Vietnam’s Specialty Coffee Entrepreneurs are Tasting Success

Vietnam has a rich tradition of coffee drinking and coffee cultivation and in the past decades the country has grown into a global coffee exporting powerhouse and world’s largest producer of robusta coffee. However, much of Vietnam’s coffee exports are commodity coffee; robusta beans are often used as a base in coffee blends or coffee drinks like Japan’s ubiquitous canned coffees.

Commodity coffee prices are determined on international exchanges and there is little opportunity for growers to differentiate their crops or capture additional value for higher quality or better flavors.  This leads to a potential opportunity to further develop the specialty coffee industry in Vietnam, especially coffee for the domestic market, where rising incomes and urban lifestyles are fueling a dynamic café culture.

This specialty coffee industry has been a target of Meros’ ongoing work in Vietnam. We are working with the Japan International Cooperation Agency (JICA) to understand opportunities and challenges for Japanese and other foreign investors into Vietnam’s agricultural value chains.

The team, led by Meros’ Chisa Ogura, together with experts in program evaluation, investment and private sector development recently visited La Viet, an example of a larger, fast growing specialty coffee business. It is located in the highlands of Dalat, the center of the coffee industry. The owner Tran Nhat Quang is enthusiastic and clearly committed to creating high-quality, specialty coffee in Vietnam. The company grows coffee in their own fields as well as collecting coffee from 120 farmers. 60% of their coffee is exported as green beans for roasting overseas. The other 40% is processed and roasted by La Viet themselves, mainly for the domestic market. This domestic market is expanding and La Viet now operate 5 retail coffee shops in Vietnam.

La Viet owner Tran Nhat Quang has also invented an original style of Vietnamese coffee maker. (There is now one in the Meros office in Tokyo –  come try it in our office!)

Who will drive the emerging specialty coffee industry?

But can a small Vietnamese coffee producer get to the size of La Viet? Is it realistic for small producers to take the risk of leaving the reliable sales channel of commodity export beans to take on the domestic specialty coffee market? With the right investment, is there really opportunity here for Vietnamese growers? These are the questions we wrestle with.

Mr. Nguyen Van Son’s business Sonpacamara indicates that there are entrepreneurs who may be able to do it.  Nguyen Van Son’s business is small – he harvests 4 hectares of his own coffee, plus 6 hectares from a partner. While he used to sell for export to Japanese roasting giant UCC, he now only deals with specialty coffee. He invested in his own roaster and now roasts 90% of his coffee for the domestic market. His coffees are characterized by a very clear and fruity taste.

Mr. Nguyen is not originally a coffee grower – left his career as a car dealer for coffee in 2005. Entrepreneurial spirit, charisma and passion for coffee drive his success, attracting volunteers and interns from around the world. Why coffee?  “Oh, I didn’t choose coffee,” Nguyen says. “Coffee chose me!”

Former IFC-Executive Takuro Kimura Joins Meros as Strategic Advisor

Meros Consulting is pleased to announce that Takuro Kimura, former executive at the International Finance Corporation (IFC), has joined Meros as Strategic Advisor.

“We are thrilled to have Takuro join our team and be able to share his extensive experience in public and private sector agribusiness investment, particularly in the context of investment in agriculture development in emerging economies,” says Meros’ Managing Director Chisa Ogura.

Takuro’s previous career at the IFC spanned two decades and included posts in Washington, Tokyo and Cairo. The IFC is the private sector arm of the World Bank Group, offering investment and advisory services to support private-sector development in emerging markets. Takuro was Global Head, Manufacturing from 2011—2014 and had previously held senior positions covering agribusiness, services and energy (oil, gas and mining) across all continents.

Most recently, after returning from Washington to Tokyo, Takuro was the Managing Director at Orix Corporation’s Global Business Development and Investment Group, focusing on investment in emerging economies with a focus on agriculture value chains, healthcare and related logistics

“We have gotten to know Takuro over the past three years, and have been impressed with his energy, insightful business perspectives and interest in developing teams and people. He brings valuable, practical insights from past investment projects, both on the factors for success and the risks to anticipate,” said Lucia Vancura, Meros’ Director of Operations and Global Markets.

“I believe food and agriculture is the cornerstone of global sustainability. Smart investments and business innovations can create significant social and economic impact, “ said Takuro Kimura. “Meros has solid sectoral experience and a strong commitment to identify business and investment opportunities for its customers. I look forward to working with Meros to support the creation of business opportunities, especially for Japanese companies, in emerging markets in Asia and beyond.”

Takuro’s experience in bringing public and private sector players together to create value for growing businesses is extensive and he is deeply familiar with the as needs and expectations of investors. Together, we will be focusing on developing strategies to strengthen global food systems and promote economic development along the agricultural supply chain in fast-growing markets, particularly in Southeast Asia, India and Africa.

Takuro is a graduate of Kyoto University’s law faculty, completed graduate work at the Ecole Superieure du Commerce de Paris (ESCP) and received his MBA from ISA-HEC in France. He began his career at Sanwa Bank in Tokyo and later joined the IFC-managed Africa Enterprise Fund, focusing on SME investment consulting in Sub-Saharan Africa, based in Abidjan, Ivory Coast.

New study projects CPTPP and Japan-EU trade agreements will reduce US dairy exports to Japan and boost competitors

A Meros Consulting study released Wednesday by the U.S. Dairy Export Council projects that the two new trade agreements made by Japan will benefit global dairy suppliers such as the EU and Oceania, while costing the US dairy export industry billions of dollars in lost sales.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force on Dec 30, 2018 and the Japan-EU Economic Partnership Agreement (JEEPA) went into effect today, February 1st, 2019. All major dairy suppliers to the Japanese market, including Australia, New Zealand, Canada, the Netherlands, Germany, Denmark, Ireland and France, are included in one of these two agreements. Only the United States is missing, after pulling out of TPP negotiations in January, 2017.

Through industry interviews to assess price sensitivity and product substitutability, together with extensive historical data analysis, Meros developed a model to quantify the future economic impact of those agreements on key U.S. dairy products and ingredients over the next two decades. The study showed that the US could double its market share with a level playing field. However, without quick action by the US to regain competitiveness in the market, US dairy exports will be at a strong competitive disadvantage, particularly for cheese, whey and lactose, resulting in lost US sales of $5.4 billion over 21 years.

Now is a particularly critical time for global cheese suppliers to Japan as Japan’s cheese imports are expected to show a 1.6-fold expansion over the next 10 years under CPTPP and JEEPA. As a result, the US dairy industry is supporting further bilateral trade talks with Japan. As USDEC CEO and President Tom Vilsack commented in a January 30th news release, “U.S. dairy farmers and processors strongly support the Administration’s launch of trade talks with Japan. We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture.”

U.S. Dairy Export Council’s release of Meros Consulting’s Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan can be downloaded here:

Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan