The battle for market share of instant coffee

According to Bloomberg, instead of selling raw coffee beans to foreign companies for processing into instant coffee, Intimex – Vietnam's largest robusta coffee supplier – is preparing to supply instant coffee powder of own in early 2020.

This change aims to gain more profit from the growing demand of Asian markets with drinks that can be prepared as quickly as instant coffee, as well as fluctuations in market prices. international.

“We don't want to miss the opportunity to jump into the instant coffee market. It is more profitable and less risky. That means we don't have to depend on the prices of the London market.” Mr. Do Hoai Nam, Chairman of Intimex Group, which exports 1/3 of Vietnam's robusta coffee, the bitter taste, is mainly used to make instant coffee.

Fierce competition

Vietnam's coffee industry is considering expanding the production of water-soluble coffee as a profitable growth proposal rather than just continuing to grow more trees.

According to Euromonitor International, India will lead the growth in the instant coffee retail market in Asia, increasing by nearly 12% per year to US $ 850 million by 2024. Market researchers also predict an increase. Strong growth in Indonesia, Malaysia, Philippines, Thailand and Vietnam.

“Asia is the fastest growing coffee consuming region in the world, where many consumers are still beginning to form a coffee drinking habit,” said Jose Sette, head of the International Coffee Organization in London. said.

“Instant coffee is an ideal product to introduce drinks to these consumers because it is easy to prepare,” Jose Sette said in an email. Vietnam can take advantage of its geographical location and low production costs to expand in the region.

Intimex is based in Ho Chi Minh City. Ho Chi Minh City, which was a state-owned company before being equitized in 2006, aims to surpass Nestle as the largest pure coffee supplier in Vietnam in the next 5 years through public expansion. annual capacity to 20,000 tons.

“Nestle, a Swiss-based Nescafé manufacturer, will compete with both domestic and international companies by leveraging scale, technology and manufacturing expertise, with over 75 years of experience in coffee and grow together with Vietnamese coffee farmers, “said Ganesan Ampalavanar, General Manager of Nestle Vietnam.

“There are a lot of small and medium-sized companies focusing on strong competition with big players in the market,” said Ganesan Ampalavanar.

The leading brands of instant coffee in the Vietnamese market today include: Nestle's Nescafé instant coffee; Vinacafe; G7 of Trung Nguyen; Mekong Sun of Sun Wah Group; Tchibo of Tchibo Group (Germany); K-coffee of Phuc Sinh …

At the end of 2018, NutiFood Nutrition Food Joint Stock Company officially entered the instant coffee business market when launching Nuticafe – Fresh Ice Milk Coffee.

Recently, the Vietnamese coffee market has the presence of a new player, Ong Bau Coffee Company. Contributing to the coffee business with a charter capital of VND 100 billion is the daughter of Mr. Doan Nguyen Duc (Bau Duc), son of Mr. Vo Quoc Thang (Bau Thang) – Chairman of Dong Tam Group, and a staff from Nutifood.

The main business is to produce coffee such as roasting and decaffeinating coffee, producing instant coffee products, filter coffee, filter bags, extracting coffee and concentrated coffee, Export of coffee substitutes.

According to Bau Duc's share, Ong Bau Coffee is a joint stock company co-founded by many members but is not a subsidiary of Hoang Anh Gia Lai. With a land fund of organic coffee that has been deployed for a long time, he and his partner are planning to produce clean coffee and sell products to the market in the near future.

According to data compiled by Bloomberg News, Vietnam is capable of producing 58,500 tons of instant coffee per year by 9 factories. In particular, the factories are invested by Nestle, Olam International Ltd., Tata Group and CCL Products India Ltd. accounting for about 70% of total production.

With expansion plans and new investments from domestic and international companies, Vietnam's instant coffee production is expected to increase by at least 40,000 tons in the next 5 years.