Who are Vietnamese coffee producers targeting?

While Cau Dat’s coffee has a bright future as it can be sold through the Starbucks’ chain, other Vietnamese roasters can only dream of selling coffee on such a big scale.

When a customer orders ‘a cup of Cau Dat genuine coffee”, the bartender at a small café belonging to Vovo Company in district 1 of HCM City was surprised.

“Do you really want Arabica coffee with a sour taste?” she asked.

Pure Arabica coffee has mild sour taste. Meanwhile, the majority of Vietnamese like coffee with strong flavor. Most of Vietnam-made coffee products are Robusta or mixed with Robusta.

When asked about Arabica coffee consumption, Do Minh Tuan, managing director of Archcafé, a coffee company, said Vietnam does not have many choices like Indonesia, Kenya and Colombia.

Even Cau Dat, the Vietnamese ‘Arabica coffee metropolis’, can only supply 10,000 tons of Arabica coffee a year. In recent years, the total Arabica output is just 40,000-50,000 tons per annum.

Meanwhile, Linton of Indonesia, the fourth largest coffee exporter, alone produces 15,000-18,000 tons a year.

With low productivity and high costs in technologies and machines, no Vietnamese company focuses on developing and exporting Arabica products.

ArchCafe now provides Espresso coffee, but only to diversify its products. Only 1,000 kilos of the products are consumed by the company every year.

As Vietnamese consumers do not like Arabica, while the production cost is high (2-3 times higher than Robusta), the company mostly distributes products through the Horea (hotel, resort and VIP room at airports) channel.

A Vovo representative revealed that Vovo has discussed with Starbucks about supplying its Arabica coffee to the café chain. The company also plans to open a café chain domestically.

Raw material areas

Tin Nghia Corp, a big company in the coffee industry, has decided to expand its production scale in Laos to develop the material growing area.

Vietnam is following a coffee material area plan under which the Arabica growing area will expand to replace the Robusta area.

However, an analyst commented that Vietnamese coffee producers still hesitate to develop Arabica coffee. 

Do Ha Nam, chair of Intimex, said the company does not intend to develop Arabica, though Intimex is the leading coffee exporter.

Nam said though Arabica can bring higher export value, it is very difficult to develop Arabica growing area because of the unfavorable climate and soil conditions.

A Taiwanese enterprise grew tens of hectares of Arabica coffee in Lam Dong, but gave up the project.

Tin Nghia has decided to develop Arabica coffee growing area in Paksong in Champasak province in Laos, which is 1,100 meters above sea level.