncompleted
The majority of respondents were female.

The demographics information of this sample was illustrated in pie charts in Figure
15. This data visualisation points out that the sample demographics mostly were
female, working in offices, middle- and high-income classes, range ages from 23 to
40 years old, advanced education, and living in Ho Chi Minh City. The wide
involvement of female respondents (80%) was supportive for this research due to the
important role of women in feeding quality food to their families. Lastly, these
characteristic attributes were assessed in correlation with other variables to figure
out how consumer background was associated with their shopping behaviour and
expectation in the fresh food category.
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Figure 15. Sample demographics of consumer survey
3% 3%
20%
31%
Age
Gender (years old)
62%
80%
Male Female Under 23 23 - 30

31 - 40 Over 40
4%
4% 9%
31% 21% 4%
Income Location
(USD)
82%
43%
< 200 200 - 500 Ho Chi Minh City Ha Noi

501 - 1,000 > 1,000 Da Nang Others
1% 5%
6% 6% 16% 11%
14%
Occupation Education
72%
68%
Student High school and under

White-collar
Blue-collar Associate or certification
Self-employment Bachelor
Household
Retire/Not in workforce Master, PhD, Professional
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3.4. Quantitative data analysis

How was the quantitative analysis conducted?
This study aimed to describe what has already happened, figure out trends and anticipate
influencing factors. The descriptive analysis was implemented. The process of quantitative
analysis went through steps as illustrated in Figure 16 below.
Figure 16. Quantitative analysis process
Raw data
Editing Error
checking
Coding
Analysis
approach
Descriptive
analysis
Source: (Camm, et al., 2018)
Firstly, the data recording function of the Qualtrics survey tool collected both
uncompleted and completed responses. The editing phase checked the completeness
and consistency of data. The questionnaire was designed using multiple choices to
obtain consistent responses; therefore, editing for completeness was mainly
concentrated. The decision-making rule for completeness was analysing only the
processed data of 100% completed surveys, instead of plugging in alternative choices
of missing data or randomly selecting answers. By doing so, the analysis avoided
wrong statistical impacts on relationships among variables.
Secondly, during the opening time of this survey, data was recorded and codified
automatically and standardly. An advantage of Qualtrics is that it made data ready for
analysis immediately when respondents provided answers.
Lastly, the descriptive analysis transformed raw data into basic statistical figures such
as means, medians, or frequency. As recommended by Zikmund, Babin, Carr, & Griffin
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(2013), these figures were presented by some visualisation methods such as charts
and maps to work out data central tendency, distribution, and association. This data
transformation objectively changed data from the original form to a format that was
suitable to address quantitative research questions.
Hypothesis tests validated association between variables.

Besides statistical figures and data visualisation, this quantitative research
implemented hypothesis tests to justify relationship and association between variables,
especially demographic variables with behaviour or expectation variables. The
purpose of testing was to determine that the observed value was an accurate
reflection of the population or possibly an artefact of the sample surveyed (Zikmund,
Babin, Carr, & Grinffin, 2013).
Particularly, the statistical method employed Chi-Square test to determine if two
discrete variables are associated. If there is an association, the distribution of one
variable will depend on the value of the second variable. In contrast, if two variables
are independent, the distribution of the first variable will be similar for all values of the
second variable. The null hypothesis (H0) and the alternative hypothesis (H1) were:
- H0: Variable 1 [shopping behaviour or expectation] is independent or not
associated with Variable 2 [demographics];
- H1: Variable 1 [shopping behaviour or expectation] is dependent or associated
with Variable 2 [demographics].
Testing results paid attention to the statistical number of p-value in comparison with
the significance level (α-value). P-value is the probability value that the statistical
expectation for a given test is true. The α-value is the critical probability associated
with a statistical hypothesis test that indicates how likely the test supports a difference
or association between two variables. Commonly the α-value is equal 0.05 (Zikmund,
Babin, Carr, & Grinffin, 2013).
- If the p-value is less than or equal to the α-value, the variables are associated.
- If the p-value is greater than, it can conclude that they are independent.
In summary of the quantitative method, the consumer survey quantified key

performance indicators of shopping behaviour and expectation that directly influence
the business case’s scale and design. Additionally, this survey answered and
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measured the critical question of this project, focused on understanding what the
sustainable food production and the farm-to-table supply chain means to targeted
consumers. The next chapter “Findings and analysis” will present evidence-based
results of the quantitative method.
4. ETHICS CONSIDERATION
Integrity and objectivity
To comply with integrity and objectivity principles, the research obtained the
participation consent before conducting. Informed consent was implied through
voluntary participation for the anonymous survey and a signed consent form for face-
to-face interviews.
Confidentiality and anonymity

Participation in this research was anonymous. The survey with end-consumers did not
use any questions that made participants identifiable. The interviewees’ personal
information was also confidential. People involved in the interview research were able
to identify the participants but will not reveal any interviewees’ identity to anyone
outside this research team. The researcher took reasonable precautions to ensure that
participants' identities cannot be linked to their responses in the future. In terms of
reporting, names of participants were made up rather than using their real names.
Ethics approval
The ethical application for the research was approved by the Human Ethics Committee
at Victoria University of Wellington. The approval was granted under the human ethics
application ID 0000026341 on 18 June 2018.
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On these accounts of unknown knowledge of literature review, this research was
designed to address two objectives. Objective one is to explore the vegetable supply
chain in Ho Chi Minh City to assess the ability and integrity of growers. Objective two
is to embrace consumer insights in choosing stores and buying fresh food.
Considering the nature of data collection and the characteristics of the research
participants, the qualitative method was conducted to achieve objective one, and the
quantitative research was conducted to achieve objective two. In terms of the
qualitative study, there were 9 farmers who were interviewed. These farmers are
growing vegetables to supply Ho Chi Minh City and come from many different
backgrounds and locations. The conversations yielded in-depth insights to measure
performance indicators of farmers’ existing practices and expectations. In terms of
the quantitative study, there were 205 consumers who responded to the survey
completely. The sample demographic was almost female, white-collar, advanced
education, middle and high-income classes and living in Ho Chi Minh City. The survey
collected the voices of consumers to grasp the insight behind their purchase decision-
making and interpreted what the farm-to-table supply chain means to them. Lastly, in
order to process and analyse data effectively and transparently, this research
employed Nvivo software in the qualitative study and Qualtrics in the quantitative
study. In the next chapter, findings of both processes will be reported visually, and
the implications of these measurement focuses will be interpreted in association with
the research objectives, assumptions and the project’s intention.
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Chapter 4. Findings and analysis
CHAPTER 4. FINDINGS AND

ANALYSIS
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1. QUALITATIVE FINDINGS
This section presents findings of the food system exploration by interpreting farmers’
current practices in growing vegetables and their awareness and expectation toward
sustainability and the farm-to-table concept. These detailed findings were mainly
recapped in Table 9 and Table 10. These tables are cross-tabulated matrixes of farmer
groups (columns) and data categories (rows). Table 9 is a data arrangement of Node
1 – Farmers’ current practices, and Table 10 is data arrangement of Node 2 – Farmers’
awareness and expectation. Arranging data findings this way allowed this research to
produce rich insights regarding the vegetable supply system in Vietnam.
1.1. Farmers’ current practices

Farmers in Group 1 are significantly different to farmers in Group 2
and Group 3.
The findings in Table 9 differentiated Group 1’s current farming practices to the other
two groups’ approach. On one hand, Group 1’s existing practices and stories are
typical and commonly known stories as described in the literature review. Their
conventional production relies on intensive-use of natural resources, fertilisers, and
pesticides. Most importantly, agricultural income is their main financial source. This
situation is a result of their position at the bottom of the food value chain. Their ability
to access markets totally depends on aggregators. On the other hand, Group 2 and
Group 3 are deliberately attempting to enhance their value chain and to increase
productivity of their operation and supply chain management. They are challenging
the status quo of the agriculture and food system. By taking advantages of innovation,
diversification, and technologies, they create fundamentals for future growth, value
addition and sustainable income. These activities are occurring and advancing
gradually from Group 2 to Group 3. The only differentiation between Group 2 and
Group 3 is that Group 3 is comprised of enterprises or agricultural cooperatives. They
operate at a larger scale, have a more complicated go-to-market system and have
more sophisticated technologies than farmers in Group 2 do. The details were
presented in Table 9.
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Table 9. Node 1 – Farmers’ current practices

Category Group 1 Group 2 Group 3
Supply chain
- Growing 10 to 20 kinds of vegetable such as leafy, root or seasoning per

Multiple crop, - Growing 3 or 4 types per season
season with small quantity and different timeline that they can harvest twice
but… and harvesting at once with a
or once a week and offer a variety of product to market.
large yield.
- Owning direct-sell channel or - Owning direct-sell channel, also
Sale channel - Selling products to aggregators
contracting with retailers. contracting with retailers, wholesalers
such as traders or wholesalers.
(*) Supermarket or premium outlet or exporters. (*) Wholesale is optional.
(*) Retailer at wet market
Individual farmer Individual farmer Cooperative/Enterprise
Aggregator
Wholesale market Wholesale (*)
Traditional market (*) Retailer (*) Exporter

Retailer
Consumer Consumer Consumer
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- Implementing very complex go-to-

Coordination - Market access depends on
market systems.
aggregators or other middle-men. - Using direct-sell channels such as
websites, and social network fan- - Using direct-sell channels (websites,
- Non-contractual relationships.
pages to acquire consumers fan-pages and brick-n-mortar outlets)
- Earning money immediately and
directly and build database. to acquire customers and build
selling a large quantity of good,
- Contracting with retailers (safe consumer loyalty and databases.
usually the whole crop at once.
- Contracting with supermarkets,
- Crop planning or rotation is based and organic stores).
- Demand forecasting by database premium outlets and exporters.
on experience and intuitive
forecast and retailers’ orders. - Collaborating with wholesalers to clear
decision-making. It usually leads
stock and decrease wastage.
to "high yield, low price".
Production and quality control
Production - Conventional production using

method synthetic pesticides and fertilisers. - Organic, hydroponic and other safety standardised production.
- Some invest in greenhouse, - Increasing productivity and controlling pest by adopted technologies. They
can control environmental factors and soil nutrients to produce many types
irrigation system to increase
productivity and control pest, but it of vegetable at different scale and timeline to fulfil consumer demand.
is expensive to them.
- Some own Viet GAP or USDA - Because certification is the tool to
Standard and - Do not apply any standards.
Organic certification. access market, their products are
certification - Physical appearance is the key
- Some do not register certification verified comprehensively.
element to evaluate crop quality
because of high cost, but they - They apply different standards to
and price.
prove their safety through different markets.
- Good look, high price.
professional testing.
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Value chain
Economic - Aggregators will classify their goods - They are aware of value chain activities and try to upgrade their position
through marketing, branding and integrating activities.
value (Rate 1, 2 and 3) to sell to different
- Verified products are sold at prices two-fold higher than at traditional
customers at different prices.
markets, and three to five-fold higher if they hold an organic certification.
- Price increased by 20% to 30%
with greenhouse system invested; - Some value-added services such as farm visiting or education tours are
- Earn money immediately; don’t care experimented to diversify their sources of income.
what happens beyond farm-gates. - The direct-sell channel is the most profitable to them.
- They facilitate awareness of safety and organic production as well as
Social and
farming life to the community by educational and marketing activities.
environmental
- Implementing ancient practices such as compost, animal manure, cover
value - Starting to think of farmers and
crops to enhance soil, protect water source and natural enemies.
consumers’ health.
- Reducing or eliminating pesticides or synthetic inputs to protect the working
environment. Safety and health focus.
Producer organisation
- Some are members of agricultural - They are a cooperative member or an

forums or start-up clubs. entrepreneur.
- Do not join any producer - They use platforms to gather and - They establish a wide business
organisation. create production and retail network and integrate their value
- Family and personal network associations unofficially. chain activities.
focus. - It helps them to reduce the cost of - Large scale and reputation help them
market access and combine with have bargaining power in negotiation
another consumer databases. with suppliers and retailers.
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Challenges
- Market access and consumer - Market access and consumer - Consistent quality at a large scale,
demand. segmentation. especially in organic production.
- Higher price, better incentives and - Post-harvesting technology to - Customer acquisition, farm branding
income. reduce loss, normally 20% to 30%. and story selling.
- Productivity increase. - Post-harvesting technology and
logistic capability.
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1.2. Farmers’ awareness and expectation

Market access is the biggest challenge of farmers.
The high prevalence of market access for quality products at all farmer interviews
indicated the urgent need of a bridge between farmers and consumers. Taking Duc’s
sharing as a typical example, many farmers and agricultural firms are enthusiastic to
produce safe and clean food because farming is to make ends meet, but
commercialised capability in story-telling, branding and marketing are their thresholds
and limitations. His biggest concern is how to deliver real stories to consumers.
“Tomato are treated as my children; I grow it with all of my heart and effort” is one of
his cooperative’s marketing campaign. On account of this challenge to farmers,
connectivity between farmers and consumers for quality food is not only the value
proposition but also the toughest challenge to the business case.
Post-harvesting technologies and logistics capability are obstacles

of the farm-to-table supply chain.
Post-harvesting technologies and logistics capability challenge the farm-to-table
supply chain. Group 2 and Group 3 are producing quality products and building their
own go-to-market system. In the journey, their expertise is to manage production, but
post-harvesting phases are big obstacles now. Both groups agreed that there was no
specialised post-harvesting centre for classifying, stocking or packaging vegetables.
Currently, farmers or aggregators are doing it by themselves. As a result, this process
leads to 20% or 30% loss and damage on average as their estimation. More
importantly, despite contrary expression about the feasibility of the farm-to-table
concept, logistics capability to move stock from cultivating regions to cities and
around cities is a common concern because “fresh food does not like books or other
physical products, and it is very perishable” – Viet said. Thus, the business case
needs to take the beyond farm-gates challenges into account when developing the
minimum viable product.
Table 10 next page presented details of farmers’ awareness and expectation toward
food safety situation, sustainability development and the farm-to-table supply chain.
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Table 10. Node 2 – Farmer perspective and perception

Category Group 1 Group 2 Group 3
Consumer and food safety
- Consumer segmentation. Different segments have different perspectives

- "Consumers expect safer food, and shopping expenditure abilities, but generally, they are scared and bias
better tastes, cheaper price and about food safety. It is critical to define customer segment regarding their
good-looking products, but I am income, shopping habit, eating habit, occupation, and territory.
not sure they will pay a premium." - Consumer demand. They need quality food, but they lose their trust in food
and do not know where to acquire good food for families.
- Consumer motivation. “Some need safety because of their basic need.
Some want organic food because of their responsibility to environment and
human-beings.”
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Sustainability
- They are attempting to define - “Safe and quality first”. Balancing

“sustainable agriculture” and its productivity with social and
application in the Vietnam context. environmental footprints.
- “Safe and quality first”. Following - Applying adopted technologies to
- “I have heard of sustainable procedures or standards yields increase productivity, achieving
agricultural development on quality crops in the short-term and consistent quality and specification
media, but I am afraid that it enhances the farming and having a lower environmental
cannot upgrade our income.” environment in the long-term. footprint. For example, Viet is
- Farmer incentives are implementing a circular system of
questionable. They focus on cropping, livestock breeding, and
branding and marketing to improve consuming.
their income.
Farm-to-table solution
Farm-to-table - There are two contradictory opinions about

supply chain the feasibility of the farm-to-table solution.
concept - “If you can distribute products and - On the supportive side, they are using the
farm-to-table concept to pass by middle-men
guarantee a reasonable price, I
and control quality.
will follow any instructions or
- On the doubtful side, it cannot deploy due to
conditions in production.”
weaknesses of logistic capability and other
post-harvesting requirements.
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- On the top of their mind is a logistic system

Barriers and
to deliver products from farms to every
concerns
consumer. It is not efficient and cost-
- Better incentives for good and effective now.
safe products. - Market segment and size. Who will
- Trusted partners to take care sale purchase? Where are they?
and market. - Collective actions among farmers or supply
chain operation and management to offer a
wide assortment to consumers.
- They totally support packaging with a

Traceability
traceability QR code to scan and trace back
to farm locations, the farmer’s name,
cultivation method, standards or
certifications, seeding date, harvesting date,
- “I have no idea about traceability.” and expiry date.
- It is an important tool for farm branding and
food trust building.
- Some are implementing traceability on their
packaging now.
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1.3. Unexpected findings

Combination of Table 9 and Table 10, the qualitative analysis
discovered that some farmers are standing at transitional phases.
Cluster analysis could not identify what group label that Huy and Van are. By reflecting
their verbal sharing on tabulated matrixes of coding references mentioned above, the
project detected their transitional steps as illustrated in Figure 17.
Figure 17. Farmer’s categorisation
Shifting in production
Shifting in go-to-market
• Quang system
• Hoang
• Duc
• Trung • Huy • Van

