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!”

Seafood sustainability, food safety and packaging innovation are highlights at the EU Seafood Expo

Meros Director Tina Peneva attended the annual Seafood Expo Global in Brussels (May 7-9, 2019) to learn about the latest trends in the seafood industry, reconnect with long-time Meros friends and discuss collaborations with new partners and industries.

The show hosted over 2000 companies in the seafood sector from 88 countries, billing itself as the world’s largest expo for the seafood trade. Below are some of our impressions of the seafood trade trends we observed.

Fresh seafood displays were still a key attraction for visitors, although there seem to be fewer and fewer seafood displays each year and more focus put on business meetings. The trademark of Turkey’s Group Sagun – a leader in bluefin tuna production in the Mediterranean Sea, all of it processed for the Japanese market – is their exhibit of a whole tuna which has probably turned into the most Instagrammed item of the show.

Japan remains the number two seafood importer in the world behind the US and while seafood consumption has been decreasing in Japan, the country still consumes as much as 33 kg of seafood per capita per year (compared to the US, which is closer to 7 kg.) But what is Japan offering as an exporter? In Brussels, the Japan pavilion hosted booths that exhibited products and skills targeting the booming sushi market worldwide. Seaweed products, especially nori, seemed to inspire special interest among visitors. Another product we were interested to see was farmed kampachi (yellowtail). Meros’ teammembers worked with closely with kampachi fishery cooperatives in the early days of the industry’s export development  and seeing the industry increasingly established on the global stage is a real bright spot for Japan.

The booths from emerging seafood producing countries such as Myanmar were also attracting global buyers. There is solid export potential for aquaculture products from Myanmar such as rohu, shrimp, soft shell crab and pangasius. The Dutch Centre for the Promotion of Imports from Developing Countries (CBI) has been working with selected Myanmarese exporters to build their business skills for exporting to the European market. The program is part of a wider strategy focused on developing sustainable businesses in Myanmar.

Raw seafood goes fancy! The Spanish company Gimar displayed novel single-serving packs of raw salmon and tuna cuts for the food service industry. The “Skin Pack & Airbag” packaging technology allows fish to stay fresh in a double protected environment: the SkinPack is a film that is forms a vacuum around the fish and the “Air bag” seals the pack and protects the product during transportation.  As sushi and raw seafood consumption grows in popularity globally, food safety measures and improved packaging technologies for raw seafood are increasingly a focus of company innovation.

              

The show gives out Seafood Excellence Global Awards for the best retail and HoReCa seafood products. The items we found most interesting featured different types of seaweed, mixed in unusual combinations and attractive packaging. Some of the finalists:

  • Guacamole with fresh spirulina algae (Retail)
  • Fish terrine with a seaweed center that resembles avocado (HoReCa)
  • Seafood salad in a wooden box (Retail)

EU Agricultural Mission to Japan highlights interest in consumer demographics, organic markets and retail innovation

This week Meros’ Managing Director Chisa Ogura presented on Japanese consumer food trends to delegates of the High Level EU Agricultural Mission to Japan led by EU Agriculture Commissioner Phil Hogan. There were over 70 delegates, including agricultural industry reps, SMEs and farmers from throughout the EU, all looking to understand how the new EU-Japan EPA can benefit food and agricultural trade between the EU and Japan.

It was a full house and we got great questions from the delegates on organic trends (especially in wine and beef), the impact of demographic changes and the notoriously fast turnover in new retail products.

Japanese consumers now spend more on bread than rice, more on meat than seafood and more on wine than sake, with cheese and yogurt consumption growing rapidly. This brings many potential opportunities for EU food and agriculture to develop new business in Japan.

Nevertheless, to successfully build a business in Japan, careful understanding of the characteristics of the Japan market is of course critical. For example, one area of interest to delegates was the fact that while countries like Denmark (227€ annual per capita spending), Germany (116€ per capita) and France (101€ per cap) have booming organic markets, consumer interest in organic products has been slow to catch on in Japan (only 8€ per capita).

The price premium for organic is relatively small in Japan, compared to some of its Asian neighbors, where organic products can command an extremely high price premium. Japanese consumers also tend to be convinced that domestic conventionally grown agricultural products are already safe and healthy and are less willing to pay a premium for organic certified products. In addition, organic agriculture is difficult in wet and humid Japan and this has resulted in fewer Japanese companies producing, promoting and educating on organic practices. While EU organic products are welcome in Japan, more of the burden for promotion and consumer education will fall on the EU side.

Other consumer trends that Meros highlighted included the Japanese consumer expectation for constant relaunches and limited editions of retail food and beverage products, which contrasts with many EU exporters’ focus on classic and authenticity, rather than innovation.  Not only is this seasonal packaging an issue, but urban Japanese consumers tend to bring their groceries home by hand or in a bicycle basket, to a kitchen with extremely limited storage space. Responsiveness to these Japanese consumer lifestyle realities can greatly improve EU exporters’ marketing and promotion strategies.