Circular economy: an opportunity to raise value and enhance the competitiveness of Vietnam’s shrimp industry

In 2025, Vietnam produced approximately 1.29 million tonnes of shrimp, with exports reaching a record-high $4.6 billion and products shipped to more than 100 markets. Vietnam is among the world’s four largest shrimp producers and ranks third in shrimp export value, after Ecuador and India. A notable strength of Vietnam’s shrimp industry is its advanced processing capacity, ability to fulfill complex orders, and diverse product portfolio, ranging from peeled, cooked, breaded and seasoned shrimp to nobashi, sushi, ready-to-cook and ready-to-eat products. However, larger production volumes do not necessarily translate into proportionately higher export value. During 2021-2025 period, shrimp output increased by nearly 40%, yet export revenue experienced significant volatility: dropping from over $4.3 billion in 2022 to roughly $3.4 billion in 2023, before rebounding to $4.6 billion in 2025. This indicates that higher output needs to be accompanied by more stable production, greater cost competitiveness and stronger value creation per kilogram of shrimp. Competition extends beyond raw shrimp In the first eight months of 2026, Vietnam’s shrimp exports reached approximately $3.3 billion, a 12% year-on-year increase. However, growth diverged significantly across major markets. Exports to China and Hong Kong surpassed $1.1 billion - surging nearly 36% and accounting for over a third of total export turnover. Conversely, the U.S market declined by nearly 12% and the EU by 3.6%, while Japan grew by over 6% and South Korea remained largely flat.  On the supply side, the competitive landscape is also shifting. Discussions at the Global Shrimp Forum 2026 showed that Ecuador is not only continuing to expand production but also investing more heavily in peeling, processing and value-added products. The share of whole, head-on shrimp in Ecuador’s exports fell from around 74% in 2019 to 44%, indicating that the country is moving closer to processed segments that have traditionally been a strength of Vietnam’s shrimp industry. Domestically, the shrimp supply chain continues to face significant bottlenecks: fragmented production, inconsistent raw material supply, high production costs, expanding market access requirements and the underutilization of by-products, which have yet to be fully standardized into a high-value material stream. These challenges are interconnected: farming risks raise costs, fluctuations in raw material supplies disrupt processing plans, while uncertain economic returns make farmers and businesses more cautious about investing further in technology, certification and data. No one-size-fits-all circular odel for the Mekong Delta  A notable takeaway from the Forum's discussions is that the Mekong Delta can pursue two circular pathways simultaneously. For shrimp–rice, shrimp–mangrove, improved extensive farming and other ecological models, production relies more heavily on natural ecosystems, biodiversity and the ability to utilize material flows between production cycles. Conversely, in intensive, super-intensive and high-tech farming, the focus is on managing feed, water, sludge, energy, alongside biosecurity, sensor technology,  automated feeding and water recycling. Some multi-stage, biofloc and recirculating systems have been reported to reduce wastewater volumes by 30-70%. This distinction is crucial: the circular economy should not be deployed as a universal formula across all farming areas. Solutions need to be tailored to the production model, farm scale, infrastructure conditions and target market. Markets need suitable products, not just a “circular shrimp” concept An important point is that international buyers are not necessarily looking for a separate product category called “circular shrimp.” Their primary concern is whether the product meets consumer demands and whether suppliers can substantiate the attributes valued by the market.  In the EU, particularly Northern and Western Europe, demand is increasingly shifting toward peeled, cooked, seasoned and breaded shrimp, as well as ready-to-cook and ready-to-eat products. This product group aligns well with Vietnam's processing capabilities. Concurrently, buyers are paying greater attention to certification, traceability, antibiotic controls, social responsibility and environmental impact data across the supply chain. Consumer trends such as clean labels, high-protein content, convenience, transparency and smaller packaging are also influencing product development. In Japan, quality, precise specifications, appearance, color, food safety and reliable delivery remain fundamental requirements. The market is highly suitable for large black tiger shrimp, nobashi, sushi, cooked and processed products with stringent specifications. Sustainability and circularity data can bolster confidence in sourcing and production practices, but cannot substitute core requirements for quality and consistency.  In the US, opportunities remain strong for peeled, cooked, breaded, ready-to-cook and ready-to-eat shrimp. However, food safety and regulatory compliance must take precedence over sustainability-related differentiators. Claims such as “sustainable” or “responsibly sourced” also need to be supported by relevant documentation, data and evidence. Meanwhile, China and Hong Kong have a distinctly different demand structure, with strengths in live and fresh shrimp, large-size shrimp, lobster, black tiger shrimp and restaurant and premium segments. In these markets, the value of circularity can be translated into more readily recognizable attributes, such as safety, clear origin, traceability, consistent quality and the reputation of the production region. The “second raw material stream” unlocks additional value for the supply chain  One of the clearest areas of untapped potential lies in shrimp heads and shells. If systematically collected and further processed, these by-products could contribute an additional 10-15% to the total value of the shrimp value chain through products such as chitin, chitosan, glucosamine, hydrolyzed protein, animal feed and biofertilizers. A company in Ca Mau is currently collecting and processing tens of thousands of tonnes of shrimp by-products annually to produce raw materials for food, animal feed, healthcare and other industries. This demonstrates that by-products are not merely a matter of reducing disposal costs, but can become a B2B raw material stream with its own market. However, major challenges remain in collecting, preserving and standardizing raw materials from thousands of dispersed processing facilities. Unless logistics and input standards are resolved, translating the high-value potential of shrimp by-products will be difficult to translate into a stable commercial scale. From individual models to a market-driven value chain Discussions at the Forum indicate that the shrimp industry does not lack technologies or individual initiatives. The larger gap lies in connecting these solutions into a value chain with established markets, reliable data and mechanisms for sharing benefits. Rather than developing a model first and looking for a market afterward, the value chain should start with buyer demand: identifying the required products and specifications, then organizing farming areas, designing the supply chain, selecting appropriate technologies and determining suitable investment strategies. Farmers need to see tangible benefits; businesses need stable raw material supplies and market outlets; buyers need products that meet their requirements and financial institutions need commercially viable models to participate. This also shows that there is no single “circular shrimp product” for all markets. The value of circularity can only be translated into a competitive advantage when it is aligned with the right product, requirements and customer segment. “Circularity” does not automatically mean that the market will pay a premium. Products must first be tasty, convenient, safe, aligned with consumer needs and competitively priced. Environmental and social responsibility attributes create additional value only when backed by credible evidence and linked to tangible improvements across the value chain. That value can come from multiple sources: lower costs, reduced risks, higher farming success rates, more stable supplies, stronger customer retention, access to new markets, more reliable data and new revenue streams from by-products. This is also the key to ensuring that the circular economy does not remain merely an environmental requirement, but gradually becomes a tool for improving production efficiency, increasing value and strengthening the competitiveness of Vietnam’s shrimp value chain.