• Viet
• Nguyen
• Dong Group 3
Group 2
Group 1
In Huy’s case, he moved from a heavy use of synthetic inputs (Group 1) to
standardised production (Group 2). Originating from Group 1 two years ago, he was
aware of risks and hazards to consumer health and farmer safety. Now he is orienting
his production to the organic method. “Safety and quality first” are in place on his
vegetable farm.
In Van’s case, she is switching from an old-fashioned business model with middle-men
to serving consumers more directly. She obtained a Master’s degree in cropping
agriculture five years ago. With her knowledge and working experience, she believes
organic production is a sustainable approach. Currently, her farm is applying ancient
methods to prevent crops from weeds and pests such as facilitating plants pollination
by attracting ladybugs and bees, protecting the farm from insect penetration by cover
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crops and biological methods as well as using compost and animal manure to enhance
soil nutrients. In November 2018, her farm successfully qualified USDA (United State
Department of Agriculture) Organic Certification after spending huge effort and
investment. With quality product in hand, for the coming future, she has been worrying
about marketing and branding to approach consumers directly.
As a result of qualitative analysis, this research concluded that Huy is standing at the
intersection of Group 1 and Group 2 while Van is at the intersection of Group 2 and
Group 3. Simplification of this farmer classification was visualised by three circles.
The size of each circle represents the relative quantity of the members of each group.
In the literature review section, the vegetable chain is fragmented and dominated by
millions of small-scale farms having similar characteristics to Group 1, then Group 1
circle is the biggest. However, despite holding a small market share, farmer network
pro-sustainability is expanding.
The important role of middle-men in a fragmented system was an

unexpected finding.
The most unexpected and surprising insight discovered during interviews was the role
of middle-men in the Vietnam agriculture and agro-food system. The initial idea
inspiring this project is to connect farmers and consumers directly with an ambition of
cutting middle-men out of the fresh food supply chain. In fact, interviewees in Group 2
and Group 3 emphasised and recognised the critical role of aggregators in the food
supply chain. They realised that it is not a good idea to eliminate middle-men totally. In
the interviewees’ experience, middle-men facilitate market access for agricultural
products because the majority of Vietnamese farmers are small, grow limited numbers
of products have no capability to market their produce. Middle-men create collective
actions in the fragmented system. The supply chain needs them to collect, classify
products and coordinate the flow of goods – particularly in respect to the ability of
supplying crops continuously to market (individual small farmers are unable to
continuously supply a single vegetable over a long time period, and middle-men can
aggregate a continuous supply by dealing with many farmers). Lastly, farmers in Group
1 prefer aggregators because aggregators pay money immediately after harvesting.
There is no credit term of 45 to 60 days like in the supermarket policy. The quick money
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cycle and re-investment in farms are critical to farmers’ production and livelihood. The
learning point is important to the business case.
In summary of qualitative findings, resulting from the findings summarised in matrixes,

the qualitative analysis leads to some interpretations. The most important result is
classifying farmers into groups to figure out differences and similarities between them.
It is critical for this research to address objectives and justify assumptions.
Furthermore, by embracing unexpected and emerging opportunities and challenges,
the project is now more insightful and realistic to elaborate further.
2. QUANTITATIVE FINDINGS
The quantitative findings presentation contains four sections. Each section has
different objectives and key performance indicators to uncover consumers’ current
behaviour, their perspective about sustainable production and their expectation of the
farm-to-table solution. In addition, basic insights of online shopping were collected to
evaluate potential of the farm-to-table platform.
2.1. Consumers’ existing shopping behaviour

The section aimed to discover the fresh food shopping patterns in Vietnam. It measures
key figures influencing to the target market size. These were shopping frequency,
average purchase, traffic to sale channels obtaining food, and factors influencing to
consumer decision-making as reproduced in Figure 13 below. These indexes were
tested in association with demographics to understand shifts and differences in
shopping patterns among responding groups.
Target market size Number of Average

(Sale) transactions purchase ($)
Number of Traffic (Number Shopping Conversion

transactions of visitor) frequency rate (%)
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While-collars and advanced educated shoppers prefer to acquire

fresh food once or twice a week.
Question 1 “How often do you and your family purchase fresh food?” defined the
number of times one customer went shopping in a week. As shown in Figure 18, the
majority of respondents (62%) make fresh food purchases every day or every two days.
The remaining 38% chose to shop once or twice a week, including every 3 to 6 days,
once a week. In comparison to the literature review, the numbers indicate the change
of fresh food shopping frequency from daily to once or twice a week.
Figure 18. Fresh food shopping frequency
40% 22% 13% 7% 15% 3%
Everyday Every 2 days Every 3 days

Every 4 - 6 days Once a week More than a week
Hypothesis test (p-value = 0) points out the association between shopping frequency
with two characteristic variables shown in Figure 19. In terms of occupation, the
percentage of white-collars and students who buy fresh food once or twice a week are
higher than that of other employment groups. In terms of education, advanced education
groups including bachelor and postgraduates go to the market to obtain fresh food less
often than others. 52% and 41% of them prefer shopping once or twice a week,
compared with 20% high-school group and 4% associate degree group.
Figure 19. Association of shopping frequency with occupation and education
Occupation Education
Students 38% Postgraduate 52%
White-collars 46%
Bachelor 41%
Self-
15%
employments
Associate degree 4%
Blue-collars 10%
Household/ Under/High school 20%

Retired
Every day or 2 days Once or twice a week
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Average purchase is around $10 USD relatively.

A shift in food consumption patterns translates to the change in food expenditure.
Question 2 quantified how many Vietnamese consumers are spending for one
shopping call on average. As illustrated in Figure 20, 37% respondents are budgeting
more than $10 US on an average purchase of fresh food, followed closely by the
middle-high basket from 5 to $10 US (34%).
Figure 20. Fresh food average purchase
4% 25% 34% 37%
< 2.5 USD 2.5 - 5 USD 5 - 10 USD > 10 USD

The literature review revealed that consumer power is consolidated in the hands of
wealthier and middle or high-income classes. It seems the higher the income, the more
expenditure on consumer products. However, the hypothesis test failed to support the
correlation between average expense per purchase and income (p-value = 0.1) for fresh
food. Meanwhile, the statistical hypothesis tests confirmed the correlation between fresh
food expense with education (p-value = 0). People who had obtained bachelor and
postgraduate degrees spend more on every fresh food purchase than other educational
groups. They account for 92% (71/77 responses) of more $10 US basket and 85% (60
out of 71 response) of a medium basket from $5 to $10 US.
Figure 21. Association of average purchase with education

80
10 17
Response (count)
60
4
40
50 54
34
20
9 7 3
0 4 3 4
< 2.5 2.5 - 5 5 - 10 > 10
Spend (USD)
High school Associate Bachelor Postgraduate
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If shoppers have less shopping frequency, they will spend a higher

average purchase for fresh food.
Furthermore, hypothesis test about shopping frequency and basket size figured out
the correlation between these two variables (p-value=0). There are 62% consumers
who acquire fresh food once or twice a week choosing the biggest basket sizes (more
$10 US per purchase). By contrast, 79% daily or every 2-days shoppers pick up smaller
fresh food basket (less $10 US per purchase). It means less frequency and bigger
basket size for fresh food acquisition.
Figure 22. Association of shopping frequency with average purchase
21%
62%
40%
25%
33%
12%
Every day or 2 days Once or twice a week
< 2.5 USD 2.5 - 5.0 USD 5.0 - 10 USD > 10 USD
Traditional markets and supermarkets are common channels, but

self-provision and farm-to-table are the most trusted ones.
Question 3 “Where do you mainly buy or acquire fresh food?” and Question 4 “How
much do you trust the safety of fresh food in the kind of outlets?” discovered where are
common places of fresh food acquisition and how consumers believe in these
channels’ food safety assurance.
In Figure 23, the combined column and line chart confirms prior works of literature that
traditional markets and supermarkets are the most popular places for consumers to
acquire fresh food. Shopping for a fresh food experience at supermarkets is slightly
higher than at traditional markets (70% vs. 68%) in this sample. However, relating to
consumer trust, the traditional market has very low trust at 2.8 points, compared with
supermarket and organic store at 3.5 and 3.4 points respectively. Besides, there are
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24% of respondents choosing fresh food from relatives and families’ self-provision and
believe strongly in the safety of these sources (4.5 – the highest trusted score). By
contrast, only 4% of respondents experienced fresh food online shopping and buying
from farm-gate directly. With 3.8 scores of trust, farm-to-table supply is a promising
approach for consumers who are looking for quality food, but it probably challenges to
online channel when its trusted score is the lowest at 2.7 points.
Figure 23. Sale channel and consumer trust

80% 5.0
68% 70%
4.5
60%
4.0
3.8
3.5
40%
3.4
23% 24% 3.0
20% 2.8 2.7
4% 4%
0% 2.0
Traditional Supermarket Safe/Organic Online Farm directly Family self-
market store shopping supply
Sale channel traffic (%) Sale channel trust (mean)
Shoppers visit traditional channels daily, but they spend more at

modern channels.
Working out the data, statistical analyses discovered that consumer trust and
shopping channels are independent with all demographic factors (p-value tests
greater than 0.05). Otherwise, there are associations between sale channel with
shopping basket size (p-value = 0.05) and frequency (p-value = 0.01). Showing in
Figure 24, in terms of frequency, consumers visit the traditional market channel more
frequently than the other channels. 66% of respondents go to traditional markets
every day or every two days, compared with supermarkets (57%), organic stores
(54%), and others (below 50%). In terms of average purchases, the modern and
emerging channels witness more spending per average purchase than the traditional
channels do. There are 76% responses for supermarkets, 77% for organic stores,
and more than 80% of other emerging channels where the shoppers pick up basket
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sizes higher than $10 per. The insight is consistent with the finding of shopping
frequency and basket size that less market visiting, higher expenditure per
transaction.
Figure 24. Association of channel with frequency and average purchase
Channel and frequency Channel basket size
Self-supply 48% 52% 19% 81%
Farm directly 40% 60% 100%
Online shopping 30% 70% 20% 80%
Organic store 54% 46% 23% 77%
Supermarket 57% 43% 24% 76%
Traditional market 66% 34% 34% 66%
Once or twice a week Small basket size - Under 5$

Every day or every 2 days Big basket size - From 5$
Safety and freshness are primary needs.

Question 5 asked about the importance of influencing factors for consumers when
choosing fresh food shopping destinations. Improving these factors will impact
positively on traffic to stores and conversion rates in-store.
Figure 25. Consumer’s store selection criteria
Food safety 4.69
Food freshness 4.53
Convenient location 3.87
Various assortment 3.65
Seller attitude 3.62
Affordable price 3.57
Promotion and advertising 2.94
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On the 5-point Likert scale, safety and freshness are standing at the top with 4.69 and
4.53 scores respectively, as shown in Figure 25. This strongly indicates that safety and
freshness are the primary factors when consumers obtain fresh food. In the second
group, consumers prefer outlets having a convenient location (3.78), followed by a
various assortment (3.65), seller attitude (3.62), and affordable price (3.57). Additionally,
it is critical to take the convenience factor into account because 78% of females
considered it significantly versus 61% of males (p-value = 0.03). Lastly, for fresh food,
promotion and advertisement is the least influencing factor.
2.2. Consumers’ attitude toward sustainable production

The section objective was to quantify consumers’ confidence in fresh food purchasing
and measurement of their perception about sustainable ideas. Consumer responses
for this section are fundamental for further elaboration on the idea of sustainability for
agribusiness or food enterprises within the Vietnam context.
Consumers’ confidence in food safety is their own experience.
Because of high-profile food safety scandals as described in the macro-environment,
consumer confidence in quality of food has been affected. The question 6 measured the
overall picture of consumer confidence in the safety of fresh food as well as the
seriousness of this problem.
Figure 26. Consumer confidence in fresh food
2% 24% 48% 26% 0%
Very confident Confident Neutral Not confident Not confident at all
Shown in Figure 26, there are 26% respondents feeling confident in the safety of fresh
food acquiring, and the same number for negative feeling “not confident”. There are no
respondents who are not confident at all. The remaining number, nearly a half of the
sample, expressed a not particularly good or bad experience. When breaking down
the index “consumer confidence” by demographic characteristics, there are no
differences (hypothesis tests, p-value > 0.05). This means confidence in the safety of
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fresh food is unique to the consumers’ experience regardless of their gender, age,
occupation, income, or education background.
Consumers strongly emphasise the traceability of the food system

and farm-to-table purchase intentions. However, their scepticism
about safety claims exists.
Measuring consumer insight and expectation was a critical step to develop value
propositions of the business case. By using ‘agree’ or ‘disagree’ statements, this survey
explored consumer perceptions about some sustainable development ideas for the food
system summarised in Table 11. The statistical indexes pointed out that respondents
have a strong desire to trace back to the origin of food sources (4.45 scored), express
purchasing intent directly from farms (4.36 scored) and are willing to pay higher for
quality food (4.33 scored). Consumers also recognise the increasing role of sustainable
production in agriculture (4.27 scored) and certification in safety assurance (4.26
scored). Besides these positives, consumers’ doubt about food safety claims is a
remarkable number. The negative feeling scored at 4.4 – the second highest.
Table 11. Consumers’ perspectives
Statement Measurement Score
I really need to know where fresh food I purchase

Traceability desire 4.45
come from and how they are produced.
I think all information claims about safety of

Mislabelled doubt 4.40
products could be mislabelled.
If I have the chance, I will buy fresh food directly from Farm-supply
4.36
farmers, instead of markets or outlets. interest
I am willing to pay higher prices if I know food is

Willingness to pay 4.33
clean and safe.
I believe that good agricultural practices (GAP) or

Sustainable
organic production play an important role in 4.27
production
supplying quality food.
I feel more confident to buy fresh food having

Certification impact 4.26
certification like GAP or organic.
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Furthermore, statistical hypotheses tests figured out three important correlations

shown in Figure 27. Firstly, the expectation of tracking and tracing the source of food
is different in employment categories (p-value = 0). In detail, students, white-collar
and blue-collar desire the traceable function more than other groups do. Secondly,
regarding the willingness to pay or expenditure abilities, it is rational that the higher
the income, the higher willingness people have to pay a premium price for quality
food (p-value = 0). Lastly, in terms of mislabelled doubt, the younger the age range,
the bigger doubt about quality and safety claims for fresh food (p-value = 0). The bar
chart shows that the safety claims are treated with scepticism by more than 90%
respondents aged under 30, compared with groups aged 30 to 40 or over 40 at 89%
and 43% respectively.
Figure 27. Consumers’ perspectives and demographics association
Traceability desire Willingness to pay
Household/ Retired 67% < 200 USD 56%
Self-employment 85% 200 - 500 88%

Blue-collars 97%
500 - 1,000 92%
White-collars 92%
> 1,000 USD 98%
Student 92%
Mislabelled doubt
Under 23 100%
23 - 30 92%
31 - 40 89%
Over 40 43%
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2.3. Consumers’ expectation in a farm-to-table solution

A farm-to-table supply chain is a model where consumers can purchase food or agro-
food directly from producers or farmers, integrating processes of quality control and
the ability to trace back the origin of food. In the proposed solution section, the survey
introduced the farm-to-table definition and interpreted what it means to consumers.
This insightful data helps to justify the consumer acceptance of the proposed idea.
The farm-to-table supply chain is a new concept to most consumers.

The question “have you heard of the farm-to-table concept before participating in the
survey?” clarified consumer’s awareness into three levels of acknowledgment. As
presented in Figure 28, farm-to-table is a new idea to the majority of respondents
(77%). There are 23.4% of them who confidently know what farm-to-table means. In
contrast, 41.5% surveyed people have not heard of it before, and approximately 35%
of responses have heard of it, but do not know what it means. The acknowledgment
coincides with the circumstance discovered in question 3 and 4 that only 4%
respondents experienced farm-gate purchases, but trust in the safety of the emerging
channel was highly recognised at the second rank, only behind self-provision by
consumers’ family or relatives.
Figure 28. Consumers’ awareness about the farm-to-table concept
23.4% 35.1% 41.5%
Yes, I know what it means clearly.

Yes, I have heard of it, but I don’t know what it means.
No, I have not heard of it yet.
Consumers are highly interested in the farm-to-table solution.

Although there were slightly under a quarter of responses acknowledging the farm-to-
table concept clearly, consumers’ interest in the proposed solution is impressive. The
survey received 36% “very interested” and 44% “interested” answers to the idea of
purchasing fresh food directly from farmers through a farm-to-table platform as
illustrated in Figure 29, followed by 19% of people who responded that they “will
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consider offerings”, and only 1% were “not interested”. There is nobody who totally
dislikes this solution.
Figure 29. Consumers’ interest in the farm-to-table solution
36% 44% 19% 1%
Very interested Interested I will consider.

Not interested Very not interested
Traceability is the most desired value creation of this solution.

