By Philip Benton
Vietnam is a country famous for its delicious cuisine, motorbikes and thanks to Top Gear’s Vietnam Special, massive model boats. But perhaps you were unaware that it also plays an instrumental role in producing the world’s second most valuable traded commodity – coffee. A thriving coffee industry has helped to transform an economy, devastated by a 30-year long war, but can coffee sustain the rapid economic growth of Vietnam?
An unlikely success story
Vietnam is the world’s second largest exporter of coffee having seen its market share jump from 0.1 per cent to 20 per cent in just 30 years and is responsible for almost a quarter of all coffee drunk in the UK. The coffee industry in Vietnam has created over 2.5 million jobs and accounts for around five per cent of the country’s total exports.
The main contributor to its rapid growth as one of the world’s largest exporters of coffee comes down to the cheap, low quality of the product, with the majority of its coffee beans produced originating from the inexpensive Robusta plant. The popularity of instant coffee in the UK makes the country a prime target for Vietnamese coffee with more than 60 per cent of blends thought to come from Vietnam.
However, the reliance on agriculture as the key economic contributor doesn’t come without its risks. Much of Vietnam’s land is still littered with unexploded bombs left from the Vietnam War and it’s been reported that over 100,000 people, in a desperate search for new farmland, have been killed or injured as a result of the ordnance left in the ground since the culmination of the War in 1975.
Short-sightedness could be blinding
Vietnamese farmers lack the skills required to harvest the beans with most being exported as green beans and then processed elsewhere. A tropical South-East Asian country such as Vietnam has the perfect soil for a fruitful coffee yield but the pursuit of quick gains from growers is exhausting the soil and damaging the potential of future crops.
Volatile weather conditions are also a major threat to the coffee industry with Storm Son-Tinh and Typhoon Haiyan having hit Vietnam severely in the past 18 months alone. Being one of the world’s richest agricultural regions, climate change could have catastrophic effects not only for the coffee industry but its other main export business; rice. That truly would be a disaster, as rice generates jobs for 60 per cent of the country’s labour force.
A thriving Vietnamese coffee crop makes brews cheaper around the world and supports the country’s economy but it seems they are missing an opportunity. Vietnamese coffee could be of the utmost quality with their most famous variety being Kopi Luwak also known as ‘Weasel Coffee’. The process for making this coffee involves feeding beans to civets – a type of weasel – and then roasting the excreted beans, it tastes better than it sounds. But the Vietnamese are little known for producing coffee at all, yet alone a cappuccino to rival that of its Italian and French counterparts (providing you like eggs in your coffee).
The Starbucks Effect
Starbucks, having utilised Vietnamese coffee beans for many years to supply to its international stores, opened up its first store in Ho Chi Minh City and later in Hanoi last year. Starbucks have announced their desire to go deeper into Vietnam and “engage with the local farming community in a meaningful and relevant way” but they face stiff competition from already established home-grown brands Trung Nguyen Coffee and Highlands Coffee.
The fact that Starbucks is willing to engage with the Vietnamese growers at such a local level re-emphasises the potential the Vietnamese coffee industry has. Indonesia, although more renowned for its quality coffees, buys from Vietnam because of the price. The low cost of Vietnam’s beans provides a huge advantage over other developing nations looking to compete.
Vietnamese food is famous throughout the world for its unique flavour, style and variety, and it’s time their coffee was regarded in the same light. Chairman Vu (founder of Trung Nguyen Coffee) has unveiled ambitious plans to win over the US market, and then the world with a chain of Vietnamese-style coffee shops. The Vietnamese Government needs to follow Vu’s lead.
The coffee industry needs to diversify and start promoting the fantastic range of premium Vietnamese coffees it has at its disposal to ensure its exports business continues to drive the economy of one of the world’s most remarkable countries.