The instant coffee market is heating up

In late August, Nutifood joined the coffee market by launching Nuticafe iced milk coffee. One month before, Vinamit, known as a dried fruit producer, also jumped into the market by introducing Espresso Coffee, a dried fresh coffee. 

Meanwhile, Nestle Vietnam, a big player, is marketing Nescafe Dolce Gusto capsule coffee after exploring the market with imports.

A senior executive of Nutifood commented that the competition is cutthroat, with many domestic and foreign brands.

Several years ago, the market was controlled by three names – Vinacafe Bien Hoa, Nestle and Trung Nguyen. Now, there are many new names such as TNI (King Coffee), Ajinomoto (Birdy), Phindeli and others, though they hold a small market share.

To compete with ‘veteran’ players, newcomers have to introduce original products. Nuticafe, for example, is produced by extracting and concentrating coffee at the temperature below 0oC which allows to maintain the freshness and natural aroma of roasted coffee. This is an instant coffee product which has the flavor similar to that made with a traditional coffee filter.

Vinamit’s coffee product is processed from fresh coffee, blended and frozen to powder, with the color and flavor kept intact. Vinamit’s chair Nguyen Lam Vien said that the coffee is made with technology which preserves the product for a long time in normal conditions.

In 2017 alone, Nutifood spent VND1 trillion on projects developing high-quality coffee growing area in Dak Lak province, especially Phuoc An Farm. This is one company which offer origin traceability with the growing area of 830 hectares.

According to the Vietnam Coffee & Cocoa Association, the instant coffee market grows by 8-10 percent per annum. The roasted and instant coffee market has annual revenue of up to VND20 trillion.

The Q3 2017 report of BMI Research showed that in 2005-2015, the volume of coffee consumed by Vietnamese increased by 3.5 times, from 0.43 kilograms per head to 1.38 kilograms, and the figure is expected to rise to 2.6 kilograms by 2021.

Analysts commented that though the domestic market is crowded, there are still opportunities for brands which can introduce new original products.

Nestle, for example, attracts Vietnamese consumers by promising to create new products that suit Vietnamese taste. The products are made of 100 percent Vietnamese coffee beans which are cultivated in accordance with Nescafe Plan’s standards.

Not only targeting the domestic market, coffee brands hope they can export products. Vien of VInamit said the company has exported two tons of dried fresh coffee to the US market.

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