return icon Vietnamnet.vn

Local coffee brands diversify operations to boost exports

Vietnamese producers continue to have a faint imprint on the world’s deep-processed coffee market, and many small businesses are now beginning to pay more attention to branding, while larger ones seek new ways to increase export output.

Local coffee brands diversify operations to boost exports

Intimex JSC, Vietnam’s largest supplier of Robusta coffee beans, took an unexpected turn when it decided to focus on instant coffee production with a separate factory in the southern province of Binh Duong.

Intimex’s change of course has been the starting pistol for a new race in the Vietnamese coffee industry. Instead of focusing on exporting coffee beans, local businesses have now started looking for ways to increase profits by processing coffee and building a brand for it.

In the context of the pandemic, the demand for processed coffee in Vietnam’s export markets such as the EU is also increasing, which has given the industry the opportunity to broaden its footprint abroad with its abundant supplies of Robusta coffee. The coffee type is the main raw material for instant coffee and, together with Arabica, can be grown easily on Vietnam’s coffee plantations.

As the world’s second-largest coffee exporter with an output of up to 1.7 million tonnes in 2020, coffee beans have been Vietnam’s main export product for many years. Experts say that to improve the quality along the value chain and render export sustainable, coffee enterprises are required to invest in deep processing technology to produce high-quality coffee with high commercial value, instead of exporting raw products.

In mid-May, Luong Van Tu, then-chairman of the Vietnam Coffee-Cocoa Association, said that the association is now calling on businesses to invest in roasting and instant coffee technology. In the next decade, the investment in such technology will help increase the proportion of processed coffee exports to 20 per cent.

Processed coffee accounts for an increasingly high proportion of Vietnam’s total coffee exports, from 14.4 per cent in the first quarter of 2020 to 17.13 per cent for Q1/2021, according to the General Department of Vietnam Customs.

Race for dominance

Like the fierce competition between coffee and beverage brands in expanding the number of stores, the Vietnamese coffee industry is seeing brands racing to expand instant coffee production.

The strongest participation within the segment comes from the biggest names such as Vinacafé, Trung Nguyen Legend, Nestlé, and new players such as NutiFood and Intimex.

As one of the first enterprises to produce instant coffee in Vietnam, Vinacafé currently holds 40 per cent of the domestic market share, and it is also a pioneer in bringing locally-made instant coffee products abroad. Its branded products are now available in China, the United States, Canada, and more.

In 2020, Vinacafé’s instant coffee export output reached more than 2,200 tonnes with a value of more than $8 million. Although the pandemic affected coffee exports, a representative of Masan Consumer, the owner of Vinacafé, said that they will expand the presence of the brand to new export markets in addition to maintaining key markets.

Despite joining the instant coffee race later, Trung Nguyen Legend with its G7 coffee achieves impressive results as the product is present in more than 80 countries and territories. In some markets, such as South Korea, G7 ranked in the top 5 most popular and purchased online coffee brands in 2020. It is also the most popular Asian instant coffee brand, with the second-largest market share in the Chinese online coffee market.

Another name that does not come from Vietnam but has made important contributions to bringing Vietnamese coffee to the world is Nestlé.

As the group is supplying nearly one-third of the Asia-Pacific’s instant coffee market, each year Nestlé buys 20-25 per cent of Vietnam’s coffee output for deep processing and export under its Nescafé brand.

Nestlé Vietnam managing director Binu Jacob said that all Nescafé products are fully made from Vietnamese Robusta beans and are exported to 25 markets worldwide.

The instant coffee export market has also been attractive to previously unknown players in the field, such as NutiFood, Vinamilk, and the leading green coffee bean exporter Intimex.

In 2019, NutiFood made the first steps on its journey to bring instant coffee to the world by teaming up with legendary golfer Greg Norman to open a coffee chain called Greg Norman NutiCafe in the US and several Asian countries.

Smaller player’s niche market

Contrary to the bustle of the instant coffee processing industry, the export market for roasted coffee is a favourite playground for smaller manufacturers looking to conquer the niche market with a line of specialty coffee products, such as Phuc Sinh, The Coffee House, The Married Beans, and Shin Coffee.

Leading this game is Phuc Sinh – a 20-year-old enterprise operating in the export of deep-processed coffee with 70-80 per cent processed coffee export. According to Phan Minh Thong, general director of Phuc Sinh Corporation, the company’s average annual revenue from roasted coffee exports is about $360 million.