Subsequently, the survey asked 202 participants who expressed their purchase
intentions on the farm-to-table supply chain, what is important to them when
experiencing the model? Results are presented in Figure 30.
Figure 30. Desired features of the farm-to-table solution
87%
74%
68%
49%
30%
4%
Traceability Certification Doorstep Farm visiting Food box Others

delivery deals
Traceability continues to be the top that was selected by 87% respondents. It strongly
asserts consumers’ desire about the ability to know where fresh food comes from and
how it is produced. Standing at the second is doorstep delivery with 74% respondents
required, followed by certification (68%), farm exploring (49%), and food box deal (30)
Other responses suggested that the farm-to-table solution should take into
consideration aspects such as quality commitment, a variety of offerings, on-time
delivery, production measurement, pre- and post-purchasing consumer experience,
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and food preservation. On the contrary, there are three common reasons refusing farm-
to-table offerings through a digital platform. These reasons are “do not trust in quality
claims online”, “love to interact with people rather than electric devices”, and “need to
check products physically such as freshness, taste, or smell before purchasing”.
2.4. Consumer’s online shopping behaviour

The majority of respondents are familiar with online transactions.
Questions 12 to 14 targeted the basic online shopping behaviour of consumers. These
included questions such as: Have they made any online purchase in the last 3 months?
If yes, what kind of payment methods have they made and what kind of categories
have they been involved in? Eighty four percent of participants say “Yes” to having
purchased some items online in the past three months. Cash on delivery is a common
payment method made by 75% online shoppers. While credit or debit card is 41% and
online banking is 26%. In terms of shopping categories, the top three categories are
fashion (63%), books (51%), and health and beauty (41%). The data will be discussed
in comparison with Vietnam e-commerce reports for having forecasted accuracy about
the market scale and a better understanding about e-commerce trends.
Figure 31. Online shopping categories and payment methods
Online shopping categories Paymend method

75%
63%
51%
41%
41%
24% 26%
19%
16% 14% 16% 16%
6%
Credit or Online Cash on

debit card banking delivery
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Through the quantitative findings, this consumer survey uncovered critical insights of
consumer shopping behaviour and expectation. The results of key performance
indicator measures and the associations between these indicators pointed out trends
of fresh food shopping behaviour, consumer interest and desires for new solutions that
can improve their standard of living, and consumer awareness about the future of food
system development. These major findings established the foundation for further
elaboration to build the business case.
3. OVERALL FINDINGS SUMMARY

The foremost objective of this innovation and commercialisation process was to
establish a business case that addresses food safety in the short-term and builds food
trust in long-term in Vietnam. Even though this exploratory research was separated
into qualitative research and quantitative research, both processes were interrelated.
Therefore, the major findings resulted from a combination of both processes.
3.1. Outcomes of food system exploration

The food system discovery validated the feasibility of a farm-to-table concept from
the supply side. By concentrating on production methods and quality controls, this
process grasped key insights of vegetable supply chains and value chains. It also
embraced farmers’ perspectives about the food safety situation, ideas to improve,
and the future of agriculture through their sharing. The summary of these outcomes
is presented in Table 12. This summary provided evidence-based facts and valuable
information for market and product development. These outcomes also coincided with
the project’s intention that the business case addressing food safety and building food
trust will start from proper production and source of quality food.
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Table 12. Findings of the qualitative study
Research What needs to be

What was known?
question elaborated?
- Flows of goods and information of the

supply chain, actors involved and
Supply
their coordination were embraced.
chain
- The important role of aggregators in
a fragmented system was affirmed. - Criteria or identical
characteristics to navigate
- Organics, hydroponics and other
farmers who are applying
advanced technologies are emerging
good practices in
in Vietnam now.
Quality agriculture.
- Some farmers employ certifications
control - Working process or
to prove food safety, even it is
partnership framework to
expensive.
collaborate with these
- Verified products have prices at least farmers to mitigate food
two-fold higher than normal ones. safety situation.
- Awareness of food safety and
Value chain
sustainable production raises.
- “Quality and safety first” is in place at
some farms.
- There are contrary points of view

- The business model needs
Farm-to- about feasibility. Some are
to define underlying
table implementing this concept by building
processes to carry out this
solution a direct-sale channel to consumers.
concept.
- Farmers support traceability of food.
- Market access is the biggest - The business model

challenges to all farmers. Incentives evolves consumer
Barriers for quality products are concerned. willingness into actions.
and - Post-harvesting technology and - What are the barriers that
challenges logistics are barriers of the farm-to- this project can solve
table concept. internally or source
externally?
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3.2. Outcomes of market and product validation

The quantitative research provided primary insights to work out the customer segment,
market size, value propositions and consumer channel approaches for the minimum
viable product. To summarise and set up directions for the business case architecture,
Table 13 points out what the consumer survey validated and what the research needs
through further investigation and elaboration in order to achieve objectives.
Table 13. Findings of the quantitative study
Research What needs to be

What is known?
question elaborated?
- Female, white-collar, with advanced

education levels are characteristics of
potential consumers. - The portrait of typical
- Traditional channels are common but consumers;
Target have low trust. Consumers see - The project anticipates
customers supermarket, organic stores, self- the target the market size
provision as substitutes. to later define the
- The high rate of interest proved the investment in resources.
demand of the farm-to-table supply
chain.
- Consumers’ decision-making
processes regarding purchases and
- How to verify production
their influencing factors are figured
methods and ensure
out.
safety;
Barriers to - Safety and freshness are primary
- How to build the go-to-
change needs. Consumers also prefer
market system and
customers’ convenient offerings.
behaviour supply chain operation
- Consumers strongly emphasise the and management
traceability of food systems and farm- processes to satisfy
to-table purchase intentions. However, customers’ needs.
their scepticism about safety claims
exists.
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- The farm-to-table supply chain is a - The business model

new concept to consumers, but it is a connects farmers and
potential solution; consumers;
Value - Traceability and connectivity are value - What are the
proposition propositions of the business case. technologies involved to
This decision resulted from the deliver traceability and
insights gained through both connectivity reliably and
qualitative and quantitative methods. cost-effectively?
The findings and analysis chapter reported visually the results from both the farmer
interviews and the consumer survey. Affirmatively, this research achieved objectives
of addressing farmers’ production capabilities and understanding customers’
behaviour and expectation in the fresh food industry. From the supply side, this
research figured out the similarity and distinction among farmer categories based on
their current production practices and their expectations about market and new
solutions or business partners. These findings required new approaches of the farm-
to-table project to address farmers’ challenges in market access and value chain
enhancement, together with recognising the important role of aggregators in the
fragmented food supply system in Vietnam. From the demand side, this research
embraced existing shopping behaviour of consumers and uncovered influencing
factors of customers’ satisfaction when they obtain fresh food. Additionally, this
research set up basic knowledge about Vietnam consumers’ thinking regarding
sustainable practices and the farm-to-table concept. These findings opened
opportunities to convert sustainable factors into value addition and translate the farm-
to-table concept into an innovative practice. In the next chapter, the report will
elaborate on these results further to concentrate the business model. By reflecting the
data findings on the project’s assumptions, opportunities and constraints, this research
justifies the feasibility of the farm-to-table supply chain in Vietnam and shapes the
building blocks of the business model.
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CHAPTER 5. DISCUSSION
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1. REFLECTION ON ASSUMPTIONS
1.1. The assumption about supply
This project assumed that sources of quality agro-food exist in Vietnam, and this study
needed to navigate where these sources are. The qualitative method investigated the
vegetable supply chain and value chain justified the assumption.
The qualitative method answered questions of food safety concerns.

In the macro-environment analysis of the introduction chapter, concerning questions
regarding food safety were raised about whether Vietnam’s agro-food system has
production ability and integrity to deliver quality food.
In terms of capability, the qualitative outcomes led to the conclusion that Vietnamese
farmers have the expertise, knowledge and motivation to produce safe and good
quality vegetables. They do not individually address food safety, but communities and
networks of sustainable development and start-ups in agriculture have been
established. These groups of farmers are currently expanding across Vietnam, for
instance, the participants in Group 2. This fact reinforced the assumption about supply
for the farm-to-table project.
In terms of integrity, it is a good signal that “safety and quality first” is a priority of many
farmers now. Their source of growth is shifting from intensive-use of artificial inputs
and natural resources to adopted technologies in production. New business models to
build long-term trust, loyalty and reputation to consumers are emerging. Certification
and traceability are in place and used as tools of market access and farm branding.
The findings pointed out that there is the intense competition in the food economy.
Overall, the appearance of Group 2 and 3 indicated the shift in farming practices in
Vietnam from temporarily profitable intents to sustainable development. These new
farmer generations increasingly play an important role in delivering quality food.
This study established criteria to position sources of quality food.

Who implements good practices in agriculture, what characteristics do they have, and
where are they? The farmer classification helped the farm-to-table project to obtain
answers to this question. A decision was made to use criteria selecting farmers based
on their business practices and perspectives despite differences in their demographic
attributes. This decision carefully considered that demographic information was
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necessary for the cluster analysis, but the sample size (nine participants) was not
sufficiently large to determine the relationship between demographics and business
practices. Therefore, the initial scanning criteria will be dependent on farmers’
practices as summarised in Table 14. The minimum viable product of the farm-to-
table supply chain will be developed by collaborating with farmers who satisfied these
characteristics. These farmers are also strategic partners of this project.
Table 14. Criteria of farmer selection process
Criteria Characteristics
Business type - Individual farmer, Cooperative or Enterprise.
Production method - Producing using standardised procedures.
Quality control - Obtaining production certification or safety testing.
- Growing diverse and multiple crops.

Production capacity
- Owning farms larger than 1 ha.
Coordination - Establishing contractual relationships or partnerships.
1.2. The assumption about market demands

Consumers are interested in the farm-to-table solution.
The key assumption of market and product validation was that there is a niche market
or a customer segment for the farm-to-table solution. The results from the consumer
survey had justified and reinforced this assumption twice.
- Question 7: 85% of respondents will buy fresh food from farmers directly if they
have the chance. In addition, nearly 92% of respondents are willing to pay higher
prices if they know food is clean and safe.
- Question 9: 80% of respondents are interested in the farm-to-table supply chain
through an online platform.
- Additionally, as a result of Question 6, 74% of respondents are not confident or are
hesitant about the safety of fresh food. This implies that the market is huge for
businesses tackling food safety in Vietnam.
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Food trust is the vision of this farm-to-table project.

While food safety is an urgent demand of consumers, the high prevalence of
doubtfulness about safety claims on products (90% of responses to question 10) is a
long-term challenge to the business case. It will be time-consuming to establish a
reputation and overcome consumers’ scepticism about food safety. Under the intense
competition among fresh food suppliers, this finding affirmed the conclusion of the
literature review that food safety or food trust nowadays is not only a mandatory
compliance to protect consumers but also offers competitive advantages in the food
industry (Price Waterhouse Cooper, 2015). Considering these insights, the report
decides that food trust building is the vision of the business case.
Overall, this study reinforced both assumptions of supply and demand sides for the
farm-to-table supply chain. On one side, this study navigated sources of quality food.
On the other side, this study defined consumers’ demand and the project’s visions. In
the next sections, discussions will concentrate on how this project can be deployed.
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2. REFLECTION ON OPPORTUNITIES AND CHALLENGES

This section discusses how the business case takes advantage of opportunities,
confronts challenges and reduces the risks and uncertainty in the external
environment.
2.1. Taking advantage of opportunities

The project’s responses to the socio-economic transformation
The socio-economic alteration in Vietnam has resulted in three defined opportunities:
- Vietnamese are wealthier, urbanised and more demanding in health and quality.
- Consuming more fresh food (vegetable, fruit, meat and fish) and increasing in
food expenditure are happening.
- Consumers are empowered and more proactive.
The consumer survey proved that the socio-economic transformation translates into
changes in consumers’ shopping behaviour and the distribution system in Vietnam.
Instead of visiting traditional market daily to acquire fresh food, the consumer survey
revealed a remarkable number of respondents (40%) who buy fresh food once or twice
a week. They spend more on a higher basket size for one shopping journey. They are
familiar with supermarkets or organic stores. Responding to these insights, the
business case will:
- Positioning the farm-to-table supply chain as a modern channel which can offer
one-stop shopping for fresh food in Vietnam.
- Designing products and services based on consumers’ decision-making process

discovered by this research to achieve customer satisfaction.
The project’s responses to technological breakthroughs

This project will take advantages of advanced technologies to deliver its value
propositions. These are the traceability of food and the connectivity between farmers and
consumers.
- Firstly, both quantitative and qualitative studies emphasise the importance of
traceability in the food supply chain. The ability to trace back to the origin and the
production methods of food are not only important to distribute information to
consumers but they also foster farms’ reputation and branding. This project will
take advantage of track-and-trace technologies to deliver traceability.
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- Secondly, embracing the development of internet and the high penetration of

smartphones in Vietnam, a digital touchpoint will connect farmers and consumers.
2.2. Dealing with challenges

The project’s responses to the fragmentation of the food supply chain
The food supply chain is fragmented. To tackle this obstacle, the farmer-owned
cooperative is a common business in Vietnam to take advantage of market power and
economies of scale. In contrast, there are no footprints of a business model gathering
power of consumption in Vietnam. Therefore, the point of differentiation of this project
is to construct a business model that enables collective action of consumers to evolve.
On one hand, this strategy will take advantage of empowered consumers. On the other
hand, this business model will put pressure on suppliers to deliver quality food. This
intention will be explained in the discussion about the business model establishment.
The project’s responses to financial concerns of the sustainable

development framework
To address financial concerns relating to the potential loss of efficiency and
insufficient rewards when farmers focus on three dimensions including economic,
social and environmental criteria at the same time, this project used findings about
farmers’ awareness and expectation and consumers’ expression about sustainability.
From the supply side, the qualitative interview captured farmers’ concerns about
returns and incentives when they carry out the sustainable development frameworks
for food. From the demand side, the quantitative survey evidently pointed out that
consumers recognise the role of sustainable practices in agriculture. There are 92% of
responses that “agree” and “strongly agree” with the increasing role of sustainable
production nowadays. These evidence-based findings establish the premise of
encouraging environmental and social responsibility in the food system. This justifies
the ability to convert sustainable factors into enterprises’ incentives and reputation.
Taking into account these justifications, the business case needs to create a
mechanism or process that enables it to promote consumer responsibility for
sustainable development and encourage them to translate their purchase intentions
and willingness-to-pay into payment actions. By doing so, this project can confront
financial concerns.
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3. REFLECTION ON THE PROJECT FEASIBILITY

A farm-to-table supply chain is a new concept in Vietnam. This model allows
consumers to directly acquire food or agro-products from farmers or producers
incorporating processes of food traceability and quality control. The idea of this project
is to create a marketplace for a farm-to-table supply chain. This section discusses the
feasibility of the idea by focusing on the backbone of a business model including the
customer segment, strategic partners and the value proposition. Additionally, this
section defines the marketing channel.
- Customer segment. Who are the typical customers? What are their
characteristics?
- Strategic partners: They are farmers who qualify for the scanning criteria as
mentioned in the reflection of assumptions. This building block will not be
repeated in this section.
- Value proposition. This is about the product vision and benefits for customers.
What is the value-addition that they prefer? How does the product or service
benefit customers? What technologies should be involved to meet customers’
needs?
- Marketing channel. Where are customers buying fresh food? How can the project
acquire customers?
3.1. Customer segment

“The lower the shopping frequency, the higher the average
purchase” is a valuable insight.
As per the target market size formula presented in Figure 12 (page 59), in order to
increase the sale number, the business case must increase every variable of the
multiplication. However, the proven correlation between shopping frequency and
average purchase indicates that the business strategy should narrow down options.
Provided that the business case targets customers who have once or twice market-
visits per week, instead of daily, the growth strategy will have two approaches.
- Increase in average purchase of consumers by diversifying range of products or
offering more high-value and nutritional products, and/or;
- Increase customer base by obtaining more traffic to points of sale and achieving
higher conversion rate in-store.
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The decision-making process of consumers is uncovered.

Besides working out basic performance indicators of shopping behaviour such as
frequency, average purchase or channels, one of the most important findings of the
consumer survey was to embrace the decision-making processes of consumers. This
relates to the order and priority of influential factors to consumers’ consideration when
they select stores or pick up fresh food items as illustrated in Figure 32. This insight
will help the project make important decisions on strategies to develop products and
create call-to-action messages.
Figure 32. Consumer decision-making process for fresh food
Primary • Safety
enabler • Freshness
• Convenience
Secondary
enabler • Assortment
• Vendor relationship
• Price
Third
• Promotion
enabler
• Avertisement
The business case will appraise three levels of consumers’ needs when developing
products or services.
- Firstly, safety and freshness are the primary need of consumers. This consumers’
need requires the business case to build an adequate food assurance system and
logistics capability to keep food safe, fresh and less perishable.
- Secondly, convenience, various choices of products and shopping experiences
such as seller attitudes or customer service are must-have features. The survey
captured the trend of convenient footprints of urban life that doorstep delivery to
shoppers’ homes or offices are the second most demanding feature of the farm-
to-table marketplace (Question 11).
- Thirdly, price, promotion and advertising are nice-to-have features that will be
decided under the conditions of market competition.
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Portrait of the customer segment is described.

