The UKVFTA has helped significantly promote the exports of Vietnamese coffee to the UK. — VNA/VNS Photo
Vietnamese coffee exporters need to build appropriate marketing and branding strategies and develop products that are suitable to consumers’ taste to further capitalise on advantages from the UK-Việt Nam Free Trade Agreement (UKVFTA) to increase coffee exports to the UK market, experts said.
Coffee is one of Việt Nam's 13 key agricultural export items. Last year, the country earned US$4.06 billion from the export of 1.78 million tonnes of coffee, a year-on-year increase of 32 per cent and 13.8 per cent, respectively.
The Ministry of Agriculture and Rural Development expected that Việt Nam would export about 1.72 million tonnes of coffee this year, earning $4.2 billion.
The UK is considered a market with strong potential for Vietnamese coffee due to its huge demand for the product, according to speakers at an online seminar on “Taking advantage of UKVFTA to promote coffee exports to the UK market” held by the Công thương (Industry and Trade) newspaper on November 28.
In addition, the UKVFTA, which took effect in May 2021, eliminates tariffs on more than 90 per cent of all goods traded between the UK and Việt Nam over the long term, providing a significant advantage to Vietnamese exporters in the market, they said.
Coffee export opportunities to the UK will further expand when the UK becomes a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, they said.
Nguyễn Cảnh Cường, former trade counselor at Vietnamese Embassy to the UK, said: “The UKVFTA has significantly promoted the exports of Vietnamese goods to the UK in recent years, and coffee is among the products that have high export revenue.”
Việt Nam’s coffee exports to the UK reached $90.8 million last year, up 61.1 per cent from 2021. The figure was at $58.1 million in the first seven months of this year, he said.
Coffee consumption has been steadily increasing in the UK, he said, adding that the British coffee industry is showing a new development trend, with higher demand for iced coffee, healthy coffee products, coffee for young adults or for diets, creating new opportunities for Vietnamese coffee.
He emphasised that “the UKVFTA clearly offers Vietnamese coffee a competitive advantage in the UK market compared to those of countries which do not have trade agreements with the UK, so Vietnamese should not miss out. But in order to turn opportunity into reality, firms must have marketing and branding strategies that are suitable to the UK market and consumers.”
Brand building
Currently, not many Vietnamese coffee products are available on shelves of supermarkets in the UK and not many consumers in the UK know about Vietnamese coffee. That’s because the way businesses are building brands does not match to the UK’s coffee culture and consumers’ taste.
“Brand building is one of Việt Nam’s weaknesses abroad. If firms want to improve their brand recognition abroad, they must have a new mindset about branding. They should not even choose a brand name in Vietnamese because it is difficult to pronounce and therefore difficult to remember,” he said.
He suggested that firms, besides the option of hiring branding expert, can employ Vietnamese who are working abroad after graduation to participate in building brands for their target markets.
A coffee processing plant in Đắk Lắk Province. Building brands, developing suitable products are crucial for Vietnamese coffee to increase the presence in the UK market. — VNA/VNS Photo
Hoàng Trọng Thủy, an agricultural expert, said Việt Nam is the world’s second largest coffee exporter after Brazil. Its coffee currently accounts for only about 17.4 per cent of the market share in the UK market.
He suggested local coffee firms should further invest in market research, and study the British coffee culture to create products that are suitable for local consumer preferences, thereby increasing the presence and share of Vietnamese coffee in the UK market.
Thái Như Hiệp, deputy chairman of the Việt Nam Coffee and Cocoa Association, and chairman of Vĩnh Hiệp Co. Ltd, who owns the L’amant Cafe’ brand, said his company mainly exports raw coffee beans to the EU and UK and is piloting the export of highly processed coffee products such as roasted and ground coffee and instant coffee.
“The coffee market in the UK is distinctly different from other European countries. In addition, European countries mainly import Arabica coffee, while Việt Nam mainly supplies Robusta coffee that has more caffeine than Arabica coffee beans. Therefore, businesses that want to enter the UK market must understand the coffee culture and consumer tastes to develop appropriate products,” he said.
He also shared that over the past year, businesses have invested in technology and digitisation to improve production and product quality and they have paid more attention to making coffee aligned to international sustainability standards to meet the strict requirements of import markets.
But coffee exporters have encountered difficulties in building brands abroad, he said.
He and Thủy suggested the Government support businesses in building brands in target markets and developing markets abroad.
Cường recommended firms consider working with coffee roasters in the UK to help process their coffee beans. By doing so, the roasters can suggest recipes that are suitable to the market.
This would help Vietnamese coffee exporters shift from exports of raw beans to processed products, he added.
Deforestation-Free Regulation
Cường shared the opinion that the UK is one of the most stringent markets in the world and has adopted initiatives and regulations related to green production and sustainable development to minimise the impact of climate change, reduce greenhouse gas emissions, curb deforestation, and preserve biodiversity.
This presents challenges for Vietnamese exporters, but businesses must strive to comply with these regulations, he said.
Under the European Union Deforestation-free Regulation (EUDR), which will take effect from December 30, 2024, coffee exporters must demonstrate their products aren’t sourced from deforested land or land with forest degradation to be eligible for entering the EU and UK markets.
Localities with forests in Việt Nam must prevent deforestation when planting coffee, he said.
Hiệp said most businesses exporting coffee to demanding markets have developed large raw material areas and enhanced linkages with farmers in the value chain. They have obtained coffee certifications such as Rainforest Alliance and 4C.
Most coffee areas in the Central Highlands were planted more than a decade ago and farmers have gradually switched to organic cultivation method to improve soil fertility and contribute to protecting the environment, he said.
Farmers are thoroughly trained on how to ensure quality, safety and traceability, he said. — VNS