Vinacafe Bien Hoa has recently received a major boost to its reputation as the most successful coffee processor in Vietnam: overcoming nine other domestic companies to receive an award from the World Intellectual Property Organisation (WIPO) as the best enterprise in implementing intellectual property concepts in production and business for 2005.

“Vinacafe has developed a precise strategy for developing and protecting its intellectual property", said Mr Le Xuan Thao, Executive Director of the Vietnam Fund for Technical Creativity Assistance (Vifotec), the representative office of the WIPO award in Vietnam “It pays proper attention to marketing strategies and to attracting and using the talent of its workforce to create quality products".

While other coffee processors in Vietnam have poured large amounts of money into loud and expensive advertising campaigns, Vinacafe Bien Hoa has quietly cemented its position as the number one coffee processor in the country by continually improving product quality. At the same time it’s given due regard to registering its trademarks abroad, Mr Thao said, and fighting against counterfeit products to ensure that low-quality products cannot be sold under its name. The Vinacafe trademark has now been registered in more than 70 countries.

Its primary means of attracting and retaining customers has been through guaranteeing quality. “People have a distinct taste for coffee", said Mr Phan Dang Dung, Vinacafe’s PR Manager. “Once they take a liking to a particular kind it is very difficult to steer them towards other coffee, even with loud advertising or costly promotions. We have built our quality prestige and customer base by producing coffee with a taste suitable to Vietnamese people".

The results are there for all to see. Holding more than 50 per cent of the domestic 3-in-1 instant coffee market, Vinacafe has overcome the well-known Nescafe to be the best selling instant coffee in Vietnam. It is also one of just a few brand names recognised as a High-Quality Vietnamese Product for ten consecutive years. Vinacafe can now be found in 40 countries in the world, and revenue last year was VND400 billion (around $25 million), up more than 30 per cent against 2004. Considering that each 20-gram sachet of Vinacafe instant coffee sells for just VND1,000 (6.2 cents), the figures are truly impressive.

Vinacafe is distinctive from other coffee in Vietnam because of the pure coffee flavour maintained in its products. “We are committed to maintaining the natural flavour of Vietnamese coffee in our products", said Mr Bui Xuan Thoa, Director of Vinacafe Bien Hoa. Many improvements have been made in equipment and human resource training to maintain the fragile flavour. The director himself flew to the former Soviet Union in 1990 to buy special equipment to improve the aging production line’s capacity from 80 tons per year to 120 tons and to guarantee quality. Further improvements were then completed to increase capacity to 200 tons per year. In 1998 the company built a second instant coffee factory with Danish equipment, the leading world technology for instant coffee production, which has a designed capacity of 800 tons per year. It plans to launch a new plant with Danish equipment capable of producing 3,200 tons next year in Dong Nai province’s Long Thanh Industrial Park.

The company has developed four types of milky instant coffee with varying portions of ingredients for different taste, and these account for 75 per cent of production. It also produces pure instant coffee and grounded coffee.

“They have even trained a group of experts who can identify different types of coffee and their origin just by smell and taste", said Mr Thao from Vifotec. The experts can also determine if flavour and taste have been affected by other factors such as fungus, over roasting or contamination from the packaging.

With its long history, Vinacafe Bien Hoa has built up its know-how regarding coffee processing, which might be its best intellectual property asset and the major reason for its prestige. “Money can buy modern technology but not know-how", said Mr Thoa. “Our know-how in exploiting the natural flavour of Vietnamese coffee is the greatest difference".

“Vinacafe coffee is of high quality because it is produced from high-quality technology and equipment and its director is one of only a few people who were trained properly in coffee processing and have a commitment to the industry", said Mr Doan Trieu Nhan, Vice Chairman of Vietnam Cocoa and Coffee Association.

Quality, quality and better quality is Vinacafe''s motto. “We think that consumers have the right to enjoy the best natural coffee flavour, which no artificial flavour can imitate", he said in explaining why the company isn’t involved in any advertising battles. “With limited financial resources, we choose to focus more on quality while paying attention to informing consumers about the quality of our products". The company spends around VND1 billion ($62,500) on advertising and trademark registration each year, compared to VND100–150 billion ($6.2–9.4 million) per year in 2003 to 2005 on updating its equipment.

The company is now focusing on promoting exports, particularly to the US, China and South Korea, and on expanding its market share in Vietnam, especially in the northern region. “We have a positive view about Vietnam joining the WTO", Mr Thoa told local media recently. “This presents us with a major opportunity to promote our exports.‿ Last year Vinacafe reported export turnover of $2.73 million.