Smaller producers like The Married Beans and The Coffee House also want to find opportunities to export their roasted and ground coffee products by focusing on exploiting niche markets. Moreover, these chains are increasing their prestige and popularity by developing retail store chains in the domestic market, thus silently adding strength to their brand by supporting coffee farmers in sustainable development and creating high-quality speciality coffee products for the international market.

Duy Ho, CEO of The Married Beans, said that although serving a niche market with a share of only about 2-3 per cent, his company’s Arabica products from Dalat are considered luxury by fastidious customers looking for exquisite taste. Each year, it exports 150-200 tonnes of coffee to Japan, the EU, South Korea, and the US with revenues of about $1.6 million. Although the company’s roasted and ground coffee products account for only 30 per cent of the total export volume, they bring about $1 million of that revenue.

“As soon as the pandemic is under control, The Married Beans will actively participate in international coffee exhibitions and fairs to seek more export opportunities, including cooperating in processing and coffee shops with other brands and the introduction of The Married Beans’ roasted products to e-commerce in the Middle East,” Ho shared.

Source: VIR

Coffee trade prospect 2021

Coffee trade prospect 2021

Many financial analysts expect a recovery in the agro-market in 2021, including the coffee sector.

MORE NEWS

Authorities warn transport companies on fare prices

Fuel prices have fallen back to the pre-January level, but many transport firms still refuse to adjust their fares, according to authorities.

Hanoi handles over 700 long-stalled projects

Hanoi City has reviewed and handled over 700 long-delayed projects covering a total area of more than 5,000 hectares to speed up the investment in and completion of the projects and avoid a waste of land.

Vietnam to develop game industry: official

The Ministry of Information and Communications (MIC) is developing a strategy with specific goals and norms to develop the game industry, said Le Quang Tu Do, deputy director of the Authority of Broadcasting, Television and Electronic Information.

Five Vietnamese skaters to compete at int'l figure skating competition

Five Vietnamese skaters will compete at the 2022 International Skating Union (ISU) Junior Grand Prix of Figure Skating which will take place in the Czech Republic from August 31- September 3, and in Italy from October 12-15.

Vietnam stays ready for trade talks with US to address arising problems

Vietnam is willing to hold trade talks with the United States to timely solve arising problems and strengthen bilateral economic, trade and investment relations, in the interest of businesses and people of the two countries.

First-ever Namaste Vietnam Festival to take place in HCM City

Ho Chi Minh City is set to host the first-ever “Namaste Vietnam Festival" from August 12 to September 12 to mark 75 years of Indian Independence and 50 years of Vietnam – India diplomacy this year.

Vietnam, UN sign strategic framework for sustainable development cooperation

A Strategic Framework for Sustainable Development Cooperation (CF) between the Government of Vietnam and all UN resident and non-resident agencies in Vietnam for the 2022-2026 period was signed in Hanoi on August 11.

Vietnam promotes relations with both US and China, FM spokesperson

Vietnam wants to promote relations with both the United States and China, and expects both sides will exercise restraint for global peace, Foreign Ministry spokesperson Le Thi Thu Hang said at a regular press briefing on August 11.

Vietnam – new stop for semiconductor producers

Samsung Electronics’ plan to manufacture semiconductor products in Vietnam has sparked the hope that the Southeast Asian nation will be a new stop for the semiconductor industry.

Blockchain projects preferring long-term partnerships

With the blockchain market showing signs of recovery and the amount of capital increasing sharply in recent weeks globally, investors are now more confident in seeking out stronger connections to move forward.

Tourism Minister proposes extending for implementation of preferential policies

The Minister of Culture, Sports and Tourism suggested extending the implementation of support policies until 2023 to help tourism businesses overcome difficulties caused by the pandemic as travel businesses are still facing difficulties.

Quang Ninh to develop big-ticket tourism project

The government of Quang Ninh Province is set to develop a luxury tourism project at a total cost of over VND24.8 trillion, or US$1 billion, in Van Don District.

Vu Lan Festival: A cultural activity with Buddhist philosophy in Vietnam

The festival is an opportunity to remember the merits of parents and ancestors.

Minister of Public Security supports legal betting to fight illicit online gambling

Minister of Public Security To Lam says that the government’s decree on betting is expected to help reduce illegal online betting.

VIETNAM NEWS HEADLINES AUGUST 11

NA Standing Committee adopts resolutions on establishment of administrative units
back_to_top