(HSV VIETNAM GROUP) - "Vietnam's coffee industry can bring in profits of about 20 billion USD/year if we know how to do better today as well as build a national strategy for developing the coffee industry." That was the sharing of Founder - Chairman of Trung Nguyen Legend Group Dang Le Nguyen Vu 10 years ago at the Buon Ma Thuot Coffee Festival. Up to now, where is the Vietnamese coffee industry in that vision?
According to data from the General Department of Customs, in 2022, Vietnam's coffee exports will reach more than 1.78 million tons, with a turnover of over 4.06 billion USD, up 32% compared to last year, reaching a record high ever.
The above results were achieved thanks to promoting exports, when last year, coffee prices increased globally, combined with the US Federal Reserve (Fed) increasing interest rates 7 times in a row, causing the USD/VND exchange rate to increase sharply.
Along with that, the price difference between Arabica and Robusta coffee amid concerns about economic recession, makes buyers tend to switch from consuming Arabica to Robusta to minimize costs but still be able to use coffee. According to forecasts of the Vietnam Commodity Exchange, Vietnam will continue to be the world's largest coffee producing and exporting country in the period 2023-2033. Ranked second in the world in coffee exports, with increasing output and value, however, for many years, the world has only known Vietnam as a raw coffee exporting country. Vietnam's global and branded coffee exports are still very limited.
According to the vision of leading coffee group Trung Nguyen Legend, Vietnam's coffee industry can reach 20 billion USD in the global coffee value chain if there are right strategies and policies. At the scientific conference with the topic "Developing the brand of Buon Ma Thuot city to become "Coffee city of the world" organized by Buon Ma Thuot City in 2022 - an important project according to Resolution No. 103/NQ-CP on Action Program to implement Conclusion No. 67-KL/TW dated December 16, 2019 of the Politburo on the Construction and Development of Buon Ma Thuot City, province Dak Lak to 2030 and vision to 2045, Trung Nguyen Legend Group has contributed many insights and lessons learned for the Vietnamese coffee industry to realize the vision of 20 billion USD. Notably, there are successful lessons from world coffee powers such as Colombia and Brazil with the right formulas and strategies to increase export value for the national coffee industry.
In Colombia, this country has an export output of only nearly 1 million tons but earns a value of 3.2 billion USD, ranking 3rd in the world (while Vietnam exports 1.78 million tons, earning over 4.06 billion USD, equivalent to an export value 30% lower than Colombia). What helps Colombia gain higher value is thanks to the quality and coffee brand that the country has built. Since 1927, the Colombian Government has established the Colombian Coffee Federation, with the role of helping farmers improve coffee quality through an extensively linked farming system, as well as transferring coffee production techniques to achieve optimal efficiency. The Colombian Coffee Federation also sets standards for sustainable coffee development for the "Coffee Triangle" region in all stages from production, environment, product quality, and developing policies to harmonize the preservation of the coffee cultural landscape with economic benefits.
Colombia also focuses on building policies to preserve and develop Colombian coffee such as: building a Coffee Price Stabilization Fund, policies to preserve the Colombian coffee cultural landscape, building a National Coffee Park, Coffee Culture Museum, promoting Colombian coffee culture closer to the public...
Along with the marketing communication message "100% Colombian coffee" to the world, the Colombian coffee industry has not only enhanced its position and brand in the world's largest consumer markets such as the US, Canada, and Europe; promoting the labor market for the coffee industry, economic development and related industries such as tourism, transportation, etc. Meanwhile, Brazil - the world's largest coffee producing and exporting power, has operating policies and organizational management of the coffee industry that were built and operated a century ago.
Brazil exempts coffee exports from tax, but imported green and roasted coffee is taxed at 10% and instant coffee at 16%. In particular, Brazil places great emphasis on domestic consumption, adopting a policy that no raw coffee beans can be imported into Brazil. According to the World Coffee Association, Brazil is the second highest domestic coffee consumer in the world, just behind the United States and has the highest domestic consumption among coffee producing countries. Currently, Brazil annually domestically consumes about 600,000 tons of coffee, average coffee consumption per capita reaches 4.7kg/year.
Along with trade promotion policies, Brazil has developed many policies to protect the rights of coffee farmers and ensure the quality of raw materials, such as the Rural Premium Subsidy Program (PSR) of Agriculture, which plays an important role in promoting rural insurance contracts for the coffee industry by 2021, with a subsidy rate of 40%. At the same time, focusing on technology investment and mechanization in planting, harvesting, and processing. coffee and investing budget to promote the Brazilian coffee brand around the world as well as organizing regular, periodic events and prestigious coffee awards at national and international levels are also strategies for Brazil to enhance the value of its brand and coffee.
Colombia and Brazil are the closest successful lessons for the Vietnamese coffee industry to learn and enhance the value of Vietnamese coffee with a focus on developing and preserving high-quality coffee raw material areas in a sustainable manner in many economic, social and environmental aspects, moving towards forming a value chain and its own unique ecosystem in the coffee capital of Buon Ma Thuot in particular and in Vietnam in general.
To turn the vision of 20 billion USD of Vietnamese coffee into reality
Aspiration and vision of 20 billion USD for Vietnam's coffee industry from "7 initiatives for the global coffee industry" of
Chairman of Trung Nguyen Legend Group Dang Le Nguyen Vu continued to share at the press conference of the 8th Buon Ma Thuot Coffee Festival.