From quantitative findings and two above interpretations, this study drew the portrait
of potential consumers for the farm-to-table supply chain as illustrated in Figure 33.
This portrait described their demographic information, shopping behaviour, current
problems, and motivations. The business case concentrates on these
characteristics to recruit customers and create an effective shopping experience for
the farm-to-table approach.
Figure 33. Consumer segment for the farm-to-table solution
Demographics Problem and motivation

Female, 23 to 40 years old; Loss of confidence on food safety;
Income above $500 US a month; Look for quality food for family;
Advanced education; Need convenient solutions.
White-collar.
Consumer
segment
Fresh food shopping behaviour Perspective and expectation

Visit market once or twice a week; Aware of sustainable production;
Obtain basket $10 US on average; Desire for traceability of food;
Experience premium outlets, family Quality assurance and certification.
self-provision.
3.2. Value proposition

Consumers strongly desire traceability; and farmers support the idea.
On one hand, consumers had affirmed twice about their desire to trace back to the
origin of food and know how their food is produced in the quantitative survey. The first
time was when consumers expressed their opinion on sustainable ideas for the food
system. Traceability was the top agricultural practice (4.45 scored) that consumers
need. The second time was when consumers proposed product features that they need
from a farm-to-table platform. Traceability was the most desired product feature to
consumers, comprising 87% of responses. On the other hand, farmers in Group 2 and
Group 3 expressed that they totally support the idea of traceability. They plan to use
the QR code for scanning and tracing back to farm locations, farmer name, cultivation
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method, standards or certifications, seeding date, harvesting date, and expiry date. To
them, traceability is an important tool for farm branding and food trust building.
Considering these critical insights, traceability of food is the first value proposition of
the business case.
Consumers showed purchase intentions from farm-gates, while

farmers wanted a bridge to the high-end market.
As discussed in the section of reflection on research assumption, the consumer
survey expressed their intention to buy fresh food from farm-gates, but there were
only 4% of respondents to the consumer survey to experience this purchasing
pattern. This is an unfulfilled market. In contrast, from the supply side, the ability to
access the high-end market for quality agro-products is the biggest challenge to
farmers. This is an obstacle to upgrade farmers’ position in the food value chain. On
account of this challenge to farmers and intention of consumers, connecting farmers
and consumers more directly is the second value proposition of this project.
To conclude, the business case will offer two values to consumers. These are
traceability of food and connectivity between consumers and producers. The value
proposition is the fundamental of any value creation and customer relationship
activities.
3.3. Marketing channel

This project positions the farm-to-table supply chain as a digital
marketing channel.
As a result of the consumer survey, there are approximately 40% of respondents
revealing that they purchase fresh food once or twice a week (Question 1). This rate is
higher for shoppers who work in offices (46%) and who have obtained advanced
education (51%). These facts imply changes in shopping behaviour, that there is an
increasing demand for one-stop fresh food shopping services for whole week
consumption, instead of daily fresh food acquisition. In addition, the channel and trust
analysis disclosed basic insights of competition in the fresh food categories (Question
3). Traditional channels such as wet or open-air markets and street vendors are very
common, low price, convenient and have other cultural associations. However,
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supermarkets and organic stores are increasing their popularity and gaining
consumers’ trust. In this situation, the farm-to-table supply chain is a new concept for
the majority of consumers. This project will position this concept in the modern channel
that compete with supermarkets, as well as premium and organic stores. In the stage
of minimum viable product development, the business case aims to attack and switch
25% of respondents who are experiencing premium stores and self-provision supply
to the farm-to-table concept. Penetrating to the customer base of supermarkets or
mainstream markets will be considered later.
Figure 34. Value contribution of retail channels in Vietnam 2015 – 2020 forecast
Source: EU-Vietnam Business Network, Vietnam’s distribution and

retail channels report, 2018, page 16
Furthermore, industry reports and previous literature revealed the changes in

distribution and retail channels in Vietnam (Nielsen Vietnam, 2018; The World Bank,
2016). In terms of physical transactions, wet markets and grocery stores remain the
most common retail channels. However, modern retail is gaining in market share,
especially in Ho Chi Minh City or Ha Noi Capital. The value contribution of modern
retail channels has increased in recent years and will account for up to 45% of the total
sector value by 2020 (EU-Vietnam Business Network, 2018). In terms of online
transactions, the high penetration of Internet to 53% of the population and smartphone
use to 84% of urbanised residents (Vietnam Internet Association, 2017; Nielsen
Vietnam, 2017) is partly associated with the rise of e-commerce in Vietnam. The e-
commerce in Vietnam has a compound annual growth rate of by 14% from 2017 to
2020, accounting for 5.2% of total retail sales (EU-Vietnam Business Network, 2018).
This digital channel is attracting the young population who are under 40 years old.
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These insights of the retail industry in Vietnam supported this project’s decision that
the farm-to-table supply chain will be positioned as a modern and digital channel.
Overall, this project will embrace the change in consumer shopping behaviour and the
trend of distribution and retail in Vietnam to position the farm-to-table supply chain as
a modern and digital channel. The model aims to offer one-stop shopping for fresh food
in Vietnam.
3.4. Technological involvement

This project applies a suitable technology to deliver traceability.
According to the United Nation Global Compact (2014), traceability is “the ability to
identify and trace the history, distribution, location and application of products, parts
and materials, to ensure the reliability of sustainability claims, in the areas of human
rights, labour (including health and safety), the environment and anti-corruption”. Due
to increasing calls for food safety, businesses look for solutions for food traceability
through their supply chain to restore consumers’ confidence. In Vietnam, the qualitative
research revealed that some Vietnamese farmers and cooperatives use a QR code to
allow consumers to scan products in shops and bring up information about its origin
and journey to consumers as well as the farm’s location. Following the technological
footprints, the research discovered some recent track-and-trace applications,
especially a blockchain ledger system. This technology can offer great advantages
such as no data manipulation, high level of privacy and integration with many systems
(Kairos Future, 2018).
Although technological and scientific breakthroughs make traceability possible to
implement, the applications only address the holding of the data about food and
distribute the data accessibly. Clearly it does not in itself deliver quality of food because
food is not only physical but also natural. The connection between digital implications
and natural quality is very difficult to manage. Moreover, it is not clear that new
technologies will be cost-effective relating to a standard system. It may be sufficient at
the starting point of the product development to simply use existing technologies like
scanners in smartphones to start collecting and distributing data. To conclude this
point, further research must prudently investigate the stage of track-and-trace
applications in Vietnam and evaluate what is the most suitable technology to build the
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minimum viable product. The evaluation carefully focuses on reliability, cost-

effectiveness and friendly user-experience before reaching the final decision.
This project uses a digital platform to facilitate connection between

farmers and consumers.
Reflecting on the high penetration of smartphones, rapid growth of e-commerce and
especially, changes in fresh food shopping behaviour, this project aims to build a digital
platform for the farm-to-table supply chain. This platform will facilitate the connection
between farmers and consumers, promote sustainable production and enable
consumers to track and trace back to the origin of food. One of the positive findings of
this research that support this idea is that 84% of respondents have experienced online
shopping for the last three months. Therefore, electric devices such as smartphones,
tablets or laptops are key touchpoints of this approach. Operating this way, the
business case can enjoy market trends of mobile commerce and social networks in
Vietnam. However, it is critical to be aware of barriers including underdeveloped
logistics, the predominance of the cash on delivery method and a lack of trust in quality
claims online in Vietnam (EU-Vietnam Business Network, 2018).
In conclusion, the findings and interpretations of the farmer interviews and the
consumer survey as well as technology review supported the idea of a farm-to-table
supply chain to address the food safety problem in Vietnam. This research discovered
the customer segment, defined value propositions to customers, and the marketing
channel to deliver values to consumers. The existing technologies offer great potentials
to carry out the innovation and commercialisation intentions.
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4. THE BUSINESS MODEL DISCUSSION

The aim of this section is to find out a suitable business model that fits into the business
case. After some studies, the report put the cooperative model and the subscription
model into evaluation. According to the reflection on opportunities and challenges to
the farm-to-table supply chain, the business case will create a business model that
gathers consumers who are confronting daily questions regarding where, how and
from whom they can purchase quality food. Both models can achieve the business
intention with advantages and disadvantages as following assessments.
4.1. Cooperative model

A cooperative is a collective economic organisation established voluntarily by its
members to mutually cooperate and assist to meet the common interests of all
members on the principle of co-ownership, self-control, self-responsibility, equality and
democracy in management as regulated in Vietnam Cooperative Law (2012). According
to a report of Vietnamese Farmers’ Union (2018), Vietnam had 11,668 farmer-owned
cooperatives in agriculture. Of these, there were 193 cooperatives who adopted high
technologies in vegetable cropping, livestock breeding and fisheries. Farmer
cooperatives play roles in supplying materials, distributing products, and specialising in
production (Loc & Hang, 2015). Through operating under a cooperative, farmers gain
market power and receive the government’s support to deal with the fragmentation in
agriculture. In contrast, there is no literature or reports about consumer-owned
cooperatives in Vietnam to create collective actions among consumers like among agro-
food suppliers. This fact raises the question of why consumer-owned cooperatives are
far less common than farmer-owned cooperatives.
As analysed by Hasmann in his book “The ownership of enterprise” (1996), farmer
cooperatives can be successful because this business model can 1) maximise
interests and values of transactions between the firm and its stakeholders and 2)
minimise costs of ownership including costs of capital raising and management.
Conversely, consumer-owned food retailer cooperatives hold small market share and
are less common because 1) interests and values benefiting from market are
commonly low, and 2) the costs of ownership for retailing goods and services are high.
A comparison between farmer ownership and consumer ownership in Table 15
explains this underlying logic in detail.
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Table 15. Farmer-owned cooperatives versus consumer-owned cooperatives
Farmer-owned cooperatives Consumer-owned cooperatives
- Gaining significant market power - Gaining low market power.

of farm supplies such as Retailing for consuming items
fertiliser, pesticides, livestock is very competitive where
feed, seed. Besides, gathering margins are exceptionally
production helps cooperatives narrow, while consumers are
Interests achieve the economy of scale. numerous and temporary.
and - Dealing with asymmetric - Asymmetric information is not
values information about quality and an important problem for fresh
ingredients of fertilisers or food. Consumers can either
livestock feeds by put suppliers judge quality simply by
under pressure. Cooperatives inspection prior or quickly
gain trust of its farmer-members. obtain experiences about the
quality by a few trial purchases.
- In terms of management, farms - Customers of any given retail

are likely businesses, grow firm are commonly too
given crops, have similar numerous and temporary to
demands for supplies; therefore, organise effectively. They have
they can be easily organised as different demands and
members of a local cooperative purchase different items.
to govern effectively. Identical interests may be rare.
Cost of
- In terms of capital raising, - Risk of sharing capital is
ownership
farmer cooperatives issue considered. The amount of
shares of capital and sell them invested capital should be
to its members. After that, it can relatively low as a fraction of
retain a portion of its net annual sales volume. However,
earnings rather than pay the major capital for warehouse
dividends to members. and logistics is not easily
accepted by consumers.
Source: Author’s summary from (Hansmann, 1996)
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Due to these weaknesses and limitations of a food cooperative owned by consumers,

there are not many meaningful opportunities for efficiency gains from consumer
ownership. Furthermore, in the Vietnam context, consumer ownership may confront
cultural barriers that significantly influence the Vietnamese financial decision-making.
Vietnamese prefer savings and tend to avoid uncertainty, risk of failure and permanent
commitment (Fehrenbacher, Roetzel, & Pedell, 2018); therefore, it is unpleasant for
consumers to join a food cooperative. If cooperatives run into financial problems due to
inefficient operation, consumers will lose some or all their investments. For these reasons,
this project investigated the second business model.
4.2. Subscription model

A subscription business is a model that the company receives periodic payment in
advance to deliver or give rights of access to a product or service (Business Model
Toolbox, 2019). As illustrated in Figure 35, instead of selling products as a single
transaction, the subscription model aims at selling a product or service over a period.
Therefore, this model is not only about services or products but also about processes
during the subscription period.
Figure 35. The comprehensive version of a subscription model
Periodically product/service
COMPANY CUSTOMER
$ $ $
Periodically payment
Doing further investigations, advantages and disadvantages of this model are

uncovered as summarised in Table 14.
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Table 16. Chances versus risks of a subscription business model
Chances Risks
Cash flow: A subscription provides a Reliable delivery: It is essential to

more reliable cash flow because maintain and improve the quality of
revenue and costs for producing products and services. This requires
products or services are more processes to build consumers’ trust and
predictable. keep them over a longer period.
Stable customer base: Depending on Customer data: When using customer

the design of the subscription model, data to optimise the service it is
customers can be bound to the service important to be transparent and respect
over a defined period. customer privacy.
Lock-in effect: The subscription Transparency: A subscription contract

contract will bound customers and the must be transparent about costs and
firm during a period of their contract. It conditions of registration and withdrawal
creates high switching costs and a of transactions to avoid any potential
greater chance of maintaining conflicts.
consumers’ loyalty and retention.
Source: Author’s summary from (Business Model Toolbox, 2019)
Generally, on one hand, the subscription model has the same advantages as the
cooperative such as predictable transactions and cash flow, stable customer-base and
lock-in effect to retain customers. However, degrees of risk and unpredictable factors
are different. The next section identifies these differences to reach the final decision of
the business model.
4.3. Decisions on the business model

Firstly, the above discussions revealed that both the cooperative and subscription
model enable the ability to gather empowered consumers in Vietnam to create
collective actions dealing with food safety. A comparison in Table 17 shows basic
similarities and differences between these two models. To reach the final decision,
this project prioritises to minimise consumers’ risk and unpleasantness in recruiting
them into the farm-to-table supply chain. Hence, with the ability to frame consumers’
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risks within a period of the subscription contract and basic financial fee, the
subscription is a suitable model for this project. Through operating this model, the
project is fully aware of challenges such as 1) raising capital from investors, 2)
building adequate and reliable business processes to retain customers’ relationship
and loyalty, and 3) transparency in the product disclosure statement.
Table 17. Cooperative model versus subscription model
Criteria Cooperative Subscription
Ownership form Consumers own the firm. Investors own the firm.
Financial risks Some or all money invested in Subscription fee if stopping

to consumers the firm. transactions with the firm.
Lock-in effect Permanently Periodically
The biggest Consumers avoid permanent Reliable services and quality

barrier commitments and risks of of products to maintain
uncertainty. consumers’ relationship.
Consumers’ - Discounts and rebates on volume of transactions;

interests
- Access to sources of quality food.

Secondly, for fresh food consumption, the demand of consumers is diverse and
changes every day, and even every meal. It is difficult for the subscription model to
create plans for fresh food consumption due to this diversity. Therefore, instead of
delivering food boxes periodically, the business case will give consumers rights of
access to the farm-to-table supply chain. This platform is operated like “software as
a service” to facilitate connection and trade between targeted consumers and
selected farmers.
To conclude, the business model for the farm-to-table supply chain is a subscription
business that gives consumers rights to access sources of quality foods and make
purchases directly with farmers.
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5. WHAT REMAINS UNKNOWN?

How does this project develop an adequate logistics system?
A farm-to-table supply chain cannot operate well without an adequate logistics
system. On one hand, the qualitative study figured out this is the biggest obstacle to
implement a farm-to-table supply chain. On the other hand, as a result of the
quantitative study, freshness and safety are the top enablers that induce consumers
to support any fresh food businesses. This primary need of consumers requires an
adequate and smooth operation and logistics system. On account of this fact, further
research of this project needs to figure out the fine details of operation and supply
chain management for fresh food. In the scope of this thesis, based on information in
hands, the business case of this project will decide that the subscription model needs
to develop an internal logistics capability or an outsourcing system from external
parties with clear timelines and approaches.
How does this project assure quality of food for consumers?

Through findings of interviews with farmers, currently farmers in Group 2 and 3 use
certifications as a tool of market access and communication for their production
methods. Meanwhile, the consumer survey revealed that certifications are helping
consumers overcome their scepticism about food safety claims. Therefore, the role of
certification is undeniably important to gain consumer confidence in quality of food back
in the short-term. The future research must understand the standards and scientific
indexes behind certifications as the first step of quality communication. However, in
the long-term, brand recognition and reputation will be the key to build trust in the food
economy. For instance, the farmer cooperatives build their brand recognition over time
which can come to be a signal of their quality assurance.
How does this project uncover the pricing structure?

