Coffee Industry Analysis in Vietnam strives to improve Coffee quality

Coffee is to vietnam what tea is to the chinese. It penetrates deep into the bone marrow. Robusta beans, which are often used to make instant coffee and premium coffee blends around the world, are almost all exported from Vietnam.

Vietnam has a long history of coffee production, but the development and expansion of its production scale began in the last 20 years. After experiencing the ups and downs of the world coffee market from 2001 to 2005, Vietnam's coffee industry still handed in a satisfactory answer in 2006: coffee production reached 810,000 tons and export value reached 1.1 billion US dollars.

Robusta Coffee Becomes the Meeting Point of Vietnam-Indonesia Cooperation

Vietnam is a major producer of Robusta coffee beans. However, in recent years, Vietnam's conversion of low-yield land for coffee cultivation to other perennial cash crops such as rubber, pepper, fruit trees and annual crops such as cotton and hybrid corn has seriously affected the production of Robusta coffee. Coupled with the abnormal wet weather in 2006, Vietnam's coffee production dropped sharply. In addition, a large number of "Robusta" coffee stocks in Italy are also mildewed due to excessive humidity in the warehouse. These adverse factors have had an impact on Vietnam's Robusta coffee production and export volume, and the decline in export volume has also led to a rise in world Robusta coffee prices.

In order to maximize the interests of coffee farmers, Vietnam actively cooperates with Indonesia, a major coffee producer, in the coffee field. In November 2006, Vietnam and Indonesia signed a memorandum of understanding on cooperation in coffee farming.

Under the cooperation plan, Vietnam and Indonesia will adjust coffee exports and improve coffee quality to avoid oversupply in the global market. The aim of the partnership is to raise the price of coffee to US$1 per litre to increase the profits of coffee farmers in Vietnam and Indonesia. Vietnam and Indonesia are currently the world's largest exporters of Robusta coffee, accounting for about 50% of the world's Robusta coffee production. The cooperation between Vietnam and Indonesia has played a positive role in improving the quality of Robusta coffee in both countries and jointly exploring the international market.

CAEXPO as a bridge to enter the Chinese market

Vietnam coffee since October 2004 debut in the first China-ASEAN Expo, Pingxiang in Guangxi and other places appeared strong sales aftereffect. Vietnamese coffee quickly entered the Chinese coffee market.

In fact, as early as the 1990s, Vietnamese coffee infiltrated the Chinese market in the form of border trade. However, for more than 10 years, Vietnamese coffee sales in the border trade market have always been slow. The reason for this is believed to be lack of publicity. In fact, Vietnamese coffee quality is not bad, compared with some domestic brands of coffee, there are advantages of high quality and low price. However, in terms of publicity and sales, it has always been at a disadvantage. Many people do not even know that Vietnam has coffee. Therefore, Vietnamese coffee sellers have made great efforts to promote and build brands with the help of China-ASEAN Expo, and the sales market of Vietnamese coffee in China is constantly expanding.

Trung Nguyen Coffee Co. LTD., known as Vietnam's largest coffee chain with 420 coffee outlets in Vietnam, opened China's No.1 store in Nanning in 2006. In order to integrate into the Chinese market, Zhongyuan Coffee invested a lot of money and conducted market research for 2 years. It can also be seen from this move that the company will use Nanning, China as a strategic stronghold to expand sales channels. In order to open up the Chinese coffee market, Vietnam has been actively exploring new ways of cooperation and development.

Improving Coffee Quality

Vietnam has been producing coffee since the 20th century, but the development and expansion of its production scale has only begun in the last 25 years. During these 25 years, Vietnam's coffee production has greatly increased in both area and production capacity. Vietnam increased its coffee production nearly 100-fold, becoming the second largest coffee producer in the world after Brazil, mainly exporting unprocessed coffee products. Vietnam exports coffee to more than 60 countries worldwide, with Germany and the United States being the largest importers.

However, due to the tariff policy of each country to protect the development of domestic coffee industry, Vietnam's coffee products have no obvious advantage in the international market. In addition, Vietnam's coffee processing level has not yet reached the level of world famous brands, so Vietnam's processed coffee products such as instant coffee are difficult to penetrate the global market. In addition, Vietnam's domestic coffee production is mainly roasted coffee mixed with other comprehensive spices to create a new taste of coffee. Although this coffee can satisfy the taste of Vietnamese domestic consumers, it cannot win the favor of foreign customers.

In order to change the above situation, further open up the international market and make Vietnamese processed coffee more popular in the world market, Vietnamese coffee producers have formulated relevant strategies according to market changes, such as improving coffee quality, producing products with high added value, producing high-quality coffee such as organic coffee, specialty coffee, etc. Improve processing technology and equipment, adopt Vietnamese national product quality standards in line with international standards, improve product quality according to market requirements, etc., gradually realize Vietnam's dream of being a big coffee exporter.