In the current context, the quality of Vietnamese Robusta has begun to be recognized by experts in the global coffee and culinary industry, occupying a high position, meeting strict world standards. At the same time, Robusta coffee is increasingly widely used and popular due to the influence of communication and promotion activities, combined with consumption trends during a period when the global economy is starting to show signs of recession. The economic value of Robusta coffee is also predicted to increase because Robusta farming conditions are more favorable in the face of climate change. This brings opportunities for the Buon Ma Thuot Robusta coffee brand and the growing Vietnamese coffee industry.
Since 2015, Vietnam has also begun to participate in training and methodically producing and processing Fine Robusta specialty coffee according to world standards. Many playgrounds for evaluating and tasting quality coffee have also been created through the "Vietnam Amazing Cup" competition in 2018, 2019 and 2020. However, to realize the vision of 20 billion USD for the Vietnamese coffee industry, the quality strategy and value content of Vietnamese coffee need to be increased more comprehensively.
Coffee cultivation and harvesting need to focus on harmony with the environment and nature to ensure environmental sustainability, limit local ecological imbalance, and create better quality coffee beans. At the same time, businesses are increasing the application of science and technology to intervene naturally or directly on beans during coffee processing and roasting to further improve the quality of Robusta beans.
Besides, the characteristics of Robusta coffee as well as the true value of Vietnamese Robusta coffee beans are still not properly understood by consumers. In-depth scientific research on the properties of Buon Ma Thuot Robusta coffee beans needs to be researched by experts and scientists to confirm the quality and superiority that only Robusta coffee from this land has.
Not only does it improve the quality of Vietnamese Robusta coffee beans, a suitable policy allowing the import of delicious coffee ingredients from around the world will help businesses create and mix with quality Robusta coffee beans to create delicious coffee products that bring Vietnamese brands to the world. In particular, the initiative "Rethinking the concept of coffee" in "7 initiatives for the global coffee industry" was initiated by Trung Nguyen Legend Group in September. November 2012, which is being gradually implemented, has opened the way for the Vietnamese coffee industry to reposition itself at a higher level. Accordingly, Vietnam's vision is not only to be the world's leading exporter of Robusta coffee in terms of output and quality, but also to be the center, taking Buon Ma Thuot - the hometown of the world's best Robusta coffee beans as the capital, initiating Vietnam's unique ideology, philosophy, and coffee culture.
Along with symbolic projects and works such as Coffee City, Coffee World Museum, Buon Ma Thuot Coffee Festival, creative products to elevate coffee into culture and art... are being formed and developed in this land, at the scientific conference "Developing the brand of Buon Ma Thuot city to become 'Coffee City of the World'; developing ecological tourism, exploiting local cultural values associated with national monuments", Trung Nguyen Legend offers three comprehensive perspectives of the coffee industry: Physical Coffee (the entire physical value chain of the coffee industry from research, cultivation, processing, viewing; from raw coffee to fine coffee; from packaged coffee to the coffee viewing space or enjoying coffee consumption at home,...), Spiritual Coffee (all the aesthetic and artistic elements to express and accompany coffee; the cultural and spiritual values that create coffee). coffee and what comes from coffee) and Social Coffee (the connection and creativity of coffee users and their positive or negative impact on the overall development of society).
This opinion has been responded to by many delegates, leaders of ministries, branches, leading economic and tourism experts in the country and senior experts in the fields of policy mechanism building, branding, and urban development. Associate Professor, Dr. Dang Hung Vo - former Deputy Minister of Natural Resources and Environment shared: "For Buon Ma Thuot to become the world's Coffee City, many coffee-related products must be created so that coffee becomes culture, art... not just a drink. On the basis of culture, art... coffee touches people's emotions, helping to erase ethnic, national, regional boundaries... And with this orientation, Trung Nguyen Legend is a collection The group has made great contributions to the locality and Vietnamese coffee." Founded in Buon Ma Thuot, Trung Nguyen Legend has been one of the few pioneering businesses accompanying in building Buon Ma Thuot to become a "World's Coffee City" with specific actions, such as: Implementing the process of proposing "Iced milk coffee", "filter coffee" of Vietnam and the Buon Ma Thuot coffee growing region to become a cultural heritage recognized by UNESCO; Accompanying to build the Buon Ma Thuot Coffee Festival into an international festival; Accompanying international coffee events to Buon Ma Thuot; Contribute ideas and ways to build a global coffee social network - a construction and communication center for Buon Ma Thuot; Promote and promote cultural values associated with national monuments through healing tourism activities; Creating programs and spaces to experience coffee ideology, culture, and spirit.
Processing and enjoying a cup of filter coffee and Vietnamese iced milk coffee is expected to become an intangible cultural heritage of humanity.
With the commitment of businesses like Trung Nguyen Legend, the support of state agencies, the determination of local authorities and the joining hands of the community of experts, growers, coffee producers... will create solid main pillars from public policy - infrastructure - human resources - finance - technology for Vietnam's coffee industry to realize the vision of 20 billion USD, affirming its position on the world coffee map./.
Ha Diem