The price and margin structures among stakeholders have remained an unknown area
due to the diversity, volatility and fragmentation of the food supply chain. In order to
create value and improve the value chain, the farm-to-table project needs to do more
specific research in a certain scope and with certain crops or products. Positive findings
for the commercialisation intent here are that 1) price and promotion is not the most
influential factor to consumers’ decision-making and 2) there is high willingness to pay
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premium for quality food and value addition. However, it is vital to be aware of the long
pathway from consumers’ purchase intention to a paying action and post-shopping
experience of consumers later. Price comparison in market is always a critical factor.
6. RESEARCH CONCLUSION
Firstly, this research reinforced the basic assumptions of the farm-to-table supply chain.
From the supply side, there are sources of quality fresh food in Vietnam. From the market
side, there is a niche for the farm-to-table solution. The task of the business case is how
to connect the supply and demand of the farm-to-table supply chain.
Secondly, conducting both qualitative and quantitative methods, this research
accordingly achieved objective one and objective two as summarised in Table 18.
Table 18. Summary of research conclusion
Objective one: Objective two:

Food system exploration Product and market validation
- This project understood current - This project grasped consumers’

practices of different farmers current behaviour to buy fresh food.
groups. These insights are their - This project uncovered consumers’
supply chain, value chain, and decision-making processes when
production methods; purchasing fresh food.
- This project embraced that market - This project described the portrait of
access is the biggest challenge to potential consumers for the farm-to-
farmers and logistics capability is an table supply chain.
obstacle of the farm-to-table
- This project decided what the must-
concept.
have and nice-to-have features of
- This project created the scanning products are.
criteria to find out qualified farmers
- This project formed the basic
for the farm-to-table supply chain
strategy of customer acquisition and
development.
market share increase.
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Thirdly, the literature review in the introduction chapter revealed unknown areas in
works of previous scholars. By shifting the research approach from a channel approach
into a quality control and customers satisfaction approach, this research
complemented the gap through some new findings.
- In terms of supply chain management, this research conducted depth interviews

with farmers to understand their current produce practices, including their
difficulties as well as weaknesses, especially regarding issues related to quality
control. As a result, this research advanced existing knowledge by categorising
farmers into groups and navigating what groups are implementing good
agricultural practices that fit requirements of food safety, quality control and
sustainable development.
- In terms of customer satisfaction, findings of customers’ shopping behaviour
and expectation are the biggest accomplishment of this research. This research
fulfilled the gap by uncovering customers’ decision-making process when
buying fresh food. Besides, this research set up the basic premise of the
argument that Vietnamese customers support sustainable development in
agriculture and food sector. This important point justifies the ability to deploy
and progress with the sustainable food model including economic, social and
environmental factors in Vietnam.
Lastly, by elaborating findings of both qualitative and quantitative methods, the

discussion chapter framed this project’s vision, decided on the business model applied
and constructed five out of nine building blocks of the business model canvas. Most
importantly, the backbone of this project, including customer segment, value
proposition and strategic partners, was established. Other elements of the business
model will be elaborated further and decided in the next chapters. The list of bullets
below is the summary of the business model’s decisions.
- This project’s vision is addressing food safety in the short-term and building
food trust in the long-term.
- The business model is a subscription that gives consumers access to the farm-
to-table supply chain.
- Customer segment contains shoppers who have characteristics as a portrait of
typical customers described by the consumer survey.
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- Value propositions are traceability and connectivity. This project considered

blockchain is a potential technology to trace all pathway of fresh food and took
advantage of high penetration of smartphones and the internet in Vietnam to
connect farmers and consumers.
- Strategic partners are farmers who qualify the scanning criteria. A partnership
with these farmers is critical to develop the minimum viable product.
- Marketing channel is a modern and digital platform. This approach will compete
directly with premium and organic stores together with recruiting consumers who
prefer self-provision or family’s supply.
- Key activities are offering one-stop shopping service for fresh food, creating
marketing programs to maintain subscribers’ transactions with farmers, and
encouraging consumers’ responsibility to sustainable development.
- The last four building blocks including key resources, customer
relationship, cost structure, and revenue stream will be identified and
constructed in the business case chapter.
The reflections of data findings and interpretations on the projects’ assumptions,
opportunities and constraints shaped the farm-to-table supply chain and its value
creation comprehensively. First and foremost, the discussion concluded that building
food trust in Vietnam is the vision of the farm-to-table supply chain. In order to
accomplish this vision, the business case will construct a subscription model to collect
consumers’ power and engage them in the farm-to-table supply chain. The discussion
also worked out the backbone of the business model including three building blocks,
which are strategic partners, value propositions and customer segment. Additionally,
in terms of contribution to knowledge, the research complemented previous literature
to some degree. On one hand, the research categorised farmers into three different
groups to define who has ability and integrity in growing vegetables. On the other hand,
the research discovered consumers’ insights in shopping fresh food: how they select
a store and pick up products and what they think of sustainable practices in agriculture.
The next chapter uses knowledge that has been established by the literature review
and uncovered in this research to recommend a business case. This business case
will deliver the farm-to-table supply chain to Vietnamese consumers.
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Chapter 6. The business case
CHAPTER 6. THE BUSINESS

CASE
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1. BUSINESS MODEL DESIGN

1.1. Goal and vision of this project
The vision
The vision of this project is to build food trust in Vietnam. Because of high-profile
scandals of food safety and consumers’ scepticism about food safety claims, building
trust in food is consequently a complex problem that businesses and society must
solve. This situation is a great opportunity for food companies to change their levels of
trustworthiness and obtain this strategic asset. Therefore, this project aims to give
consumers the greatest confidence in their food by implementing its strategy and
operation model that put consumers’ trust first.
Goals
In order to accomplish the long-term vision, the aims of this project are:
1) Building a partnership with qualified farmers to develop a farm-to-table supply
chain for fresh food in Vietnam;
2) Gathering the power of Vietnamese consumers under a business model to
facilitate connection and transactions between consumers and farmers;
3) Promoting good practices in production to foster the sustainability of agricultural
development and growth.
“Together safer, together stronger” – safer to consumers and stronger to farmers – is
the purpose also the call-to-action message that the business case will communicate
to farmers and consumers.
Core values
The core values are spirit and principles to invent the business case and sustain its
future success.
1) Trust – Think and act like a consumer. Food trust is the guiding principle for
everything this project does.
2) Integrity – Be candid, upfront and accountable.
3) Courage – Make tough decisions, admit mistakes and take smart risks.
4) Forward-thinking – Challenge the old thinking and seek innovation.
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1.2. Opportunities and constraints for development and

commercialisation
At the first stage of development and commercialisation, this project assesses the
business environment to identify opportunities and potential constraints that affect the
ability to build and sustain this business. In order to obtain a well-rounded assessment,
the business environment is accessed at three levels.
- The contextual level includes society, economy, regulation, media, environment,
and technology. These factors are summarised from the environment analysis in
the introduction chapter.
- The transactional level includes partners, consumers, competitors and other
stakeholders. These factors are identified by findings of this research and market
updates.
- The organisational level is a self-assessment about capability of project’s owners.
The detail of the assessment is presented in Table 19. Identified opportunities and
constraints are put side by side to support the decision-making process visually.
Table 19. Assessment of the business environment
Opportunities Constraints
Contextual Contextual
1) Vietnamese are seriously concerned 1) The fresh food supply chain in

about food safety. Vietnam is fragmented and
complicated with numerous
2) The socio-economic transformation
smallholders. This results in:
has established empowered
consumers who are wealthier, - Barriers to monitoring stakeholder’s
urbanised, middle and high-income compliance and deploying sustainable
and demanding in safety and health. practices;
3) High penetration of Internet and - High transaction costs to build data

smartphone is fundamental for and systems for track-and-trace
technological applications. technologies.
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Transactional Transactional
4) Some farmers are taking initiatives to 2) Consumers’ scepticism about food

challenge conventional methods by safety claims is the biggest challenge
heavy-use of synthetic inputs and to any food business in gaining
natural resource in production. consumers’ confidence back.
5) The biggest challenge of quality food 3) Fresh food is very perishable.

is a bridge to the high-end market and Logistics is the main constraint of the
rewards for proper production. farm-to-table supply chain.
6) Consumers expressed a high interest 4) Due to the high demand for food
in the farm-to-table platform to acquire safety, competition is intensive. This
good food. project needs to conduct competitive
research prudently.
5) Openness to e-commerce for fresh

food has remains a question.
Organisational Organisational
7) Fundamentals of this project are 6) This project needs people who have
informed by proper research. This is a expertise in quality control, digital
valuable tool to approach key marketing and related technologies.
stakeholders. 7) Financial funding for any new
8) Background of the project owner is ventures is a big concern. This project
sale and marketing. It is helpful to needs to conduct early-stage finance
develop an innovative marketplace. analysis.
8) New ventures will operate in a

complex and uncertain environment.
On account of these opportunities and barriers to developing and commercialising a

farm-to-table platform, this project decides its business strategy, operation and key
activities to gain competitive advantages and achieve its vision as presented in
following sections.
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1.3. Business strategy imperatives

The business case will be constructed and guided by three strategic imperatives as
illustrated in Figure 36 to achieve the food trust vision.
Figure 36. Three strategic imperatives of the farm-to-table platform
Resilient
Business
Model
Innovative market
Connectivity
FOOD Sustaining
Excellent TRUST Customer
Supply Chain VISION Relationship
Optimisation Together safer
Traceability Together healthier
The first is to develop a resilient business model. A model enables to give its customers
the greatest confidence in food safety. It also upgrades farmers’ value chains throughout
an innovative marketplace.
The second is to build up and sustain customer relationships. This project will win
consumers’ trust by understanding their needs of safety and health.
The third is to organise the journey of food from farm-gates to consumers effectively by
optimising operation and advancing track-and-trace ability.
Finally, underpinning and driving these three strategic imperatives, the business case
put the food trust vision at the centre of every activity this project does.
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1.4. Business operation models

In the discussion chapter, the research reached the final decision on the business
model. This is a subscription to give consumers a right to access the farm-to-table
supply chain. This section will explain the core logic and processes behind the
subscription and how it works to create value for subscribers and capture value for the
firm and its strategic partners.
Subscription model - How it works.

The farm-to-table platform seeks to reconnect farmers and consumers through a
system that can increase the incomes of farmers while maintaining a fair price for
consumers. To accomplish this purpose, the operational model has two procedures.
Firstly, guarantee schemes assure quality of food at the beginning and encourage
community support sustainable productions. Besides the criteria that were defined by
this research in the discussion chapter, the farm-to-table marketplace will strictly
comply with the quality control process illustrated in Figure 37.
Figure 37. How the farm-to-table platform selects farmers.
1. DOCUMENT 2. ON-FIELD 3. RANDOM

SCANING ASSESSING SAMPLE TESTING
•Merchant •Production •Products

application •Logistics samples
•Certifications •Data system •Soil and water
samples
- Document scanning. Based on the selection criteria in the discussion chapter,

this project will have dialogue with farmers and assess all related documents such
as merchant application, certifications, testing results. Documents review is a
starting point to evaluate farmers’ ability and integrity.
- On-field assessing. This step technically evaluates farms’ capability in

delivering traceability and farm-to-table solutions. Subsequently, both parties will
set up roles and responsibilities in this business and point out what farms can
improve and what this project should assist farmers to serve customers better.
- Random sample testing. This step is conducted to manage risks and hazards
and control quality and food safety.
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Figure 38. How the farm-to-table platform works
Farm-to-table subscription model
Step 1. Choose a subscription period (*)
1 month 3 months 6 months

$3 $8 $12
Best value
Membership benefits
1. Unlimited discount 3. Bonus point

Save up to 30% on every Get $1 US bonus for every
order, every day. $10 purchase monthly.
2. Free shipping for orders 4. Food guarantee.
over $15 US in HCMC. “Don’t like it, we fix it.”
Step 2. “You order. We collect and deliver.”
Farmers Farm-to-table Subscribers

List-in marketplace
Order
Fulfil Shop by Receive
categories
Earn Feedback
Fulfilment centre
Collect, Pack, Delivery
Step 3. Customer service post-shopping experience

(*)
Pricing numbers presented here are business hypotheses.
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Secondly, the subscription process explains to consumers how this business works
and what benefits and obligations customers have when joining the farm-to-table
supply chain as illustrated in Figure 38. This process has three steps.
- Step 1. Pick up period. Anyone can activate their shopping accounts to join the
farm-to-table supply chain and make transactions. However, consumer-
subscribed members who pay the subscription fee will receive membership
benefits as listed in Figure 38 in previous page.
- Step 2. “You order. We collect and deliver.” This step describes the journey
of food from farm to table. Consumers shop and order food items from any
farmers with products’ transparent information. After noticing customers’ orders,
farmers supply ingredients to this project’s fulfilment centre. This centre gathers
ingredients and pack in boxes for delivery. Consumers can pick up their food
boxes at food stations on the way they go home; or the delivery team ships to
their home or office.
- Step 3. Post-shopping experience. Customer service staff handle properly any
customers’ concerns or operational disruptions to satisfy customers.
Both the quality assurance and the e-commerce service are core processes of this
business. These procedures set up relationships and expectations between the
platform with farmers and consumers.
Sustaining customer relationships

Sustainability, traceability and connectivity are the emphasise of this project to attract
customers and activate their subscription. However, it is just the first stage of customer
development. A successful business needs robust strategies that are not just to win
new customers, but to maintain their loyalty. Ideally, the strategies can expand their
customer base by word-of-mouth advocacy. Coming up with this idea, this business
employs the get, keep and grow tactics of customer development designed by Steve
Blank and Bob Dorf (2012).
- Get: Employ digital awareness and acquisition tactics while optimising customer
acquisition costs.
- Keep: Retain subscribers through loyalty programs, transparent product updates,
personalised food recipes, and engagement to sustainable development.
- Grow: Increase customer lifetime value by upselling, next-selling and cross-selling.
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Figure 39. How the farm-to-table platform endures customer relationships
Product updates
Loyalty program
CROSS-SELL
REFERRALS
NEXT-SELL
ACTIVATE
ACQUIRE
UP-SELL
DIGITAL
MARKETING KEEP CUSTOMERS
Personalisation
Engagement to Sustainability
GET GROW
CUSTOMERS CUSTOMERS
Source: Author’s modification from (Blank & Dorf, 2012)
A traceable supply chain model

The qualitative interviews revealed that some farmers in Group 2 and Group 3 of this
research are taking initiatives to sell fresh food directly to consumers, rather than trade
across many stakeholders from growers, aggregators, processors, distributors, retailers,
or restaurants. Following their footprints, this project will challenge the agricultural
landscape by a farm-to-table supply chain. The value chain agreement between farmers
and this platform is a fundamental aspect to deliver the food trust vision.
Figure 40. How the farm-to-table platform establishes the value chain.
Agribusiness and Storage and Retail and

processors delivery consumers
“Before the “On the “Beyond the Customer

farm” farm” farm” Collecting, Retailing,
developing
Warehousing packing, food and
Agricultural Cropping, Harvesting, delivering servicing
sustaining
inputs breeding processing
FARM F2T MARKETPLACE HOME
As illustrated in Figure 40, this agreement is based on the integration in business

operation. Instead of getting through many middle-men, the farm-to-table platform is
the unique and transitional point between farmers and consumers. It will design a
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technological toolkit to integrate activities of farms and this marketplace. Operating this
way shortens the traditional supply chain. The platform is used to substitute for some
of the activities currently done by middle-men. Moreover, it will empower farmers with
the right to involve, manage and control their own supply chain instead of totally relying
on aggregators or other intermediaries.
The key question of this supply chain model is: why would farmers who already have
a good relationship with a middle-man want to change to the platform? The positive
signal from farmer interviews is that they are open to new businesses who can help
them in marketing and distributing their products. However, the project fully
understands that the margin structure is the most critical point to switch farmers
producing high-quality products to the platform. The price comparison and the cost
investigation must be performed carefully before offering the platform to farmers.
Furthermore, the project anticipates the situation that the existing large farmer groups
might want to be the owners of a platform – or whether the small farmers or even
middle-men might have interest in setting up a platform. The opportunity is open to
all actors of the supply chain. Also, this is where competition for the business model
will likely come.
Overall, when deploying these operational models, the farm-to-table platform will be a
trusted quality assurance agency to consumers and a market developer and a logistics
provider to farmers. It also foresees the farmers’ switching barriers and the sources of
competition to the farm-to-table platform. The next section will elaborate on these
operational models further to decide the key activities of this business.
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1.5. Business activities

The farm-to-table model differs from retail or grocery supply chains because it rethinks
the traditional supply chain model. By matching consumers’ demand and farmers’
product availability, this project will eliminate the need for intermediaries such as
aggregators, distributors, wholesalers. In the first step of product validation and
development, this report describes key business activities that will be executed to
deliver the project’s vision and value propositions. This section’s structure follows three
imperatives of the farm-to-table platform’s business strategy and operational models.
Making the business model resilient

The first is a flexible ordering model. This business generally operates a flexible
ordering model. Customers sign up to a subscription period. They can customise for
parameters such as household size, food preference or delivery time. Customers can
pause or update shipping information. They are only required to pay for actual
deliveries.
The second is a cool supply chain. Safety and freshness are the primary factors
influencing customers’ decision-making when they obtain fresh food. While
procedures of selecting farmers and quality control determine sources of quality
products, a cool supply chain will allow this project to deliver ingredients with a high
level of freshness. The ingredients are collected and packed in the refrigerated
fulfilment centres. From there, fresh food boxes are delivered by using insulated
packaging or refrigerated vehicles.
The third is just-in-time delivery and zero inventory. Fresh food items are
perishable. This project needs to work closely with its network of farmers, many of whom
will be local suppliers, to ensure the farm-to-table platform can acquire ingredients on a
just-in-time basis and quantities required. Farmers only commit to a sale when
customers confirm their orders. A just-in-time model allows this business to operate with
a small inventory and focus on collecting and packaging at fulfilment centres instead of
warehousing operations there. Typically, dry goods are delivered once a week to
fulfilment centres and perishables are on daily basis. The food stations assemble and
pack the individual orders with all necessary ingredients. Finally, food boxes are
delivered by an internal delivery team or logistics third-parties.
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Sustaining customer relationships

The fourth is product updates and innovations. Core products will consist of
recommended meal recipes giving customers consultation on quantities and ingredient
choices that are suitable to their household size, eating preference, personal dietary
and lifestyle. For instance, it can be pork-free or low calories, etc. This business also
complements core offerings with premium or seasonal food boxes for Christmas, New
Year, customers’ birthdays or any special holidays. In the future, the farm-to-table
marketplace aims to provide signature and global food from farms overseas.
The fifth is data-driven to design personalised food boxes. After experimenting
with the MVP and penetrating to market successfully, the next stage of this project is to
launch the prime subscription program. With this programme, customers will pay for their
food boxes plan instead of right to access the farm-to-table supply chain. This service
creates value for customers by meal solutions that are simple, delicious and inspiring to
cook. This program’s design relies on both qualitative and quantitative methods. The
recipes are created by using customers’ historical transactions and their ingredient
ratings and combines inputs from chefs’ and nutritionists’ experiences. Meal solutions
will reduce customers’ stress for meals’ planning and shopping while at the same time
forecasting demand more accurately and minimising food waste.
How to deliver a traceable and optimised supply chain?

