When viewing Vietnam’s spice industry from a high-level perspective, the picture appears highly ‘paradoxical.’ Vietnam ranks among the world’s top three suppliers and processors of pepper, cinnamon, star anise, ginger, chili, and turmeric, with annual export turnover of approximately USD 1.3–1.4 billion. In certain leading enterprises, processing technology has already approached U.S., EU, and Japanese standards. Yet at the business-model level, most of the value still lies elsewhere—with international buyers, downstream processors, and seasoning and flavor houses outside Vietnam. We produce a great deal and invest heavily in machinery, but what we capture remains largely raw-material pricing.
To design a new business model for Vietnamese spice startups, the first step is not selecting technology, but shifting mindset—from ‘contract processing of raw materials’ to ‘designing value chains and flavor solutions.’ This may sound ambitious, but in practice it becomes very concrete when we start from what Vietnam already has.
From Drying–Grinding Plants to “Flavor & Traceability Platforms”
Today, leading players in Vietnam’s spice industry have already made substantial investments: washing and impurity removal, closed-chamber drying, fine grinding at 60–80 mesh, steam sterilization, and management systems compliant with ISO 22000, HACCP, and even BRC and FDA standards. In some cinnamon, star anise, and ginger regions, clusters of essential oil plants and distillation facilities have also emerged. In other words, “hard technology” — machinery and processing lines — is no longer the only bottleneck.
The real bottleneck lies in the fact that most products still stop at the level of pre-processing or even deep processing… but for someone else. Essential oils, standardized powders, and semi-finished inputs are sold wholesale to foreign flavor houses, which then create seasonings, soup bases, and standardized extracts under their own brands. The value chain ends at the factory gate. We continue to sell by the ton, by moisture content, and by microbiological specs—while others sell by aroma, by application, by story, and by solutions for F&B, FMCG, and pharmaceutical industries.
The business model that a Vietnamese spice startup can—and should—aim for is not simply another drying–grinding plant similar to existing ones. Instead, it should position itself as a “value-chain designer” and “formula owner,” connecting raw material areas, existing factories, traceability systems, flavor R&D, and end buyers. At that point, spices are no longer just products—they become a service, a platform.
A Suggested Model: “Vietnam Flavor Lab + Transparent Supply Chain”
If we were to outline a possible framework, imagine a startup beginning with one or two spice groups where Vietnam has clear advantages—such as ginger and cinnamon/star anise, or pepper and chili. The starting point is not building a large factory immediately, but instead:
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Establishing a strong foothold in raw material areas and partnering with one or two factories that already meet solid technological standards.
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Building a small Flavor Lab—an R&D space capable of standardizing powders, essential oils, and oleoresins, experimenting with seasoning blends, and testing real product applications.
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Layering on a digital system to manage farms, batches, and traceability—deep enough that buyers can trace a shipment back to its growing area, cultivation practices, and processing methods.
For farmers and raw material zones, this model does not promise unrealistic outcomes. It begins with standardizing a few key parameters: varieties, harvest timing, primary drying methods, and storage conditions. The startup’s role is to design a simple but effective criteria set linked directly to purchase prices and premium potential. Over time, this becomes a “soft asset” that is extremely difficult for pure traders to replicate.
For factories, the startup does not need—and should not—duplicate existing capacities. Instead, it leverages idle or available capacity: commissioning clean drying, cold grinding, sterilization, or even essential oil distillation from certified facilities. The differentiation lies in owning the blending formulas, quality standards, and traceability systems. As seen in models like Growcoms, the real asset is not the factory, but the network of factories + standards + management platform.
On the market side, the startup does not sell “12% moisture cinnamon powder” like everyone else. It sells “flavor solutions” to defined customer segments.
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For a tea company, this might be a standardized cinnamon–ginger–licorice blend with defined aroma, pungency, solubility, technical documentation, and a clear origin story.
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For a domestic beverage chain, it could be syrups or premixes based on Vietnamese cinnamon, ginger, and passion fruit—along with recipe guidance, staff training, and sustainability commitments.
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For international buyers, it might be standardized oleoresins and powders from Vietnamese cinnamon, star anise, or ginger, accompanied by QR-based traceability and testing dossiers compliant with U.S. and EU standards.
