Vietnam’s Café Society

Vietnam boasts a fascinating array of coffee cafes:  global brands, local chains, “indies” and boutiques, each attracting a unique segment of an avid coffee drinking market.  There are also thousands of alleyway joints offering traditional Vietnamese robusta coffee at rock-bottom prices.

Trung Nguyen

Trung Nguyen (TN) began in 1996 as a coffee processor in Buon Mi Thout, the coffee capitol of Vietnam. Soon after founder Dong Le Nguyen Vu decided to move the company up the value chain, investing  in roasting, packaging, and branding, as well as a chain of cafes.  TN is now a group of 6 companies operating 1,000 cafes in Vietnam with another 40 in Cambodia, Thailand, Malaysia, China, and Japan. It Vietnam’s biggest coffee brand with 14% market share, after Nestlé Vietnam (35% share), and is known as “the Starbucks of Vietnam.”

This title became a serious misnomer when, in early February 2013, Starbucks opened its Vietnam flagship store in Ho Chi Minh City. Vu saw this as a challenge to his market dominance in Vietnam, so made plans to expand his chain internationally, including the US. He once famously referred to Starbucks’ iconic blended iced drinks as “… basically coffee-flavored water with sugar!” 

Trung Nguyen features Vietnam robusta, the traditional favorite of Vietnamese coffee lovers. Front and center is café da, intense, sweetened hot coffee, and café sua da, sweetened iced coffee, brewed at table with a phin, a small metal drip brewer.  Focusing not on the man-on-the-street, but on the up-scale, aspirational middle class coffee drinker, Vu modernized his conservative-looking stores and charges on the high side for his bespoke products. 

TN offers a variety of coffees, including imported beans and a patented “pre-digested” coffee bean, said to mimic “weasel” or civet coffee, but costing much less.  The chain also offers what it calls “Sang Tao,” creative blends of robusta and Arabica beans and blends made with peaberry. 

With four roasting plants in the central highlands of Vietnam, the company currently produces 120,000 tons of coffee, including soluble coffee and white coffee under the G7 brand.  The company says its products are Fair Trade and UTZ certified.  While some TN coffee is available in Asian grocery stores overseas and on-line through distributors, Trung Nguyen exports only about 1,600 tons, most of it green coffee. 

In order to finance expansion, with its “war on Starbucks,” Trung Nguyen says it will sell up to 15% (perhaps eventually 30%) of its shares.

Also:

- Starbucks' China expansion aims high

- Asian Café Growth Accelerates

Starbucks

Global coffee giant Starbucks opened its flagship store in Vietnam at the busy Nga Sau Phu Dong roundabout in the heart of old Saigon’s District 1.  It’s one of 13 units in Vietnam (Hanoi, 2; HCMC, 11) managed by franchisee Maxim’s Group of Hong Kong.  Starbucks recognizes that Vietnam, unlike China, has a long-standing coffee-drinking culture, but the stores are unapologetically Western. 

Highlands Coffee

Highlands Coffee occupies the middle ground between native-born Trung Nguyen and foreign-born Starbucks. It began in 1998 in Hanoi selling branded coffee products.  Founder David Thai was the first overseas Vietnamese to incorporate a business in Vietnam.  HC opened its first retail unit in Hanoi, in 2002.  It now has more than 80 retail units in Hanoi, Da Nang, Haiphong, Binh Duong, and Bien Hoa. 

In late 2011, Viet Thai International, owner of Highlands Coffee, sold 50% of its shares to Jollibee Foods of Manila. Viet Thai and Jollibee, known as Super Foods Group, purchased the Vietnamese restaurant chain, PHO24, with 73 fast food outlets in Vietnam, Philippines, Korea, Cambodia, and Hong Kong. 

Highland cafés, which feature a conservative red and white color scheme in a modern setting reminiscent of the Seattle’s Best Coffee (SBC) chain, offer Vietnamese iced tea with condensed milk, black iced tea, and a selection of “frozen” drinks, flavored with matcha and green tea jelly, and cream, as well as, “Caramel Phin Freeze,” a combination of sweetened drip coffee, caramel, and whipped cream.  Western-style espresso-based beverages made from a blend of Arabica and robusta beans are listed under “other drinks.” Banh mi sandwiches, cakes, and pastries round out a fairly standard café menu.  Highland’s owner, Viet Thai, owns the Vietnam franchise for Nike, ALDO Shoes, La Vie en Rose lingerie and Hard Rock Café.

The Coffee Bean & Tea Leaf

Coffee Bean, founded in the US in 1963 by International Coffee & Tea, LLC, was purchased by Victor and Sunny Sassoon and their partner Severin Wunderman in 1998. It now has 900 cafes in the US and 29 countries overseas. Brought to Vietnam by businessman Andrew Nguyen, the company has 13 cafés in Ho Chi Minh City, 2 in Hanoi.

Gloria Jean’s Coffees

GJC is an Australian company with 400 stores in its home country and 500 international units across 39 markets.  It has 5 stores in Ho Chi Minh City.

The Coffee House

The Coffee House chain was created in 2014 by SeedCom, a group of young Vietnamese venture capitalists, which owns an historic tea plantation, a children’s clothing store, a women’s shoe store, a pizza restaurant and more. The 10-unit chain is proof that corporate ownership does not necessarily mean sameness.  

Each Coffee House retail unit exhibits a fresh exterior and interior design in keeping with its location and the bones of the existing structure.  There are sharp, clean interiors with a wide variety of seating options, from long communal tables congested with laptops to intimate tables for two.  

The Coffee House appears to cater to lower-income coffee lovers and students.  While menu items are beautifully presented, prices are considerably below-market, with espresso and blended iced drinks going for about $2-2.50 (all $US) and sophisticated desserts at $1.60.  All coffee on offer at The Coffee House is grown and processed in Vietnam.

The Workshop Specialty Coffee

Created in mid-2014, this big, light, airy space is part factory, warehouse, first class lounge and chemistry lab. It’s active and hive-like, but not noisy. Prominent is the coffee siphon with its glowing red-orange flame attended by a “siphonist.”  

The Workshop is frankly avant garde, with a buzz of experimentation, barista/siphonist competitions and coffee-tasting sessions reminding one of the roastery and tasting room opened 7 months ago by Starbucks in Seattle. 

The café sources arabica varietals and robusta from three farmers in Dalat, Lam Dong, and imported green Ethiopian coffees, which are roasted once a week.  Prices are $3.50 for a latte, $4 for an iced coffee.  Forgo frappe foolishness. 

Trâm Café

Perhaps the most unique café experiences in Saigon, if you can find them, are the “hidden cafes,” most of which are located in the Phu Nhuan district, east of Saigon District 1.  There are three types of hiddens:  garden cafes, antique or nostalgia cafés, and post-modern cafes. 

The Tram leads the first class. The place is sequestered at the end of a long, narrow alleyway lined with overgrown bamboo.  The heavy wooden medieval-looking entrance lets onto a pastiche of hanging tropical plants, gurgling waterfalls and a confusion of jury-built wooden rooms, decks and stairways which appear to be hung from an unseen cliff.

Upstairs, there is a covered porch, tiny private conversation rooms and a more formally furnished air conditioned dining room. The Tram kitchen offers a menu of high-quality Vietnamese meals, snacks and coffee-based beverages. For all the atmospherics, prices are moderate. The coffee is not as moving as the environment, but that’s not why one ferrets out this hidden gems!