Last update 5/2/2012 8:00:00 AM (GMT+7)

It’s not easy to squeeze into Vietnamese coffee market (part 3)

VietNamNet Bridge – Trying every means to attract more customers, making heavy investments to develop brands--businessmen have admitted that it’s very difficult to attain the market.
The biggest affairs relating to coffee brands in 2011 (part 1)

The war for coffee market share staged (part 2)  

Anil Bhuwania, South East Asia and East Asia Director of MacCoffee, has affirmed that since 2011, after three years of surveying the Vietnamese taste and the market, MacCoffee has changed the coffee processing formula to make fit to Vietnamese taste, and decided to use domestic coffee sources to cut down expenses and improve the competitiveness of MacCoffee products.

In 2012 and the next years, MacCoffee would gather strength on establishing a distribution network, building up a new brand recognition system, changing the packing to generate big renovations, according to the senior executive.

The motto that MacCoffee follows is to make research and development to maintain the best stable quality of products in accordance with international standards.

The executive said MacCoffee keeps optimistic about its business development in Vietnam as it can see the number of people drinking coffee has been increasing rapidly. MacCoffee, which still has not a big market share and has not made big investment for branding, still could see the sales rising steadily by 20 percent a year.

McCoffee is making its efforts to build up a strong brand by acting as the main sponsor for the “Sieu dau bep Vietnam” (Vietnamese super chefs) TV program, expected to be broadcasted from May 2012.

Statistics show that every Vietnamese consumes 40 glasses of coffee a year, a low level if compared with the world. Therefore, the coffee market, both roasting and soluble, is still believed to have great potentials for investors.

A lot of new coffee brands have joined the market in recent years with the ambition of obtaining just “small pieces of the cake” of the coffee market, namely Me Trang, Thu Ha, Phuc Long, Legend Revived, Gogo Coffee.

The brand owners have been trying to follow their specific ways to penetrate the market, offering specific products. However, they all have admitted that this is a very tough playing field.

Lam Tuan Huy, Deputy Director of Phuc Long Tea and Coffee Company, said that though the company’s products have been favored in the world market with the exports rising steadily year after year, Phuc Long still is not a well-known brand in the domestic market.

“We kicked off the plan to develop the domestic market many years ago. However, to date, we still have not been able to squeeze into the market,” Huy said.

The problem is that Phuc Long’s coffee is pure and clean, with no additives; therefore, they do not fit the taste of Vietnamese people who like strong coffee. As such, Phuc Long still has been focusing on making coffee for export. Besides, it is also building up a chain of cafes like the model of Highlands Coffee or Coffee Bean to popularize its image.

To date, Phuc Long has developed four cafes, but they mainly serve foreigners. However, difficulties have arisen when, in the café market segment, a lot of well- known foreign names have appeared in HCM City, including The Coffee Bean & Tea Leaf, Gloria Jeans Coffees, Illy's...

Meanwhile, sources have said that the giant Starbucks is also intensively preparing to land in Vietnam from 2013.

Thu Ha coffee brand has also obtained satisfactory initial achievements in HCM City market.

However, Ngo Nguyen Anh Tuan, Director of the HCM City Branch of Thu Ha Coffee Company, has admitted that the company is facing big difficulties. The company needs to invest more on marketing and sale, and it needs to borrow capital from banks. Meanwhile, the lending interest rates are still sky high at 18-19 percent per annum.

Doanh Nhan Saigon