traditional and modern food systems

Development Policy Review, 2006, 24 (1): 31-49

Traditional vs. Modern Food Systems?
Insights from Vegetable Supply Chains to
Ho Chi Minh City (Vietnam)
Jean-Joseph Cadilhon, Paule Moustier, Nigel D. Poole, Phan
Thi Giac Tam and Andrew P. Fearne∗
This article describes the development of vegetable marketing in Ho Chi
Minh City (Vietnam), where modern distribution outlets are competing fiercely with traditional traders for wholesale and retail customers. Data from interviews with supply chain stakeholders and a survey of vegetable wholesalers have been used to compare the performance of modern and traditional chains, and the findings reveal the chains as segmented in their product focus, the modern sector focusing exclusively on quality. Modern marketing channels are generally more efficient than traditional ones but still account for only around 2% of vegetable distribution. The article argues that policy-makers should not promote the ‘modernisation’ of food systems at the expense of traditional channels which meet important consumer needs.

1

Introduction

Recent research has shown the significance of the rise of supermarkets and modern distribution businesses in the food marketing systems of developing countries (Deloitte
Touche Tohmatsu, 2005; Reardon et al., 2003). The same trend has also been documented more specifically in South-East Asia: modern distribution outlets like department stores, supermarkets and hypermarkets are appearing in the region, taking food market shares from traditional retailers. Local situations vary across the region: in
Taiwan, over 60% of food sales were transacted by the modern retail sector in 2000; in
Malaysia, modern retailers accounted for only 20% of food sales across the country; in the cities of Thailand, the modern sector’s market share of food sales increased from
25% to 50% in just five years (Department of Foreign Affairs and Trade, 2002).
However, in all countries in the region, sales

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