Vietnamese surge for economic development through export led growth in coffee: Ken Research

Coffee is a major source of extravagant caffeine addiction, all around the globe. Its resounding aroma, bitter taste and enigmatic appeal drive generations to the lushes of Vietnamese green coffee fields. Coffee production could be counted as one of the initial commercially viable production unit of this once known French colony. However, the output volume of coffee was small in Vietnam before 1975. The French did the wonderful task of introducing coffee in this country because of the optimal climatic conditions that foster rich coffee cultivation. Like in most colonial jurisdictions, coffee came up as a product of plantation system long back in 1857. Having faced major setback during the Vietnamese war, the industry took off like a bullet soon as its economy broke the shekels and started its surge towards development. The first plant that was set up was Coronel Coffee Plant with a production capacity of 80 tons per year. In the after math of the victory of the North Vietnamese, the plantation system got converted into the form of collectivised agriculture and thus resulted into lower produce thereafter. Beyond 1986, with industrialisation, commercialisation and globalisation private enterprises came up. The balanced coordination and cooperation among the producers, government and consumers made this product a major export unit all over the world.

Vietnam Coffee Market Research Report

During 1975 to 2010, the planting area of coffee beans increased from 134,000 hectares to 513,000 hectares, up with more than 30 folds. For many years, Germany is the largest export destination of Vietnamese coffee beans. The coffee trees planted in Vietnam are mainly Robusta and Arabica coffee. Southern Vietnam is humid and hot, suitable for growing Robusta whereas the northern part is suitable for Arabica. In 2014, total coffee cultivation area in Vietnam was 653,000 hectare, increasing by 2.7% YOY. This was 30 times the area in 1961. Export value of coffee beans accounts for around 15% to 20% of the total export of agricultural products in Vietnam. Commercial coffee production provides jobs for over 500,000 farmers with income growth.

Presently, Vietnam forms strong production capacity of coffee bean rough processing and deep processing. The designed rough processing capacity is 1.5 million tons/year, coffee bean baking and coffee powder processing capacity is 52,000 tons/year and instant coffee production capacity is 36,500 tons/year. Recent policy amendments in 2010, carried out by the Minister of Agriculture and Rural Development. The planning has been done in such a way that Vietnamese economy would follow export led growth in coffee. The strategies provide a firm hand with high sustainable, superior quality, healthy competition for national food security and to achieve higher growth trajectory. A new methodology involving cooperatives, strategic groups, privately owned cultivators and civil society organizations in accordance with government have been mushrooming since 2011.

The proportion of baking and instant coffee deep processing with high benefit is growing. Vinacafe, Trung Nguyen, An Thai, Me Trang and Phuong Vy are famous coffee brands recognized by consumers. Meanwhile, coffee processing devices and facilities made in Vietnam are sold to the domestic and foreign markets. Vietnamese coffee is popular in the world. The export volume and value present a fast growing trend. During 1991-1995, the annual export volume of Vietnamese coffee beans was only 142,000 tons, with the annual export value of only USD 210 million. During 2006-2016, the export volume exceeded 1 million tons with the highest yearly export value exceeding USD 3 billion.

Speciality and Uniqueness of Vietnamese coffee:

Coffee can be easily brewed into ice or cold milk known as the cà phê đá

Coffee is prepared in single serving and is served tableside while it is still being brewed.

Sweetened condensed milk Is used in place of fresh milk as a community preference.

European scientists contracted by private industry have classified the growing regions of the Buôn Mê Thuột into numerous microclimates.

Vietnamese coffee producers blend multiple varieties of beans for different flavour characteristics and balance.

Coffee is very cheap in Vietnam and is a favourite drink of Vietnamese. The price of a cup of coffee is low to only USD 0.5 in Vietnamese street, which is affordable for any class of the society. The planting area of coffee beans expands continuously in Vietnam. The output volume grows accordingly, which promotes the processing, sales and export of coffee beans. Coffee has formed a complete industry chain in Vietnam, which is also an important part of Vietnamese economy providing millions of job opportunities. The output volume of Vietnamese coffee beans will keep growing and both domestic demand and export volume will grow accordingly.

‘Complex flavour chemistry works to make up the flavours inherent in coffee”. Some companies, like Nestle, have processing plants in Vietnam, which roast the beans and pack it. Environmentalists have started warning that the catastrophe of disforestation is looming. WWF estimates that 40,000 square miles of forest have been cut down since 1973, some of it for coffee farms, and experts say much of the land used for coffee cultivation is steadily being exhausted.

Key Topics Covered in the Report:

Vietnam Coffee Market Research Report

Vietnam Coffee Market Size

Vietnam Coffee Weasel Market

Vietnam Coffee Beans Market Size

Vietnam Coffee Retail Market

Vietnam Coffee Import Volume

Vietnam Coffee Export Volume

Vietnam Coffee Production Output

Vietnam Coffee Packaging Market

Vietnam Coffee Market Future Outlook

Vietnam Hot Beverages Market

Vietnam Coffee Market Competition

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Ken Research

Ankur Gupta, Head Marketing & Communications


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