A story of a coffee entrepreneur

27 | 11 | 2007

After starting life as a four-man organisation, the company has grown into a global giant by creating and then nurturing its brand name. As Vietnam’s internationally recognised coffee brand name, Trung Nguyen’s business savvy could offer a few lessons to fledgling Vietnamese coffee companies.

In the mid-1990s, Dang Le Nguyen Vu, a young entrepreneur from Dak Lak Province, began to dream of a Vietnamese coffee brand that would compete with Starbucks. Vu's dreams began small at a coffee roasting house in Buon Ma Thuot City operated by only four people.

Now Trung Nguyen is a HCM City-based company with 600 employees and 400 franchises in 61 cities and provinces. The brand's products, recognised internationally as representing Vietnamese coffee, are sold in 40 countries, including the United States, Japan, Singapore and Thailand. Trung Nguyen's success has hinged on the company's ability to create and protect its brand name, which is an aptitude many Vietnamese companies have yet to master.

Nguyen Ngoc Binh, assistant to Trung Nguyen Co Ltd's managing board, said a coffee company needs three things to thrive: high quality products, a strong brand name and a solid distribution system. "Coffee producers have to put advertising and marketing as their top priorities," Binh said, adding that Starbucks spends about dong 479.5 billion (US$30 million) yearly on advertising.

Nguyen Xuan Thai, director of Thang Loi Coffee Co., said the company tries to distinguish its products by buying raw Arabica coffee beans exclusively from the highland area of Dak Glay in Kon Tum Province. The company has partnered with Mitsubishi Corp to distribute its coffee beans.

Some Vietnamese coffee companies have been unable to establish strong marketing teams with excel-lent language skills and an under-standing of foreigners' taste, another manager said. Binh added that many Vietnamese companies cannot afford the high costs of advertising.

Van Thanh Huy, chair of Vietnam Coffee and Cacao Association (Vicofa), said companies must understand the difference between establishing a brand name and simply naming their products.

Source: Intellasia.net

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