The sixth is close cooperation with growers. This project will work closely with
growers and producers to make sure customers receive fresh, seasonal and healthy
ingredients in the exact quantities needed. The subscription lock-in period and
information provided by customers about their household size and preferences allow this
project to estimate demand with a sufficient degree of accuracy. Demand forecasting
will be further improved when customers’ historical transactions are established.
The seventh is a traceable data system. As requirements of agricultural
certifications, records and recordkeeping is a compulsory step that farmers must do
with their production. For example, Vietnamese Good Agricultural Practices - VietGAP
(2017) is a common certification in Vietnam. For fruit and vegetable cropping, VietGAP
regulates farmers must record their production’s step by step including planting,
fertilising, pests controlling or harvesting with clear performance indicators. Records
must be archived in 12 months for purpose of traceability and product recall if required.
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Grasping the regulation, the farm-to-table platform will design a function that enables
the ability to integrate with farmers’ data systems or allow farmers to create their own
contents on their digital farms. Farmers can update their crops with their note-taking
and photo taken by smartphones. Crop’s information will be organised in simple
templates that are understandable to everyone. It encourages farmers to produce
contents for their owned story-telling and branding as well.
In the next section, this report defines key performance indicators (KPIs) used to
measure the result of these business activities. The monthly dashboard is important to
monitor business plans and control resources. The measurement system consists of
both financial indicators and non-financial indicators.
1.6. Performance measurement system

For a new business entrant, gaining market share from established competitors is a
primary and vital task. Therefore, the performance measurement system of this project
mainly consists of KPIs measuring the development of customers base.
Financial indicators
The most important objective of a new business is winning market share. Financial
indexes include:
- Revenue, which is amount receivable for goods supplied, stated net of

promotional discount, bonus credit, refunds and VAT. It indicates a sustainable
market position and a long-term increase in the corporate value.
- Contribution margin, which is revenue minus cost of goods sold and fulfilled
expenses. It evaluates operational performance and margin development before
marketing and administration costs.
- EBIT (Earnings before interest and taxes), which is to evaluate profitability.
- Net cash flow, which is to manage cash flow generated by this business.
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Non-financial indicators
The results of financial objectives are influenced by numbers of non-financial factors.
Advancing the multiplication in Figure 12 to estimate sale number in the methodology
chapter, this project transforms the formula’s variables into performance indicators that
fit the subscription model. This project will forecast its sale projection based on these
KPIs as the formula shows below.
Figure 41. Subscription’s sale formula
Sale ($) Number of active Average revenue

customers per customers ($)
Sale ($) Number of Average order

deliveries value ($)
- Number of active customers is number of identified customers who pay the

subscription fee and make transactions in a quarter. Total customers are existing
customers plus new customers minus leaving customers.
- Average revenue per users is revenue divided by numbers of subscribers in a

period.
- Average order value is revenue divided by numbers of deliveries in a period.
Moreover, the below KPIs determine the long-term growth of a subscription model.
- Customer acquisition cost (CAC) is the total amount of spending to acquire

one new customer. The subscription will be profit-making, if CAC is lower than
profit receiving from a customer.
- Lifetime value is the total revenue from one customer during their whole
membership period. This number determines the sustainability of subscription
model that how it retains customers and increase their expenditure here.
In short, the business will become what it measures. Monthly or quarterly review of
the dashboard of KPIs will orient the business going in the right direction to its goals
and vision. However, in this progress, this project also updates market t rends that
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influence the customer base such as openness to e-commerce, price comparison,

brand recognition and customers’ referrals. Both improving internal KPIs and
capturing market trends are essential. The next three sections of this chapter will
elaborate on these strategic and operational models to further validate the market
feasibility of this subscription model, develop suitable offerings and identify
resource requirements. The basic approach of these next three sections is
philosophies of the lean start-up as presented in the theories section of the
Introduction chapter. Through this approach, this project concentrates on robust
development of the minimum viable product (MVP).
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2. MARKET VALIDATION AND DEVELOPMENT

2.1. How are customers currently solving the problem?
Based on works of prior literature and confirmation of the consumer survey,
Vietnamese households’ approaches to prevent risks to their families from food are
summarised as shown in Table 20. In the discussion chapter, customers segments of
a farm-to-table supply chain are people who experience shopping at supermarkets,
organic stores, or self-provision, as seen in number 2 and 3 in this table.
Table 20. Vietnamese households’ responses to food safety
Consumers’ response Advantages Disadvantages
1) In the traditional channel, It is convenient. The temporary approach

consumers make People can come to cannot eliminate all food
purchases based on wet markets daily risks causing by microbial
their experiences about and acquire food contaminations. Moreover,
physical appearance of quickly and easily. traceability is the biggest
food, and always wash concern here; consumers are
carefully before cooking not aware where food is from
or consuming. and how it is produced (The
World Bank, 2017).
2) Supermarkets and safe Consumers feel It is often more expensive,

food outlets, organic more confident in ranging from 30% higher
stores are emerging and these organisations’ than conventional offers from
attracting the younger safety claims and wet markets. However,
generation in key cities. certifications. traceability is a big concern
(Werthesm-Heck &
Spaargaren, 2015).
3) Some families use small Consumers can It is not a well-rounded

gardens or rooftops to trust in their own approach in terms of variety,
grow vegetables for self- supplies. nutrition and professional
consumption. Some farming (Werthesm-Heck &
obtain fresh foods from Spaargaren, 2015)
their relatives in
hometowns.
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2.2. Who are ideal subscribers?

To assist the MVP development, this project narrows down the customer segment to an
ideal customer group for the MVP. Following the value of food trust that “think and act like
a consumer”, the MVP targets to early-adopted subscribers as described below.
Table 21. Ideal subscriber’s worksheet
Who are they?

An ideal subscriber is female. She is 30 years old, married and has two children. She
is working for a bank and finance firm in Ho Chi Minh City. Her income is around
$1,000 US a month. Shopping at supermarkets, premium stores or e-commerce
sites is familiar to her.
What are their problems and how do they solve them?

Due to high-profile scandals and ubiquitous news of food safety and food-borne
diseases on media and social network, she lost her confidence in safety of fresh food
feeding her family. In the past, she visited a wet market near her apartment to pick
up fresh food. Currently, she usually buys at supermarkets or organic stores twice a
week to feel better about food. Sometimes her parents send boxes of fresh food
grown by their farm to her. The boxes are the best choices, but they cannot
sufficiently fulfil her family’s demand.
What is their motivation?

Keeping her family safe and healthy is the most important thing; therefore, she wants
to know more about food she is eating and feeding her family.
Source: This project’s templates
This description is a portrait of an early-adopted subscriber when developing and

testing the MVP. To recruit more trial users, this project will target a wider range of
demographics as below.
- Their age range is from 25 to 35 years old. They are married. They have one or
two children. They probably obtain stable incomes and have decent jobs. They
think of family, health and environment. They also understand their lifestyle
clearly.
- Employment sectors can be bank and finance, accounting, human resources,
healthcare, and marketing. These jobs are often in offices and involve interaction
with the internet or electric devices.
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- Monthly income is around $1,000 US or higher, compared with $456 US GDP capita
a month of Ho Chi Minh City (Hang, 2018). This salary group accounted for 31% of
respondents in the consumer survey. It is a high-end niche of the MVP.
2.3. What are barriers to switch consumers?

The decision-making process is the most critical factor influencing to consumers in
acquiring fresh food. As presented in the discussion chapter, consumers easily obtain
experience about the quality of fresh food by few trail purchases. Then the MVP will
focus on their decision-making process at the early stage of products development.
- The first barrier is customers’ satisfaction with food safety and freshness.
- The second barrier is convenience in shopping experience, on-stop offerings, and
customer service post-shopping.
- The third barrier is the subscription fee and price comparison.
- Lastly, operating like “software as a service”, the business case must anticipate
issues related to e-commerce such as delivery costs, delivery speed and
payment methods.
2.4. How competitive is the market?

Embracing consumers’ concerns and their reactions, businesses and new entrants
selling vegetables and meat under safe and clean standards are both presented in Ho
Chi Minh City (Vietnamnews, 2018). For the high-end market, organic and premium
food has become a new profitable space for food enterprises. By employing the five
forces concept (Porter, 1985), the market landscape is uncovered.
- Suppliers’ power. The bargaining power of fresh food suppliers is low because
they need to improve their position in the food value chain and increase chances
of market access. The challenge to this project is how to find out farmers who
produce food properly and then build partnership with them.
- Consumers’ power. The bargaining power of consumers is high. Due to the
fragmentation of the food system, consumers have abundant choices. However,
they lack confidence in safety and quality claims.
- Competitive rivalry. Although opportunities for food businesses mitigating food
safety is huge, the degree of rivalry from existing food producers is high. This
market has no predominant players. This industry is operated by millions of small
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producers and retailers who are under an intensive race to win consumers’ trust
and build up their reputation.
- Threats of substitute products. Fresh food such as meat, fish, vegetable or fruit
are the basic needs of human beings, then there are no alterative options.
- Barriers to new entrants. The findings of this research and prior works of
literature showed that consumers demand innovative solutions to improve their
safety and health. Moreover, the regulatory framework and media support
adopted technologies to address the public concern. Then barriers for new
entrants is low.
This industry analysis revealed basic insights of the market where this project will battle
for its food trust vision. By positioning as a digital channel, the farm-to-table platform’s
MVP will move upmarket to deliver performances that customers of organic stores and
premium food stores are requiring and conquer those who are sourcing fresh food from
family or their network of friends.
2.5. How do similar businesses work?

It would be perilous to ignore or downplay competitors’ jobs on the market. At the stage
of designing the MVP, this project needs to understand what competitors are doing. After
many studies, this project identified two businesses that have similar ideas of traceability
and sustainability in Ho Chi Minh City as presented in Table 22 and 23.
The weakness of these worksheets is that they are only consist of brief information
about competitors by searching online. To obtain a prudent and accurate evaluation of
what competitors are doing and what this project can improve better, the project team
needs to experience their offerings by doing some real paying trials in Vietnam.
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Competitor name: HAPPY TRADE, Ho Chi Minh City, Vietnam
Point of sales: Website, Facebook
Company’s brief description
Happy Trade is a fresh food exchange platform (www.happytrade.org) founded in

2016. They aim to be a trusted e-commerce site and a connection between
producers and customers. They focus on organic products only with both fresh food
and packaged food. Traffic sources to their landing page are organic search 88.5%,
direct 10.9%, social 0.4%, others 0.2% (SimilarWeb, 2019). The average transaction
that they can offer free shipping is $15 US.
Areas which this competitor excels
- Building a business network. They established a wide network of producers who

are carrying out organic production.
- Providing agricultural knowledge. They focus on sharing knowledge and giving

consumers guidelines on how to obtain quality and healthy food. This is their
point of differentiation to retain consumers.
Areas which this competitor could use some improvement
- Traceability. They claim that their products are 100% traceable, but this function
is not clear to audiences.
- Connectivity. Their business mainly focuses on food retailing. The connection

between farmers and consumers is blurred.
How will this project create products that outshine this competitor?
- The farm-to-table marketplace will deploy clear value propositions of traceability

and connectivity.
- This project emphasises fair trade exchange and sustainable development.
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Competitor name: Xanh Shop, Ho Chi Minh City, Vietnam
Point of sales: Website, Facebook, Instagram
Company’s brief description
XanhShop is an enterprise that operates supply chain management for quality agro-
products in Vietnam. They aim to spread knowledge of organic production to
eliminate bad effects on community and environment. Their selling products are
organic with both fresh and packaged items. Traffic sources to their landing page are
direct 56.4%, organic search 18.5%, social 24.3%, others 0.8% (SimilarWeb, 2019).
The average transaction they can offer free shipping for is $10 US.
Areas which this competitor excels
- Building a business network. They establish a wide network with producers and
farmers who are carrying out organic production.
- Quality assurance system. They create credit for their quality control system and
make it friendly to consumers. Consumers can recognise their standard levels by
labelling signals (green, yellow and white).
- Digital marketing. Their sources of traffic show that XanhShop effectively does
digital marketing, especially with their website and social network.
Areas which this competitor could use some improvement
- Point of sales’ interface. It needs to be a friendly and clear shopping journey to

consumers. (www.xanhshop.com).
How will this project create products that outshine this competitor?
- This project will design friendly mobile touchpoints to deliver value propositions.
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In conclusion of the competition analysis, this project identified three important

points of the market that the farm-to-table marketplace will enter.
- Firstly, this is an existing market. To enter this market, this project needs to
differentiate itself and create creditability to challenge established incumbent
businesses successfully. Demand creation through the sale channel’s activities
will be very competitive. This is critical to maintain the farm-to-table platform and
gain a market share from existing rivals.
- Secondly, consumers are under-served. Consumers are frustrated with the food
safety situation while they are wealthier and more demanding in health and
nutrition. Even though they display a willingness to pay more for enhancements
that can mitigate their concerns, this platform must be excellent in converting
interested people into paying customers.
- Thirdly, intense competition in the fresh food category is driven by safety, health
and trustworthiness. New and improved products, services or even business
models were introduced to consumers. Additionally, food companies are thinking
of integrating their value chain and connecting with the market more directly to
control quality of food better (Price Waterhouse Cooper, 2015). These market
signals show the movements and trends of competition.
Through the customer segment and market competition analysis, this project fully
understands that in the fresh food category, targeted consumers are not willing to
switch to the new offerings because it is less expensive. Primarily, food businesses
must rise and prove their quality and safety to customers.
2.6. How big is the market?

The investigation about the size of market is an important but tricky step. The
estimation helps this project shape financial goals, estimate future corporate value and
define resources requirements. However, data availability is the biggest challenges for
this project to forecast the size of the market accurately. It would be ideal if this project
could find out three market size indexes as recommended by Steve Blank and Bod
Dorf (2012) as illustrated in Figure 42. The total addressable market is how big the
whole market is; the served available market is how many the proposed business
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model can reach with its sale channel; and the target market is how many people will
be the most likely customers.
Figure 42. Market size analysis framework
$
$
$
Total addressable market Served available market Target market

Source: Author’s modification from (Blank & Dorf, 2012)
After engaging in thorough research of industry analysis reports and market research
reports, which even considered adjacent markets, this report cannot work out these
numbers. This is an uncertain condition that this project must take risks to make
decisions. However, there is some credible information showing that the size of the
market is huge.
- Firstly, in terms of geography, the official statistical number of the population in Ho

Chi Minh City is more than 8.4 million citizens, but the estimated people living and
working here is more than 13 million (APEC 2017 National Secretariat, 2017).
- Secondly, according to research by the University of Adelaide, Australia (2018)

which surveyed 1,000 households in Ho Chi Minh City, the top three categories
of their food expenditure monthly are meat (all kinds of meats and fishes accounts
for 37.27%), vegetable (13.61%), fruits (7.76%). This indicates that fresh food
occupies 58.64% of food expenditure in Ho Chi Minh City, and spending for the
remaining foods is 41.36%.
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Alternatively, this report uses findings of primary data and research discussions to
determine key metrics that the farm-to-table platform aims to achieve.
Table 24. Assumptions of customer base
Number of active subscribers for MVP testing 40

Number of active subscribers at the beginning of the 1st
100
month
New net subscribers in month 1 50
New net subscribers’ growth rate per month in a year 10%
Shopping frequency per customer per month 8 times
Source: Author’s assumption
Table 25. Assumptions of average purchase value
Average per % customers Revenue per customer

Pricing plan
order (USD) per plan per month (USD)
Big basket 15 40% 120
Average basket 10 40% 80
Small basket 5 20% 40
Source: Author’s assumption
Noticeably, only the number of active subscribers for MVP testing is firm. Other
assumptions will be justified or adjusted depending on the result of MVP testing. Based
on these assumptions, the revenue stream of this project is established as presented
in the template on the next page.
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Table 26. Assumptions and revenue steam of the farm-to-table platform
ASSUMPTIONS REVENUE
Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 2019
CUSTOMER BASE (m: month) CUSTOMER BASE
Subscribers at beginning of 1st m 100 Subscriber beginning in 1st m 100 150 205 266 333 407
Net new signups growth per m 10% New signups
Net new signups in m 1 50 New net signups growth per m 50% 10% 10% 10% 10% 10%
Shopping frequency per customer per m 8 New net signups in a m 50 55 61 67 74 81
Subscribers end of month 150 205 266 333 407 488 488
PURCHASE VALUE REVENUE

