Development of a strategy for Vietnamese coffee to reach the market of billions of people

VCN - China is a potential market for Vietnamese coffee because of high demand and stable growth with an average coffee import increase of more than 25%/year. However, this is no longer an easy-going market. Consumers in this country are quite demanding when it comes to experiencing new high-quality coffee products.
Coffee export is forecast to continue to win big Coffee export is forecast to continue to win big
Coffee exports hoped to set new record Coffee exports hoped to set new record
With the area narrowing, Vietnam's coffee output is expected to continue to decrease With the area narrowing, Vietnam's coffee output is expected to continue to decrease
China is a very potential market for exporting roasted coffee beans and green beans. Illustration photo: ST
China is a very potential market for exporting roasted coffee beans and green beans. Illustration photo: ST

Coffee import speed increased by more than 25%/year

Coffee is one of Vietnam's key agricultural products, ranking second in the world in terms of output and export value. According to statistics from the General Department of Customs, in the 11 months of 2023, Vietnam's coffee exports are estimated to reach approximately 1.38 million tons, worth USD 3.54 billion. Vietnam's average coffee export price in November 2023 reached a high of USD 3,148/ton, an increase of 32.8% compared to November 2022. In the first 11 months of this year, Vietnam's average export price of this type of nut is estimated at USD 2,570/ton, up 11.9% over the same period last year.

According to the Vietnam Coffee and Cocoa Association, Vietnam's export coffee prices have continuously increased sharply and are at a record high for many years, leading to an increase in domestic coffee prices, so it is expected that the amount of coffee exported in 2023 will reach about 1.72 million tons with a value of more than USD 4.2 billion, a new record in coffee exports for many years.

Evaluating the Chinese market, Mr. Le Hoang Tai, Deputy Director of the Department of Trade Promotion (Ministry of Industry and Trade) said that China and Vietnam are two neighboring countries, geographically close, and have a close relationship and comprehensive strategic cooperation. With many advantages in economic and trade cooperation, over the past time, trade exchange between the two countries has maintained a stable and sustainable growth momentum.

According to statistics from the General Department of Vietnam Customs, import-export turnover between Vietnam and China in 2022 will reach USD 175 billion, an increase of 5.47% compared to 2021. China continues to be the largest trading partner, Vietnam's largest import market and second largest export market (after the US). Vietnam is also the 6th largest trading partner among all countries and territories that have trade relations with China; at the same time, in ASEAN, Vietnam is China's largest trading partner.

Regarding the coffee export market, currently Vietnam's largest coffee import market is the EU, followed by the US, Japan... With the Chinese market, although it is not a market that accounts for a large proportion of Vietnam coffee, but many Vietnamese businesses are also very interested in this market. Because of the quantity, the average coffee import rate increases by more than 25% per year as young people in this country increasingly prefer coffee to tea. Vietnamese coffee has the opportunity to export to China, a market with great potential with high purchasing power. However, this is also a highly competitive market, requiring businesses to invest in diversifying specialty coffee products, processed coffee and meeting strict quality standards.

Invest in diversifying products

According to information from the Department of Crop Production (Ministry of Agriculture and Rural Development), the country currently has more than 710,000 hectares of coffee. Vietnam is ranked 6th in the world in terms of coffee area, but thanks to the highest productivity in the world, Vietnam has the second largest annual coffee harvest in the world, from 1.75-1.85 million/ton. However, out of a total of more than 710,000 hectares, Vietnam only has more than 185,000 hectares of coffee area certified for sustainable production, with certifications: Utz Certified, Rainforest, 4C, VietGAP... Therefore, many businesses export proposed coffee export, localities need to plan key coffee areas, promote replanting, apply sustainable coffee production processes certified by VietGAP, 4C, Rainforest, organic... to meet standards strict export from international markets including the Chinese market.

According to experts, in China, instant coffee and processed coffee are occupying a large market share thanks to their convenience in use. This is also considered a favorable factor to help Vietnamese coffee businesses promote coffee consumption in this billion-people market. To officially export to the Chinese market, according to the Ministry of Agriculture and Rural Development, Vietnam should build an industry development strategy and brand building in parallel with building production areas and specialized farming areas. Focused, large-scale based on market signals. Businesses need to regularly update and comply with regulations on quality standards, testing, quarantine, packaging, traceability of the Chinese market... At the same time, there is a strategy on logistics issues, build warehouses to preserve agricultural products in border localities. This will help preserve it longer and maintain good quality when the delivery deadline arrives.

China is a large market with highly competitive, so coffee exporting businesses are trying to invest in diversifying specialty coffee products and processed coffee, promoting export activities to the billion-people market in an official form.

According to VCU Joint Stock Company, China is a very potential market for exporting roasted coffee beans and green beans. Ms. Nguyen Thi Thanh Thuy, an employee of the Company's export department, shared that after contacting many customers in China; the Company better understood consumer tastes and market trends in this country to have an approaching plan in the near future. “Through introduction, I saw that they are very interested in green coffee products and roasted coffee beans. Currently, the Company has 20 potential customers interested in importing raw materials. In 2023, the Company has expanded its production factory, so output is expected to increase compared to previous years. The company plans to sell about 1,000-1,500 tons of processed coffee to the market," Ms. Nguyen Thi Thanh Thuy said.

By Xuan Thao/Bui Diep

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