(Corrects name in paragraph 4 to Trung Nguyen instead of Trung
* Vietnam is top producer of robusta beans
* Vietnam exports 90 pct of beans raw; potential to earn
* Trung Nguyen aims for $1 bln sales by 2015
* Strong demand from China as Asia switches to coffee from
By Emma Thomasson
LUCERNE, Switzerland, Nov 8 Vietnam's "Coffee
King" sips tea as he appraises the crowded tables at a Swiss
branch of Starbucks.
Dang Le Nguyen Vu may not rate the coffee, preferring the
brand from Vietnam's top processor which he heads, earning him
the regal epithet.
But the U.S. chain is in his sights as a marketing model for
Vietnam, the world's second largest coffee grower, to multiply
income by putting its brew and not just its beans on the map.
"Our ambition is to become a global brand," the chairman of
privately owned Trung Nguyen told Reuters.
"They are great at implanting a story in consumers' minds but
if we look into the core elements of Starbucks, what they are
doing is terrible. They are not selling coffee, they are selling
coffee-flavoured water with sugar in it," he said.
Trung Nguyen also runs Vietnam's biggest chain of coffee
houses, and Vu has his pitch ready for the Western market.
"American consumers don't need another product. They need
another story," he said, adding that his company aimed to
improve the lives of people in Vietnam's coffee-growing highland
region, a link he sees lacking in larger rivals.
"They sing great songs about sustainable development but at
the end of the day, the return on investment is what they care
about. They don't grow coffee, do they? We do."
Trung Nguyen says all its beans come from smaller farms
certified for sustainable growing practices, with growers
receiving guaranteed prices. Vu was in Lucerne to tout what he
calls "r e sponsible creativity for harmony and sustainability".
GRASSHOPPER VERSUS ELEPHANT
Vietnam is the world's top exporter of cheaper robusta beans
- mainly used for making instant coffee - and the second biggest
exporter of coffee overall after Brazil, which is the world
leader in exporting pricier arabica beans.
However, like many nations that produce soft commodities
coffee, cocoa and sugar, Vietnam only earns a fraction of the
income ultimately generated by its crops once they are
processed, packaged and marketed abroad.
"Vietnam currently exports 90 percent of beans raw. These
beans carry no brands. That needs to be changed," said Vu.
He said Vietnam should be able to earn $20 billion from
coffee within the next 15 years, up from less than $3 billion
now, if it boosts agricultural productivity and does more to add
value to its coffee by roasting, blending and packaging beans.
Trung Nguyen hopes to quadruple revenues to $1 billion by
2015 from $250 million in 2011 as Vu seeks to take on big global
brands like Nestle's Nescafe and Starbucks.
"We are like a grasshopper fighting against a giant
elephant. In terms of technology, marketing, Nestle is way ahead
of us," Vu said.
"Our strategy is to be smarter and more focused," he said,
noting that his G7 brand is the country's top selling instant
coffee ahead of Nescafe and local rival Vinacafe.
"For the consumer, Vietnam was closed for a long, long time
so they would always prefer the foreign brand versus the local
brand so for G7 to win this race it took extra effort from us."
Trung Nguyen already exports to 60 countries, but plans a
big new push into the United States next year, hoping to
eventually reverse the split in its sales of 70 percent for the
domestic market and 30 percent for export.
Trung Nguyen also expects to benefit from the fast-growing
popularity of coffee in the traditional tea-drinking countries
of Asia. Vu hopes to lift Vietnamese coffee consumption from a
current 1 kilogram per head per year to the 5 kgs of Brazil.
"We are running our factories at up to 110 percent of
capacity and still we cannot provide enough to the Chinese
market," said Vu, who says he drinks 10 cups a day himself.
"If crude oil is the energy of the industrial economy then
coffee is the energy of the knowledge-based economy."
Nestle noted recently the huge potential of the Chinese
market with only three cups per person currently drunk per year
compared with 168 cups in Hong Kong and 99 in Taiwan.
(Editing by William Hardy)