Crucially, revenue does not come solely from raw material margins, but from formula development fees, batch standardization services, traceability systems, co-branding, and even product development consulting.
A Mindset Shift: From “Selling What We Have” to “Designing What Others Need”
The fundamental difference between a traditional spice grinding facility and a next-generation spice startup is one of mindset. Traditional operators start with the question: “What do I have to sell?” They look at pepper fields, cinnamon hills, ginger farms, then dry, grind, package, and quote prices—accepting whatever the market responds with.
Spice startups must begin with the opposite question: “What problem is the customer trying to solve with spices?”
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An instant noodle brand wants to reduce synthetic additives while maintaining consistent flavor.
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A coffee chain wants to launch herbal beverages but lacks extraction and residue-control capabilities.
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A premium FMCG brand wants to tell a story tied to Vietnamese cinnamon or star anise but lacks the time to build farms and conduct social audits.
Once the mindset shifts to problem design, the business model unlocks. We are no longer selling pepper, cinnamon, or ginger—we are selling a Vietnamese spice ecosystem composed of modules: standardized raw materials, application formulas, traceability and sustainability documentation, and communication narratives. Each module can be priced separately, creating layered margins instead of relying solely on agricultural price spreads.
Deep Processing Is Not Just More Machines, but More “Intelligence”
If deep processing is viewed merely as adding oleoresin extraction units, freeze-drying lines, or cold grinding systems, startups will not go far beyond what large enterprises already do. A spice startup that wants to survive alongside them must see deep processing as adding an “intelligence layer” to existing technological assets.
This intelligence includes deep understanding of active compounds and sensory perception (gingerols, piperine, cinnamaldehyde—but more importantly, how spicy is “pleasant” to users), the ability to design formulas for different segments, and the ability to tell product stories in the market’s language. Here, a startup’s advantage lies not in capital, but in learning speed, experimentation speed, and flexibility in partnering with existing factories.
A viable path is to start as a “Vietnamese Flavor Studio”—small, agile, focused on a few highly specific B2B product lines, while steadily building data on flavor profiles, applications, and market response. Only after securing sufficient data and contracts should the startup invest in its own strategic processing lines, such as cold grinding and blending for flagship seasonings or oleoresin extraction for pharma and nutraceutical clients.
The Opportunity Over the Next 5–10 Years
Industry reports consistently highlight that Vietnam’s spice exports remain largely commodity-based, with low proportions of deep-processed, high-value products—despite rapidly rising international demands for traceability, sustainability, reduced additives, and natural ingredients.
This is the window of opportunity for a new generation of spice startups: entering a sector where the hardware (factories, farms, equipment) already exists, but the software (business models, digital platforms, value-added services) is still missing. If we continue to see ourselves merely as spice companies, we risk repeating the cycle of higher volumes, lower prices, and market vulnerability. If we dare to see ourselves as flavor-solution companies capable of designing value chains, we gain the chance to reshape the market.
The most promising business model for Vietnamese spice startups does not lie in a perfect Business Model Canvas diagram, but in a simple decision: to move from raw-material thinking to solution design; to focus deeply on a few spices and customer segments; and to gradually build a Vietnamese flavor ecosystem that is standardized, traceable, and well told.
The rest—technology, factories, standards—the industry already has. What we lack are those willing to connect, organize, and turn everything into a coherent commercial logic. That is where startups belong. And perhaps, if Vietnam does not do this for Vietnamese spices, another Growcoms or Trianon—under a different name—will come and do it for us.
About GEVA
The “Green Export Incubation and Acceleration through Voluntary Sustainability Standards (VSS)” Program is funded by the Swiss Government and jointly managed by the International Trade Centre (ITC) and the Vietnam Trade Promotion Agency (VIETRADE), Ministry of Industry and Trade. The program is implemented by KisStartup JSC from April 2025 to April 2026.
The project aims to enhance Vietnamese businesses’ green export capacity (through the adoption of VSS) via training, consulting, incubation and acceleration, and international market linkages to meet increasingly stringent global market requirements.
For further information, please contact:
Fanpage: GreenExport Vietnam
Website: https://greenexport.vn/vi
Email: hello@kisstartup.com
Phone: (+84) 039 216 1403 (Mr. Hieu)