Instant coffee: the right orientation?

Currently, Vietnam has three instant coffee producers: Vinacafé which produces 1,000 tonnes a year, Nestcafe (1,000 tonnes a year), and Trung Nguyen (200 tonnes a year).

Of the instant coffee available on the market, pure instant coffee amounts to just 14%, while the remaining is ‘3 in 1’ milk coffee. Vinacafé leads the ‘3 in 1’ coffee market with 50.4% of the market share, followed by Nestcafe with 33.2%, while the remaining 16.4% is shared by other producers.
Recently, Vinacafé launched a new product, ‘4 in 1’ coffee (with sugar, milk and ginseng), while Nestcafe has marketed three ‘3 in 1’ coffee products with new packaging and slogans.

According to a recent market survey released by the US’ Taylor Nelson Sofrees, Vietnam’s coffee consumption in 2004 tended to increase compared to other drinks; instant coffee saw a decrease of 9.7% over 2003. While the market is narrowing, small local companies are investing in instant coffee production. But are they going on the right track?

Vietnamese and foreigners  taste differently

Vietnam exports only coffee beans, while it cannot compete with other foreign producers in roasted coffee. Vietnam even imports instant coffee from Indonesia.

According to Nguyen Thanh Tung, Head of Marketing at Vinacafé, the biggest obstacle for exporting roasted coffee is the taste for ‘amalgamated coffee’. Amalgamated coffee fits the taste of young customers, while it does not seem to be attractive to foreigners.

Bringing Vietnam’s coffee to the world is the aim of Vietnam’s coffee producers; however, before doing this, experts point out, the urgent need to develop roasted coffee instead of mixed products

Source: Vietnam Trade Promotion Agency