Average % Revenue Active subcribers per month
per order customers p.m Subcribers - Big basket 45 62 80 100 122 146 146
(USD) per basket (USD) Subcribers - Average basket 90 123 160 200 244 293 293
Big basket 15 30% 120 Subcribers - Small basket 15 20 26 33 41 49 49
Average basket 10 60% 80 Revenue (USD)
Small basket 5 10% 40 Subcription fee (Min $2 per m) 300 410 532 666 814 976 3,698
Subcribers - Big basket 5,400 7,440 9,600 12,000 14,640 17,520 66,600
Subcribers - Average basket 7,200 9,840 12,800 16,000 19,520 23,440 88,800
Subcribers - Small basket 600 800 1,040 1,320 1,640 1,960 7,360
Total revenue per month (USD) 13,500 18,490 23,972 29,986 36,614 43,896 166,458
TOTAL CASH INFLOW (USD) 13,500 18,490 23,972 29,986 36,614 43,896 166,458
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3. PRODUCT VALIDATION AND DEVELOPMENT

3.1. What features does the MVP need?
Operating like software as a service, the MVP of this project consists of two elements:
physical foods and farm-to-table services. Procedures of quality control and product
fulfilment behind the platform make sure consumers receive fresh, seasonal and
healthy ingredients with right quantities ordered. The business model design section
described these processes quite precisely. Therefore, in this section, the report
concentrates on the features of farm-to-table services. These business activities are
digitally-based, technological and data-driven. The prototype of the farm-to-table
platform contains both common features of a normal marketplace and differential
features of this business to deliver value propositions. Note that the researcher does
not have the background in information technology, hence this report presents MVP’s
guideline and requirements rather than technical aspects. In a general sense, a
marketplace must:
- Be friendly in its user interface and experience. MVP’s appearance and
functionality designed psychologically.
- Be responsive with technology for any electric devices. It can work great on
desktop, smartphones or any electronic devices.
- Encourage user interactions to create connectivity.
- Guarantee data authorisation and security. To fully use a marketplace, a user
must sign up and provide personal details such as name, gender, birthday, email,
phone number and payment account. It is critical to save users’ data securely.
Common features of an online marketplace
By getting consultation from the researcher’s personal network and referencing a
selection of platform building services, this project found out common features that a
digitally-based marketplace must have, as listed below.
- User experience and user interface design. This includes the MVP’s logo, colour
theme, and functionality for each type of users. They are site visitors, paying
customers and producers.
- Database, application design and deployment scripts. Visitors can easily sign up
by their social accounts, email, phone numbers.
- Business processes include managing product listings, ordering, booking,
payments and pay-out methods and feedback.
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Differential features of a farm-to-table marketplace

- Functionality to let farmers become publishers. Individual farmers will own a
digital farm on the farm-to-table platform for two purposes. Firstly, it allows
farmers to be storytellers about their motivation, expertise and production
methods. Secondly, it makes products traceable. Consumers can trace back to
their farm locations, cultivation method, standards or certifications, seeding date,
harvesting date, and expiry date. This function will enhance farmers’ abilities in
regards to market access and branding.
- The farm-to-table platform integrates with an advanced track-and-trace
technology. Digital solutions such as QR codes scanning which link to products
information and farmer navigation will open new chances for customers’
communication and feedback. Therefore, with the right choice of innovative
traceability practices, this project will create differentiation to assure quality of
ingredients and gather information about food’s journey to consumers. The
applications also offer great potential for real-time recording and on-line analysis
(PricewaterhouseCoopers, 2015) that help this business optimise demand
forecasting, warehousing and ordering processes.
The above-mentioned features are necessary to position this business and create
value addition as a trusted marketplace and a farm-to-table solution for customers’
fresh food acquisition.
3.2. How is MVP tested?

As mentioned in the introduction chapter, this project applies the lean start-up
approach to validate business hypotheses. During the process, running MVP to receive
feedback from early-adopters is the most critical stage. The cycle of Build, Measure
and Learn (Ries, 2011) of the lean start-up concept will be applied.
Build
- The farm-to-table platform with two basic versions. These are a website and a
mobile app.
- The basic fulfilment centre with the necessary pieces of equipment: refrigerators,
packaging materials, insulated boxes, and a vehicle.
Measure
- A/B testing of what version users prefer;
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- Customers and farmers’ feedback on farm-to-table offerings;

- Financial and non-financial KPIs of operational systems;
- Functionality of product features;
Learn
- MVP assessment: Can it work? Can it work reliably? Can it work cost-effectively?
And can it be improved?
- Actions to improve the MVP: What features should be raised or reduced
standard? What features should be created new? What features should be
eliminated?
The cycle will be implemented constantly before reaching a final design. At first, the
project will recruit 10 early adopters for the MVP’s testing and enlarge this group up to
40 ideal households. This project will also recruit and sign partnerships with 3 farmers
at suburban areas of Ho Chi Minh City. These farmers are growing multiple crops and
qualify for selection and quality control procedures. The cycle will create a co-design
process with customers and producers over a period of 120 days.
3.3. What are the costs to build MVP?

The MVP consists of both physical and digital features. Hence, to build the MVP, costs
related to MVP design consist of both physical equipment for the fulfilment centre and
digital touchpoints for the farm-to-table platforms.
Table 27. Costs of MVP design
One-time costs Monthly costs

Digital - Domain name; - Hosting server fee;
platform - Developer and designer’s - Other unidentified costs related
service for websites and to technical issues.
mobile app;
- Traceability application;
Fulfilment - Refrigerators, insulated - Packaging materials;
centre boxes, and shipping - Warehouse and office rental
vehicles. fee;
- Other costs related to logistics.
The details of quantities or amount of expense will be worked out by the start-up team
within Vietnam context.
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3.4. Intellectual property protection

Ideas validated and knowledge uncovered by this research are important business
assets of this farm-to-table supply chain project. Considering the innovation and
commercialisation process, this report does not create works that can be protected by
copyright. However, the process of MVP’s design and testing will arise the intellectual
property (IP) of the new venture. Studying the Law on Intellectual Property, Vietnam,
2005, the IP rights of the new venture will include:
- Copyright: design of the platform, and digital programs or the application behind
them;
- Trademark: name, logo, mark, or motto identified with this project;
- Trade secrets: customers list, business plans, product research and
development, marketing techniques that are unique and create unfair advantages
to competitors.
Aside from this, the founders will openly share the idea with others to deploy this
project. It will pose threats to the commercialised intent. Therefore, a non-disclosure
agreement (NDA) between parties to safeguard discussions is necessary. The
information specified by the agreement will not be disclosed to third-parties. NDA binds
parties to keep this business plan confidential.
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4. RESOURCE REQUIREMENTS AND RETURN

4.1. Skills and knowledge required
New ventures will operate in a complex and uncertain environment. In many cases,
business founders need to take risks and accept situations with unclear outcomes and
lack of information (Weber, 2016). Therefore, instead of relying on decision-making
biases and intuition or on the overconfidence of some individuals, this project will build
an adequate start-up team to overcome challenges of the business environment and
market competition. Considering the nature of this business and its value creation
activities, the start-up team consists of at least four members coming from four
backgrounds and functioning as presented in Table 28.
Table 28. Start-up team’s functions
Members’ Main skills and knowledge Stakeholders
function required worked with
- Business and launching plan; - Farmers;
1. Business - Recruit members; - Logistics third-parties;
development - Build business network; - Packaging suppliers;
- Negotiate with suppliers; - Equipment suppliers;
- Raise funding and capital; - Shareholders;
- Plan and execute marketing - Customers;
campaign to acquire - Social network
2. Digital subscribers; platforms;
marketing and e- - Decide on organic sources or - Media agencies;
commerce paid-media to attract traffic; - Influencers;
- Produce and manage contents;
- Handle customers concerns;
- Manage the operation and - Farmers, producers;
supply chain; - Quality assurance and
3. Agriculture and
- Recruit farmers and producers; testing centres;
food quality control
- Control product’s quality; - Logistic third-parties;
- Packaging suppliers;
- Develop and maintain system - Farmers;
and database; - Technological providers;
4. Information
- Data analysis and security;
technology
- Deploy traceability to farmers
and consumers;
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With six years working experience, the project founder has established a solid
background in business development and customer management, and therefore will
take the role of business development in the start-up team and recruit members and
business partners who fit the functioning structure. However, there is no clear boundary
among these functions. The core team must be fully aware and ready to deal with multi-
functional tasks at the early stages of product development and a new venture
establishment.
Additionally, to nurture our capabilities, on one hand, we improve our set of capabilities
by self-studying, knowledge sharing or enlarging the founding team. On the other hand,
we must take advantage of external sources through an advisory board. The board is
an informal group of independent people who are not directly involved in the business,
but passionate about this project and experiential to provide advice which the start-up
team lack of expertise. An advisory board also benefits this business in regards to
credibility and networking.
Lastly, team building is the first and the most important task to deploy the farm-to-table
supply chain.
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4.2. Expenses and investments required

By completing this thesis, the farm-to-table project set the first milestone of innovation
and commercialisation. This relates to a comprehensive conceptual business model,
strategies and identical value creation activities. For the next stages, the MVP
development and the new venture establishment will require actual expenses and
investments, as listed below.
Table 29. Costs and expenses required
Stages Costs and expenses required
Phase 1. 1. MVP design and development

MVP development - Domain name, hosting server
- Website and mobile app design

- Traceability and data system
2. Fulfilment expenses
- Equipment
- Packaging materials and design
- Logistics service: staff or outsourcing
Phase 2. 3. Costs of goods sold

Testing and validation 4. Sale and Marketing expenses
- Early-adopter acquisition cost
- Paid-media
5. General and administration expenses

- Start-up team's salary
- Office rental
6. Operating loss
- Damaged goods
- Order cancellation

The project team will work out details of these expenses by quotations from suppliers
and build up a projected cash inflow and outflow.
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4.3. Capital funding

Capital funding is always a big challenge to new ideas, new ventures, and small
enterprises. This project is not an exception. Fortunately, in recent years, Vietnam has
become a hotspot of start-ups in the Asia Pacific region with a strong commitment from
the Vietnamese government to build a start-up nation by 2020 (VNexpress, 2016).
These policies established the eco-system for start-ups in Vietnam. Now,
entrepreneurs have a number of preferences for sources of capital funding from
venture capital firms (accelerators, pre-seeding and seeding) to government
programmes and grants (Topoca Founder Institute, 2018). Evaluating both the pros
and cons of each funding method and the nature of this project which creates a social
impact by addressing food safety, the new venture will prioritise the list below in order.
- Government grants: with proper research and knowledge gaining from Victoria
University of Wellington through the New Zealand Aid Scholarship, this project
aims to approach sponsors and support from other government programmes
such as Vietnam Silicon Valley (www.siliconvalley.com.vn), Innovation
Partnership Program (http://ipp.vn/en);
- Equity crowdfunding: this project can raise capital from its farmer partners and
early-adopters who have a long-term interest in the farm-to-table supply chain;
- Equity financing from venture firms: with the government’s strategies of a start-
up nation, venture capitals are spreading and booming in Vietnam. They organise
start-up competitions to attract new ideas and promote themselves.
(https://sharktankvietnam.com/);
The start-up team will take all reasonable precautions and exercise due diligence to
evaluate advantages and disadvantages of each funding method and each investor
before approaching. This project looks for a partnership and long-term commitment
rather than temporary benefits.
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4.4. Timeline of MVP development

This project will be deployed in Ho Chi Minh City, Vietnam with the timeline below.
Table 30. The farm-to-table project’s timeline
Activities May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Startup team
building
Business case's
strategy, model
and activities
finalising
Legal process of
business
registration
Investors
approaching and
recruiting
MVP design and

development
Early-adopters and
farmers recruiting
Build - Measure -
Learn cycle
High-quality MVP
version finalising
Launching plan
and digital market
preparation
Launching
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THE BUSINESS CASE’S SUMMARY

The biggest accomplishment of this report is innovating a farm-to-table marketplace to
facilitate trade and connection between farmers and consumers more directly and offer
consumers a great service of tracking back all pathway of their fresh food. Firstly, the
business case outlined the farm-to-table project’s goals, visions and strategic
imperatives. By putting the food trust vision at the centre of every value creation
activity, this report designed the operation model of the farm-to-table platform,
developed the customer relationship strategy and established the value chain
agreement between the platform and farmers. Secondly, employing the lean start-up
philosophy, the business case emphasised on the product and market fit and the
minimum product development to obtain early interactions with ideal customers. Lastly,
this report worked out the resources that required to demonstrate this project in
Vietnam. The start-up team building is the most important task that this project will do
first when deploy the farm-to-table supply chain in Vietnam.
To articulate the business case clearly to the project’s key stakeholders and potential
investors, the business model canvas in the next page visually demonstrates nine
building blocks of the farm-to-table platform. Moreover, the business case developed
strategies to obtain a sustainable growth and competitive advantages under the
intense competition.
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BUSINESS MODEL CANVAS OF THE FARM-TO-TABLE PLATFORM

Strategic partners Key activities Value propositions Customer relationship Customer segment
Farmers who qualify - Operating a flexible The farm-to-table With farmers: the value Ideal customers and
the selection and quality ordering system. platform will answer chain agreement will set early adopters are:
control processes. Customers pick up daily questions of up the partnership - Demographics:
- Implementing subscription period and Vietnamese regarding between farmers and the female, married,
standardised order; the farm-to-table where, how and from platform. “Farmers having one or two
productions; platform collect goods whom they can produce quality food; the children, from 25 to
- Growing multiple and deliver; purchase quality food platform develops 35 years old;
crops of vegetables; - Sustaining customer by proposing two markets and provides - Employment sectors:
- Obtaining certifications relationship by products values: logistics solutions.” accounting, finance,
of safety testing; updates, innovations and - Proving the ability With customers: the bank, human
- Partnership personalised offers; to trace all platform is a trusted food resource, marketing
agreement; - Closely working with pathway of food by quality assurance by a and healthcare.
- Others: data system growers and producers distributing reliable traceable and transparent Income per month is
and logistics facilities. to operate a just-in-time information of food system. around $1000 US.
model and a traceable through a digital - Shopping behaviour:
“Get – Keep – Grow”
product system. application; shopping frequency is
activities will recruit,
retain and develop a twice a week,
farmers and consumers average purchase for
community.
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Team capability Key resources - Connecting Channels fresh food is around

required: farmers and $10 to $15 US;
This project needs: - The farm-to-table
- Business and network consumers by - Their fear is lack of
- A start-up team of 4 platform is an online
development; bringing farmers’ confidence in the
members and an marketplace.
- Digital marketing and e- story as well as safety of food. Their
advisory board; - The two main
commerce planning and fresh and quality solution is instead of
- Capital funding for MVP touchpoints are the
execution; products from farms website and the mobile wet markets, they
development with a
- Agricultural and quality to consumers; obtain fresh food at
digital platform and a application;
control knowledge; The farm-to-table supermarkets,
basic fulfilment centre; - Digital marketing such
- Information technology project’s call-to-action organic and premium
- Intellectual property of as social networks and
expertise. message is: food stores or self-
research and search engine
provision.
development. “Together safer, optimisation is applied
- Their motivation is the
together stronger.” to target users and build
health and safety of
brand and reputation.
their family.
Cost structure Revenue stream

Fixed costs: - Subscription fee;
- Costs of MVP design and development; - Food and ingredients boxes deliveries;
- Costs of the fulfilment centre building and operating. - In the future, the prime subscription program with
Variable costs: personalised meal solutions will be considered.
- Costs of goods sold;
- Cost of sales and digital marketing: promotion and paid media;
- General and administration expenses: office and staff salary.
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THE GROWTH STRATEGY AND THE COMPETITIVE STRATEGY OF

THE FARM-TO-TABLE PLATFORM
Primarily, food trust is based on quality and safety assurance. The food trust vision is the centre of every activity this business does.
GROWTH STRATEGY: Revenue growth to achieve a sustainable market position and a long-term increase in corporate
value.
- Enlarging the customer base: focus on net active subscribers every quarter. “Increase new customers, reduce churned
customers, and spending customer acquisition cost effectively”;
- Increasing customers’ lifetime value: retain customers, increase in average customer revenue and average order value;
- Expanding market: enter to high-end markets in the short-term, penetrate to mainstream markets together with geographic
expansion in the long-term.
THE FARM-TO-TABLE FLATFORM
COMPETITIVE STRATEGY: the platform’s differentiation to challenge established incumbent businesses and to prevent
imitation from other new entrants.
- A traceable product system to distribute products’ information to customers reliably and cost-effectively;
- Data-driven designs to personalise the platform’s offerings to customers;
- Close collaboration with growers and producers to establish an optimal and smooth supply chain and operation processes.
This is the key focus of product development and competition.
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CHAPTER 7. CONCLUSION
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In recent years, food contamination, food-borne disease and pesticides or chemical

residue in agricultural products have become some of the top issues in Vietnam. The
food safety issue has seriously affected consumers’ confidence and Vietnamese
quality of life. Therefore, the research in this report was conducted to find out a solution
that fits the problem or contributes to mitigating food safety. After investigating the
problem-solution fit, the business case was constructed to validate the market-product
fit and develop a suitable business model that can give consumers the greatest
confidence in their food.
Key essence of the research findings
The primary aim of this research is validating the feasibility of the farm-to-table supply
chain idea as an effective tool to address food safety in Vietnam. This project
understood that to address food safety successfully, any solutions must start from
production capability and end at consumer satisfaction. Hence, this research employed
a qualitative method to explore the vegetable supply chain in Ho Chi Minh City and a
quantitative method to measure factors influencing consumer satisfaction.
The qualitative study used in-depth interviews to explore farmers’ production

practices and expectation in rich details. The data collection and analysis produced
important materials to shape a farm-to-table supply chain.
Firstly, this study categorised farmers into three groups based on their existing
practices and perspective about food safety and sustainability in agriculture. Group 1
consists of farmers who are growing vegetables conventionally that apply intensive
pesticides or other artificial inputs. The production is temporally beneficial but costly to
human health and the environment. Group 2 and Group 3 consists of individual
farmers, cooperatives or enterprises who are applying safety standards and new
technologies. These farmers have the ability and integrity to deliver good foods and
alleviate consumers’ food safety burden.
Secondly, based on the results of data analysis, the research established the scanning
criteria to identify farmers who are fixed to a farm-to-table supply chain. These
attributes are production method, quality control process, production capability and
supply chain coordination. Farmers expressed their interest in the farm-to-table supply
chain despite there are two contrary views on the feasibility of this solution. Some
farmers totally supported the farm-to-table solution to eliminate the need of
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intermediaries and shorten the supply chain to control products’ quality better. Some
doubted the feasibility of this project due to poor logistics conditions, post-harvesting
technologies and information systems.
Thirdly, this research explored the biggest challenge to farmers, which is market
access for quality products. Employing new practices and technologies in production
is expensive. Farmers are then worried about the incentives and rewards of quality
food because they cannot penetrate into high-end markets; or they have not found out
ways to enhance their value chain effectively. The findings indicated the urgent need
of re-connecting farmers and consumers and fostering value creation activities.
The quantitative study used a consumer survey to collect data of consumers

shopping behaviour and expectation in the fresh food category. The findings affirmed
the market demand for innovative solutions for food safety and a market niche for the
farm-to-table supply chain.
Firstly, this survey embraced consumers’ shopping behaviour by measuring key

performance indicators (KPIs) such as frequency, average value, preferred shopping
destination, and factors influencing on their decision-making process. These (KPIs)
reflected the shift in fresh food shopping in Vietnam. A significant proportion (38%) of
the surveyed sample shifted from daily market visit to once or twice market visit a week.
Consumers spent less time shopping but made higher average value purchases. This
research also affirmed that wet markets and supermarkets are the most common
places of fresh food acquisition, following by emerging channels. Due to low trust of
food safety at the traditional channel, traffic of customers is on the move from wet
markets to supermarkets, premium and organic stores.
Secondly, this research complemented the gap in previous literature relating to

consumers’ thoughts of sustainability in agriculture. By measuring consumers’
perspectives about good practices in agriculture, traceability and the farm-to-table
concept, this research discovered opportunities to create value addition, build
reputation and demand at a premium price. Farmers or food producers possibly create
their owned competitive advantages and new standards if they apply the food
sustainable development framework. This will help them address financial concerns
relating to rewards for their proper production.
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Thirdly, this survey contended that the farm-to-table supply chain has a possibility to
develop in Vietnam. Although, it is a new concept to most consumers, 80% of
consumers were interested in the solution. The supportive voice of consumers is vital
for the project to conduct further the product research and development. Additionally,
this survey shortlisted top three desired features of the farm-to-table supply chain are
traceability, convenience, and product certification. These features are necessary to
create trustworthiness and gain consumers’ confidence back.
Overall, this research applied two methods to address two objectives, the findings of
both processes were interrelated and connected when assessing the feasibility of the
farm-to-table supply chain. The investigation worked out that there is not only a
demand from the market but also basic capabilities to demonstrate the project’s
intention. Considering data findings and knowledge of previous literature, this research
concluded that the solution fits the food safety problem. It is possible to develop a farm-
to-table supply chain for fresh food in Vietnam.
Major implications for the farm-to-table project
The findings were explored by this research are fundamentals for the business case’s
recommendation. Based on the problem-solution fit of the farm-to-table supply chain,
the market-product fit was validated and developed. The business case’s design
consisted of the business model, the target market, the minimum viable product (MVP)
and the resource requirements.
Firstly, the data findings affirmed a serious lack of confidence and an extremely
significant level of scepticism in consumers regarding food safety. This report stressed
the food trust building and determined that food trust is the vision of the farm-to-table
project. Food trust was put at the centre of the business case’s strategy, operation and
value creation activities. Additionally, considering the voice of consumers and the
power established in their hands, this report argued that the subscription is a suitable
business model under the Vietnam context rather than a consumer-owned
cooperative. The subscription will give the farm-to-table supply chain the market power
to mitigate issue of food safety.
Secondly, implications from the quantitative analysis helped this project uncover the
customer segment, value propositions and sale channel. Narrowing down these
research findings, early-adopters of the MVP were described. They are female,
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married, have children, spend most of their time in offices, have an age range from
25 to 35- and are middle-income earners. They are willing to pay a premium on quality
food and are open to innovative solutions because of their families’ safety and health.
Moreover, the secondary data of industry reports relating to distribution and e-
commerce in Vietnam reinforced decisions on the sale channel. This report positions
the farm-to-table supply chain as a modern and digital channel to enjoy the growth of
these new shopping patterns in Vietnam. The main touchpoint of this project is a
farm-to-table platform which facilitates trade and connection between farmers and
consumers.
Thirdly, consumers’ decision-making process uncovered by this research resulted in

many applications in the business case. First and foremost, the report was fully aware
that safety and freshness are the primary needs of families when they purchase fresh
food. To achieve the vision of food trust building, the farm-to-table supply chain is not
only giving customers the ability to trace back to the origin of food but also assuring
quality, safety and freshness. Therefore, this project needs to work closely with
growers and producers in operation and supply chain management. A just-in-time
system, a cool supply chain and a fulfilment centre are vital on the journey of gaining
customers’ confidence back and addressing farmers’ concerns of logistics and post-
harvesting technologies. Other MVP’s features such as a digital platform, a one-stop
shopping service, doorstep delivery and meal preparation solutions are developed step
by step in correspondence with real interactions with early-adopters.
In the next stages of this project, with the role of a project founder and a business
developer, the researcher prioritises to form a project team consists of talents who are
adequate in quality control, information technology and digital marketing. This team
will work together and finalise all aspects of this project before calling for investment
and developing the minimum viable product.
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APPENDICES
APPENDIX 1. QUALITATIVE INTERVIEW
A. CURRENT FARMING PRACTICES
Question 1. Tell me about your current process of growing crop from materials
input to product selling?
Question 2. Are you a member of any cooperatives or associations? How do

the producer organisations assist your business?
Question 3. What is the quality standard or certification currently applied in

your production?
Question 4. How does your production method impact on your income as well
as environment and society?
Question 5. What are the top three challenges to you in serving consumers?
B. AWARENESS AND EXPECTATION
Question 6. What are critical concerns of consumers in purchasing vegetables

and fruits now?
Question 7. What do you think about sustainability growth in agriculture?
Question 8. I have a solution that connect farmer and consumer and promote
good agricultural practices, what does it means to you?
Question 9. What are your potential barriers to join the new business model?
Question 10. What would be an ideal solution for food safety as well as better
reward for good agricultural practices?
142
APPENDIX 2. QUANTITATIVE CONSUMER SURVEY
PROJECT: A FARM-TO-TABLE SUPPLY CHAIN TO ADDRESS FOOD SAFETY

FOR FRESH FOOD IN VIETNAM
A. FRESH FOOD SHOPPING BEHAVIOUR
Q1. How often do you and your family purchase fresh food for home
consumption?
o Every day
o Every 2 days
o Every 3 days
o Every 4 to 6 days
o Once a week
o More than a week
Q2. How much do you and your family usually spend on each fresh food
purchase?
o Less than 2.5 USD

o 2.5 – 5.0 USD
o 5.0 – 10 USD
o More than 10 USD
143
Q3. Where do you mainly buy or acquire fresh food? You can choose multiple
answers.
▢ Traditional market or street vendor
▢ Supermarket or convenience store
▢ Organic or safe-food store
▢ Online shopping (Website/ Facebook/ Zalo/ ...)
▢ Farm directly
▢ Relative or family self-supply
▢ Other channels
Q4. How much do you trust the safety of fresh food in the kind of outlets?
Completely Trust Neutral Distrust Completely

trust (5) (4) (3) (2) distrust (1)
Traditional market or street
vendor o o o o o
Supermarket or
convenience store o o o o o
Organic or safe-food store
o o o o o
Online shopping
(Website/Facebook/Zalo/...) o o o o o
Farm directly
o o o o o
Relative or family self-
supply o o o o o
144
Q5. How important is the below factors to your store selection for purchasing
fresh food?
Very Very
Important Neutral Unimportant
important unimportant
(4) (3) (2)
(5) (1)
Price
o o o o o
Refreshment
o o o o o
Safety
o o o o o
Various assortment
o o o o o
Convenient location
o o o o o
Promotion and
advertising o o o o o
Quality of service
o o o o o
145
B. FOOD SAFETY AND SUSTAINABILITY
Q6. Overall, how confident are you on the safety of fresh food that you
purchase or consume daily?
o Very confident
o Confident
o Neutral
o Not confident
o Not confident at all
Q7. What extend do you agree or disagree with the following sentence?
Completely Agree Neutral Disagree Completely

agree (5) (4) (3) (2) disagree (1)
I believe that good
agricultural practices (GAP)
or organic production play a
big role ensuring people are o o o o o
supplied healthy food.
I feel more confident to buy
fresh foods having
certification like GAP or
organic.
o o o o o
I really need to know where
fresh food I purchase come
from and how they are
produced
o o o o o
I think all information claims
about safety of food could be
mislabelled. o o o o o
I am willing to pay higher
prices if I trust the safety of
foods. o o o o o
If I have chances, I will buy
fresh food directly from
farmers, instead of markets
or retailers.
o o o o o
146
C. THE FARM-TO-TABLE SUPPLY CHAIN SOLUTION
Q8. Have you heard of farm-to-table concept before participating the survey?
o Yes, I know what it means clearly.

o Yes, I have heard of it, but I don’t know what it means.
o No, I have not heard of it yet.
Q9. How would you be interested to buy fresh food directly from farmers
through an online farm-to-table platform?
o Very interested
o Interested
o I will consider.
o Not interested
o Very not interested
Skip To: Q11 If How would you be interested to buy fresh food directly from farmers
through an online farm-to-tab... = Not interested
Skip To: Q11 If How would you be interested to buy fresh food directly from farmers
through an online farm-to-tab... = Very not interested
147
Q10. When purchasing fresh foods from farm-to-table platform, what feature is
important to you? You can choose multiple answers.
▢ Trace-ability
▢ Certifications (VietGap, Global Gap, Organic ...)
▢ Home or office delivery
▢ Chances for visiting and discovering farming life
▢ Great deals for bulk packages
▢ Others: ________________________________________________
Skip To: Q12 If Selected Choices >= 1
Q11. Would you please tell why you are not interested in fresh food online
shopping? You can choose multiple answers
▢ I need to check fresh food physically such as freshness, taste, smell

before purchasing
▢ I don’t trust on quality information claims online.
▢ I love interacting with people in shopping.
▢ Other reasons:
________________________________________________
148
D. ONLINE SHOPPING BEHAVIOUR
Q12. Have you ever been online shopping in past three months?
o Yes
o No
Skip To: End of Block If Have you ever been online shopping in past three
months? = No
Q13. What kind of products or services have you brought online in past three
months? You can choose multiple answers.
▢ Books, stationary, gifts
▢ Fashion and accessories (clothing, shoes, bags, underwear)
▢ Electronic devices and accessories (mobile, tablet, laptop, desktop,

camera, headphone, speaker, ...)
▢ TV and home appliances (TV, refrigerator, washing machine,

microwave, vacuum cleaner, ...)
▢ Health and beauty (makeup, skin care, hair care, beauty tools,
nutritional supplement, ...)
▢ Babies and toys (kid’s toys, milk powder, clothing, ...
▢ Groceries (dry and packaged foods, candy, chocolate, laundry, ...)
▢ Fresh food (vegetable, fruit, meat, fish, grain, ...)
▢ Sports an travels (trekking tools, backpacker tools, travel tours, ...)
▢ Others
149
Q14. What kind of payment methods have you made for online shopping? You
can choose multiple answers
▢ Online payment by credit, debit cards
▢ Bank online transfer or ATM
▢ Cash on delivery
E. DEMOGRAPHY
Q15. Are you:
o Male
o Female
Q16. What is your approximate age?
o Under 23
o 23 - 30
o 31 - 40
o Over 40
150
Q17. What is your main occupation?
o Students
o White-collars
o Blue-collars
o Self-employments
o Households
o Retired or not in workforce
Q18. Your income range per month is:
o Less than 200 US

o 200 - 500 USD
o 500 - 1000 USD
o More than 1000 USD
Q19. What is your highest education level?
o Lower than high school

o High school
o Associate degree
o Bachelor
o Postgraduates
151
Q20. Where are you living now?
o Ho Chi Minh City

o Ha Noi Capital
o Da Nang City
o Other provinces
END OF THE SURVEY. THANK YOU FOR YOUR PARTICIPATION!
152

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A FARM-TO-TABLE SUPPLY CHAIN

TO ADDRESS FOOD SAFETY FOR

TRUONG CONG BANG

Victoria University of Wellington

I highly appreciate my supervisor Doctor Bronwyn Howell giving me guidance and

1. PURPOSE ..................................................................................................... 1-2

2. OBJECTIVES ................................................................................................ 1-2

3. ASSUMPTIONS ............................................................................................ 1-3

4. SCOPE .......................................................................................................... 1-3

5. STAKEHOLDERS ......................................................................................... 1-4

6. THESIS STRUCTURE .................................................................................. 1-5

CHAPTER 2. INTRODUCTION .............................................................................. 2-6

1. FOOD SAFETY IN VIETNAM ........................................................................ 2-7

1.1. Social concerns....................................................................................... 2-7

1.2. Government controls............................................................................... 2-7

1.3. Economic impacts ................................................................................... 2-8

1.4. Media influence ..................................................................................... 2-10

1.5. Environmental footprints ....................................................................... 2-10

1.6. Technological trend............................................................................... 2-10

2. BUSINESS OPPORTUNITIES AND CHALLENGES .................................. 2-12

2.1. Opportunities ........................................................................................ 2-12

2.2. Challenges ............................................................................................ 2-13

3. GROUNDED THEORY................................................................................ 2-15

3.1. Supply chain management ................................................................... 2-15

3.3. Business model development ............................................................... 2-17

4. APPLICATIONS OF GROUNDED THEORY ............................................... 2-19

4.3. Unfulfilled gap of prior literature ............................................................ 2-22

CHAPTER 3. METHODOLOGY............................................................................ 3-24

1. RESEARCH DESIGN .................................................................................. 3-25

2. QUALITATIVE METHOD FOR OBJECTIVE ONE ...................................... 3-27

2.1. Qualitative data collection ..................................................................... 3-27

2.2. Interview questionnaire design ............................................................. 3-28

2.3. Participants’ background ....................................................................... 3-30

2.4. Qualitative data analysis ....................................................................... 3-31

3. QUANTITATIVE METHOD FOR OBJECTIVE TWO ................................... 3-35

3.1. Quantitative data collection ................................................................... 3-35

3.2. Consumer survey design ...................................................................... 3-36

3.3. Respondents background ..................................................................... 3-38

3.4. Quantitative data analysis ..................................................................... 3-40

4. ETHICS CONSIDERATION ........................................................................ 3-42

CHAPTER 4. FINDINGS AND ANALYSIS ........................................................... 4-44

1. QUALITATIVE FINDINGS ........................................................................... 4-45

1.1. Farmers’ current practices .................................................................... 4-45

1.2. Farmers’ awareness and expectation ................................................... 4-50

1.3. Unexpected findings ............................................................................. 4-54

2. QUANTITATIVE FINDINGS ........................................................................ 4-56

2.1. Consumers’ existing shopping behaviour ............................................. 4-56

2.3. Consumers’ expectation in a farm-to-table solution .............................. 4-65

2.4. Consumer’s online shopping behaviour ................................................ 4-67

3. OVERALL FINDINGS SUMMARY .............................................................. 4-68

3.1. Outcomes of food system exploration ................................................... 4-68

3.2. Outcomes of market and product validation .......................................... 4-70

CHAPTER 5. DISCUSSION .................................................................................. 5-72

1. REFLECTION ON ASSUMPTIONS ............................................................ 5-73

1.1. The assumption about supply ............................................................... 5-73

1.2. The assumption about market demands ............................................... 5-74

2. REFLECTION ON OPPORTUNITIES AND CHALLENGES........................ 5-76

2.1. Taking advantage of opportunities ........................................................ 5-76

2.2. Dealing with challenges ........................................................................ 5-77

3. REFLECTION ON THE PROJECT FEASIBILITY ....................................... 5-78